Officials: MeritCare, Sanford Health merger creates largest rural not-for-profit health system

Dakotas 2 largest health care systems merge

FARGO, N.D. — The two largest health systems in the Dakotas became one Monday, forming what officials said is the nation’s largest not-for-profit rural health care provider.

The Fargo-based MeritCare Board of Trustees approved a merger with Sanford Health of Sioux Falls, S.D., a week after the merger was approved by Sanford’s board.

The new system is called Sanford Health & MeritCare. Officials say it will cover 130,000 square miles, including parts of North Dakota, South Dakota, Minnesota, Iowa and Nebraska.

Executives of Sanford and MeritCare said it is the nation’s largest not-for-profit rural health care provider based on gross revenue, patient beds and number of full-time employees. The new system will have a net revenue of about $2 billion and employ about 17,400 people, including more than 800 doctors.

Sanford chief executive Kelby Krabbenhoft, who will head the new system, said the terms of the merger were that “there weren’t any.”

It was a true merger of equals, Kraffenhoft told reporters at a news conference after the trustees’ vote. He estimated the cost of travel, attorney fees and other expenses involved in the merger at about $700,000.

“You’re looking at one of the all-time econo-mergers,” Krabbenhoft said.

Retiring MeritCare chief executive Roger Gilbertson said the merger went smoothly, considering the current economy and the “treacherous environment” of health care reform proposals.

“I can’t think of any down side whatsoever, with respect to the benefits that this merger will bring,” Gilbertson said.

Krabbenhoft said it was fitting that the merger was approved on the 120th anniversary of statehood for North Dakota and South Dakota.

Sanford Health & MeritCare will have 29 hospitals with more than 1,600 beds. Krabbenhoft said no layoffs and no change in employee compensation are expected.

The new system will have corporate offices in Fargo and Sioux Falls, and executives will alternate weekly meetings between the two cities, he said.