MeritCare-Sanford merger unleashed ‘transformational change’ for region’s health care 10 years ago

Sanford Health President and CEO Kelby Krabbenhoft, left, and MeritCare President and CEO Dr. Roger Gilbertson during a light moment at the Nov. 2, 2009, announcement of the merger of the two health care organizations. Forum file photo

That “merger of equals,” as it was called, took place exactly a decade ago — on Nov. 2, 2009 — and transformed the health care marketplace in much of the Dakotas and western Minnesota.

Since the merger, Sanford has invested significantly in delivering health services in Fargo-Moorhead, including completion of a new $494 million medical center that opened in July 2017 as well as new clinics in Moorhead and West Fargo, to cite a few examples.

Without the financial clout that came from the merger, the new Sanford Medical Center would not have happened nearly so soon, said Dr. Roger Gilbertson, who retired as MeritCare’s CEO the day the merger took effect.

Before the merger, MeritCare’s timeline for opening a new medical center near Veterans Boulevard was around 2032, he said.

“We knew it would take awhile to accumulate cash,” Gilbertson said. “It’s really transformational change that’s happened. I would give extremely good grades to Sanford. I would say they’ve exceeded my expectations.”

Gilbertson credited Sanford CEO Kelby Krabbenhoft and philanthropist Denny Sanford, whose $400 million donation in 2007 marked the beginning of momentous change for the health system. To date, Sanford’s donations to his namesake health system are nearly $1 billion.

The new medical center and clinics are merely the most obvious additions since the merger. More important are the medical technology, services and professionals housed in the buildings, administrators said.

The new medical center has spurred growth in patient volumes, said Susan Jarvis, vice president for operations for Sanford’s Fargo region, which have been growing at about 4% annually for the past decade and at 5% to 6% over the last two years.

The growth in demand for services — and the investments that made delivering the services possible — are rooted in the merger, Jarvis said.

“Really the merger of these two organizations was the birth of Sanford as we know it,” she said. “That was the beginning of the growth.”

The merger between MeritCare and Sanford Health, previously Sioux Valley Hospital in Sioux Falls, S.D., brought together two organizations founded as Lutheran hospitals more than a century ago.

After that watershed merger, others soon followed, notably in 2011 with North Country Health Services in Bemidji, Minn., and with Medcenter One in Bismarck the following year. Earlier this year, Sanford merged with the Good Samaritan Society, which owns senior care centers, once again doubling the organization’s size.

In fact, Jarvis said, further partnerships with nursing homes could result in light of unexpected care coordination benefits that resulted in areas where Sanford and Good Samaritan overlap.

“That’s our next step of integration,” she said, noting that Fargo is the only Sanford hub that does not have a Good Samaritan nursing home. “It allows us to coordinate care,” including use of a shared electronic medical record. “It makes things so much more seamless.”

Rural communities also have benefited from the growth in services, Jarvis said. Patients must travel to see specialists at the Mayo Clinic in Rochester, for example.

In many cases, “We send our specialists out to rural communities,” she said. “We’ve kept our promise to provide care close to home.”

The purchasing power created by the merger has resulted in cost savings and enabled Sanford to add a variety of services, according to Jarvis, including the following:

  • Recruiting subspecialty physicians, such as pediatric endocrinology, surgery and infectious disease; neurovascular surgery, maternal fetal medicine and orthopedic oncology.

  • Expanded medical research, including breast cancer, diabetes and immunotherapy.

  • Adoption of specialized technology, such as robotic-assisted surgery.

  • Increased medical training through residencies and fellowships in specialties including oncology, slated to launch in 2022.

The service enhancements are enabled both through increased financial resources and the larger base of patients that is needed to sustain highly specialized medicine — and was one of the expressed goals of the merger, Gilbertson said.

Certain specialties, such as a burn center, will not become available, but many others will, Jarvis said. The Roger Maris Cancer Center, for example, hopes to add bone marrow transplants in 2021 and, at a later date, immunotherapy, services that will serve the entire Sanford system, she said.

“There’s not much that’s not going to be able to come to Fargo and we can take care of it,” Jarvis said.

Other service enhancements are on the drawing board for Fargo, including a 100,000-square-foot cardiovascular clinic to be built next to the new medical center, with groundbreaking scheduled for next year, and an expanded Roger Maris Cancer Center at its downtown campus.

At the time of the merger, some prominent voices called for a go-slow approach. One of those was former Fargo Mayor Bruce Furness, who was a spokesman for a group called Citizens for MeritCare.

In the years since, Furness said, his early concerns have long since been erased.

“I think it’s been really outstanding, actually,” he said of the merger’s results. “I think it worked out really well,” he added, citing the new medical center and clinics in Moorhead and West Fargo. “They’ve been putting a lot of money back into the community.”

Combining large organizations is always a challenge, involving not only structural change but cultural change, and it takes time to meld, Gilbertson said.

“There always are some bumps in the road from time to time, but I think this has gone as smoothly as you can,” he said.

And Sanford Health appears poised for another large merger. Sanford is exploring joining with Des Moines-based UnityPoint Health in Iowa. The proposed merger cleared a major regulatory hurdle in September, and the organizations are working toward combining in February.

If completed, Sanford Health would be close to becoming one of the nation’s top 15 largest health care systems — a step that few could have foreseen when MeritCare and Sanford merged a decade ago.

Sanford Health snapshot:

  • 44 medical centers
  • 482 clinics
  • 242 senior living facilities
  • 190,000 covered lives enrolled in the Sanford Health Plan
  • 1,453 physicians, 1,001 advanced practice providers and 9,703 registered nurses delivering care in more than 80 specialty areas
  • 48,622 employees

Each year Sanford provides:

  • 5.3 million outpatient and clinic visits
  • 84,466 hospital admissions
  • 136,436 surgeries and procedures
  • 9,537 births
  • 210,129 emergency room visits

Source: Sanford Health

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