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Sanford, Medcenter One move closer to merger

Sanford's president and chief executive

Sanford Health moved closer to extending its reach into the western part of the state Monday with the announcement it's signed a letter of intent to merge with Bismarck-based Medcenter One.

The move would stretch the borders of Sanford - a multistate system with sites from northern Iowa to central North Dakota - west into the fertile territory of the state's Oil Patch.

"The demands for care out there are very compelling," said Kelby Krabbenhoft, Sanford's president and chief executive.

He spoke to The Forum on Monday alongside Craig Lambert, president and chief executive of Medcenter One.

Lambert said Sanford's culture and the economic advantages of consolidation make the move an attractive one.

"We see the future as economies of scale," he said.

Krabbenhoft would likely head the merged company. Sanford, which has more than 1,600 beds to Medcenter One's 228, will also likely wind up with dibs on the name.

"We know full well what Sanford represents," Lambrecht said. "We're very comfortable with that. We're ready for that."

He also said it's important to Medcenter One that Bismarck and Mandan become a hub for the company. Sanford current has headquarters here and in Sioux Falls, S.D.

A merger would push the combined annual revenues of the companies past $3 billion. Sanford currently does about $2.3 billion in revenues.

Krabbenhoft said he and Lambrecht first started talking even before Sanford's merger with MeritCare three years ago. Those conversations eventually blossomed into the current merger discussion.

The letter of intent is nonbinding. The boards of both companies still must approve the plan, along with federal and state regulators. That could happen this summer, with an effective merger date set for this fall.

Jerry Jurena, president of the Bismarck-based North Dakota Hospital Association, said the letter of intent comes as no surprise after months of rumors and reports the two companies were in talks.

He said patients likely won't see many changes because the systems already cooperate on many levels like sharing patients and resources.

"They've already been working together," he said. "There just has never been a formal agreement."

He said hospital systems that consolidate do so in search of efficiencies and economies of scale, and to broaden the specialties they offer.

Minot-based Trinity Health, Altru of Grand Forks, and Essentia Health, which spans four states, are among the largest other systems in the region.

Sanford's history of mergers

2001: Sanford (then Fargo's MeritCare) purchased Heartland Health System in Fargo.

2001: Sanford merges with Central Plains Clinic in Sioux Falls, S.D.

2007: Sioux Valley name changes to Sanford Health.

2007: Sanford (then MeritCare) merges with North Valley Family Medicine Clinic in East Grand Forks, Minn.

2007: Sanford (then MeritCare) merges with Northwest Medical Center in Thief River Falls, Minn.

2007: Sanford (then MeritCare) merges with Dakota Clinic in Thief River Falls.

2008: Sanford merges with United Clinic in Aberdeen, S.D.

2008: Sanford merges with Worthington Regional Hospital in Worthington, Minn.

2009: Sanford merges with MeritCare.

2009: Sanford merges with Community Hospital and Medical Center in Wheaton, Minn.

2010 : Sanford merges with Union Hospital in Mayville, N.D.

2010: Sanford merges with Orthopaedic Associates in Fargo.

2010: Sanford merges with Southeast Medical Center in Oakes, N.D.

2010: Sanford merges with Lennox Area Medical Center in Lennox, S.D.

2011: Sanford merges with North Country Health Services in Bemidji, Minn.

2011: Sanford merges with Lake Region Bone and Joint Surgeons in Bemidji.

2011: Sanford merges with Bemidji Medical Equipment.

2011: Sanford merges with Broadway Medical Center in Alexandria, Minn.

2012: Sanford purchases Clearwater Health Services in Bagley, Minn.

Source: Sanford Health

Readers can reach Forum reporter Marino Eccher at (701) 241-5502