Sanford Health announced Thursday it’s stopping the merger process with Minnesota-based Fairview Health Services.
“The significant benefits we identified for a combined system with Fairview Health Services compelled us to exhaust all potential pathways to completing our proposed merger,” Bill Gassen, President and CEO of Sanford Health, wrote in a press release. “However, without support for this transaction from certain Minnesota stakeholders, we have determined it is in the best interest of Sanford Health to discontinue the merger process.”
The proposed merger had been on hiatus since April after the Minnesota Attorney General’s Office had requested the two healthcare systems to pause the merger in January as the office investigated potential impacts of the proposal.
Earlier:Sanford, Fairview push back merger timeline: What we know so far
Sanford and Fairview announced the intent to merge in November last year, which would have created a combined healthcare system of nearly 80,000 employees across more than 50 hospitals and medical facilities. The new system would have been headquartered in sioux Falls and run under the Sanford name.
Sanford Health initiated the decision to discontinue the merger process, according to Angela Dejene, with Sanford’s media relations team.
“Our aligned missions, our shared commitment to health and healing, and our deep roots in our communities positioned us well to transform the future of healthcare,” James Hereford, Fairview Health president and CEO, said in a press release from Fairview. “While we wish the outcome were different, we know that the best thing for … the communities we serve is to continue our focus on delivering world class care, now and into the future.”
Sanford, Fairview no stranger to push-back with proposed merger
Sanford and Fairview have both faced scrutiny during the past eight months as organizations, lawmakers, students and individuals expressed their upset at the idea of a proposed merger. Healthcare unions such as the Minnesota Nurses Association and the International Association of Machinists and Aerospace Workers (IAM) have publicly opposed the merger, for example.
Officials with the University of Minnesota in particular remained apprehensive about the merger since M Fairview Health Services encompasses the university’s health facilities. The U of M even attempted to buy back its healthcare facilities ahead of the merger.
Earlier this year, the Minnesota Attorney General’s Office held public listening sessions across the state where community members could voice their concerns about the proposed merger, and many U of M medical students also expressed concern over the quality of and the role South Dakota’s politics could play in their education.
More:Arkansas ruling on gender-affirming care ban could have implications in South Dakota
Then in May, Minnesota State Gov. Tim Walz signed a bill into law meant to prevent healthcare entities from merging in the event they could create a monopoly, a law created in direct response to the proposed merger. The law also extended the power of the state’s attorney general to oversee and ask a court to block such transactions.
Minnesota Attorney General Keith Ellison had been investigating the merger since it was announced.
Not the first time a Sanford merger has failed
This is the third time in four years that Sanford Health has failed to close on a proposed merger.
In 2019, Iowa-based healthcare system UnityPoint Health pulled out of deal with Sanford Health that would’ve created the 15th largest nonprofit health system in the U.S., with more than $11 billion in revenue estimated.
More:Sanford Children’s Hospital in Sioux Falls will soon have an accessible outdoor park
A year later, Sanford Health stopped negotiations with Utah-based healthcare system Intermountain Healthcare. The failed merger came after former Sanford Health CEO and President Kelby Krabbenhoft resigned and Gassen stepped in to fill the role.
Sanford Health had tried to merge with Fairview Health System in 2013, according to the Minneapolis Star Tribune, but failed because of the inability to get the University of Minnesota Medical Center on board. Sanford Health had also tried to merge with Minnesota-based Allina Health, another major healthcare system in the state, in 2012 but that was also doomed.
