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Steve Griffin, KSL

Intermountain Healthcare announces plans to merge with Sanford Health

By Ryan Miller, KSL.com | Updated - Oct. 26, 2020 at 5:39 p.m. | Posted - Oct. 26, 2020 at 10:58 a.m.



SALT LAKE CITY — In what they hope will be a model for American health care moving forward, Intermountain Healthcare, Utah's largest hospital chain announced plans to merge with Midwest chain Sanford Health, leaders of the two organizations announced Monday.

"This is not something that needs to happen," said Dr. Marc Harrison, Intermountain Healthcare's CEO and president. "This is not a turnaround, this is something that should happen for the future of American health care."

The merger is expected to be closed by next summer, the companies said. The combined organization would employ more than 89,000 people and operate 70 hospitals. It will also operate 435 clinics across seven states, provide senior care in 233 locations in 24 states, and insure 1.1 million people.

Intermountain Healthcare will be the parent company in the merger, but Sanford Health will retain its name for its hospitals. Sanford Health is headquartered in Sioux Falls, South Dakota.

Citing the company's similar profiles and missions, Harrison said the merger was a "match made in heaven." Intermountain Healthcare began in the mid-1970s when The Church of Jesus Christ of Latter-day Saints donated 15 hospitals to the community. Sanford Health's first hospital was founded by a board of Lutheran clergy and physicians in the late 1800s.

"This is two really strong organizations coming together," Harrison said. "I'm not sending a check to Kelby (Krabbenhoft, president and CEO of Sanford Health), he's not sending a check to me. This is really about the greater good, and I think that'll be inspiring to the Intermountain caregivers."

When it comes to those caregivers, Harrison said he doesn't anticipate the merger will lead to layoffs. Krabbenhoft added he believed the merger would lead to "growth and opportunity."

Last week, both of the organization's boards unanimously approved the merger. A regulatory process review will now begin that Krabbenhoft said will take "about nine months."

Harrison said Intermountain patients will not notice any differences in care in the short term, but added there should be benefits moving forward — and that was part of the motivation of joining forces.

"We think the antidote to this is a system at scale across the interior West of the United States that's predicated on population health and value and affordability and the people we're privileged to serve," Harrison said

Harrison added that with the merger Intermountain will have new partners for telehealth and be able to invest more in the digital space of health care.

Harrison will serve as CEO of the combined organization with Krabbenhoft supporting him. Krabbenhoft said he plans to retire in two years. Gail Miller, chairwoman of the Larry H. Miller Group of Companies and of Intermountain's board, will lead the combined board.

"She's an incredible businesswoman and accomplished matriarch of her family, and someone that we are just really taken with," Krabbenhoft said.

Former Utah Gov. Mike Leavitt was credited as being the one behind the merger. Leavitt serves as an advisor for Krabbenhoft and when the former governor found out the two CEOs hadn't met, he set up a breakfast meeting.

They didn't intend to start merger talks when they met, but after discovering they had a common view of what hospitals should look like, those conversations began.

"It was one of those 'Aha!' moments that suggested we should be talking about something bigger than ham and eggs," Krabbenhoft said.

The combined company will be headquartered in Salt Lake City with corporate offices also being located in Sioux Falls.

Ryan Miller

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