UnityPoint Health, one of Iowa’s largest hospital systems, is exploring a possible merger with South Dakota-based Sanford Health, hospital officials announced Friday.
If combined, the system would become one of the 15 largest nonprofit health systems in the country with an operating revenue of more than $11 billion. It would employ more than 2,600 physicians and 83,000 staff.
Both health systems have signed a letter of intent to “explore joining their trusted brands” to become the premier destination for medical care in the Midwest, according to a news release.
“The decision follows considerable exploration between leadership teams from each organization,” the news release stated. “The two organizations will build on their strengths in clinical care, research, innovation and education to deliver greater health outcomes and value in communities in the Midwest and around the world.”
The merger would be subject to regulatory reviews and timelines are still fluid, but company leaders said they hope to complete the transaction by the end of 2019.
“We are approaching our discussions very purposefully, with a clear and common vision for success,” said Kevin Vermeer, president and chief executive officer of UnityPoint Health. “First and foremost, our focus is on people. Working together, we will find new ways to broaden access to care — beyond the traditional settings — and take greater responsibility for the health of the populations we serve.”
Des Moines-based UnityPoint Health includes 32 hospitals — including UnityPoint Health-St. Luke’s in Cedar Rapids — and 280 clinics in Iowa, Illinois and Wisconsin.
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Sanford Health, based in Sioux Falls, is one of the largest health systems in the United States. It employs about 1,400 physicians and includes 44 hospitals and more than 200 senior care facilities in 26 states and nine countries.
“Sanford and UnityPoint are two successful systems intent on controlling our own destiny,” said Kelby Krabbenhoft, president and CEO of Sanford Health.
“We believe that in the very near future, fully integrated health systems will drive greater value through affordable options for high-quality health care to patients, governments and employers.
“The combination of Sanford and UnityPoint will help both organizations better meet this need, creating a new system positioned for continued growth across a broad geography.”
System officials did not specify what the merged organization would be called in their announcement.
However, the news release said officials have agreed “both organizations would continue to operate their respective fully integrated medical groups and maintain long-standing relationships with independent physicians, hospitals and other health care partners.”
If merged, Vermeer and Krabbenhoft would lead the company — with UnityPoint Health’s Vermeer serving as senior executive vice president and Sanford’s Krabbenhoft as president and chief executive officer.
A new governing board would be established with the new company, made up of representatives from both health systems as well as unaffiliated members “with relevant national industry experience and expertise.” UnityPoint Health would recommend the board’s chair.
UnityPoint Health was formed in 1993, when Iowa Methodist Medical Center, Blank Children’s Hospital and Iowa Lutheran Hospital joined to create the Iowa Health System. Hospitals and clinics throughout Iowa, Illinois and Wisconsin joined the system in the following years.
The Iowa Health System changed its name to UnityPoint in 2013.
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According to its website, Sanford Health focuses on integrated delivery of health care, genomic medicine, senior care and services, global clinics, research and affordable insurance.
South Dakota-based philanthropist Denny Sanford gifted the health system with $400 million in 2007, funding that “transformed how Sanford Health improves the human condition,” according to the news release.
According to reports from the Argus Leader and Becker’s Hospital Review, Sanford’s donation helped fund the 146-bed Sanford’s Children’s Hospital in Sioux Falls and more than $127 million in property holdings across the city, which is more than doubled what the original Sioux Valley Hospital had in 2006.
Sanford Health has opened 17 clinics in Ghana as of 2017 — with plans to develop at least 300 in total in that country — and a clinic in Kunming, China, in partnership with a state-owned company of the Yunnan provincial government.
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