SIOUX FALLS, S.D. (KELO) — Sanford Health and a Utah-based Intermountain Healthcare plan to join forces. Both hospitals signed a letter of intent on Friday. Once the merger of the two health systems finalizes, they will employ more than 89,000 people and operate 70 hospitals, while insuring more than 1 million people.  

“Numerically we’re almost identical twins in terms of the healthcare delivery side; it’s the insurance piece that has challenged Sanford in recent times,” Kelby Krabbenhoft, the president and CEO of Sanford Health said.

Sanford Health Plans currently serves 200,000 members across the Great Plains, the second largest insurance carrier in the Dakotas.

“We’ve had a healthcare insurance company for 25 years and we do a good job with it in this region, but we’re stuck, to grow outside this region with our insurance in a mobile society, has become a daunting challenge for Sanford Health,” Krabbenhoft said. 

Intermountain Healthcare’s insurance has nearly five times the members.

“We have a health plan that has just shy of a million members in it,” Marc Harrison, M.D., president and CEO of Intermountain Healthcare said.

Growing that healthcare network for their members is the goal of both health systems in this merger.

“People are so mobile today and expect to be able to move with their healthcare insurance and with their healthcare provider organization traveling with us. So large geographies are now just a very common sense, rational way for healthcare systems to be talking to each other,” Krabbenhoft said.
The two CEOs say this intended merger will not only expand the reach of their health insurance network but also make it more efficient.

“People in our area will be able to buy their insurance from their healthcare provider in a way that reduces their premium or holds it to a rational level of increases,” Krabbenhoft said. 

A merger designed to make healthcare more financially feasible for members, without compromising care.

“We have to promise that those people have access to hospitals, doctors, staff, technology and good care. The only way we can deliver on that is when leaders can sit down together on boards and say hey, maybe we can put our organizations together,” Krabbenhoft said.
“This is something that should happen for the future of American healthcare,” Harrison said. 

Krabbenhoft says he’s spent his career working on acquisitions and mergers to expand Sanford’s health network, a goal he will continue as president emeritus once the merger with Intermountain Healthcare is complete.