Leaders of Dakotas hospitals discuss merger

FARGO — Officials of the two largest hospitals in the Dakotas say their merger should give them leverage to handle major changes in the nation’s health care system.

The merger of the Fargo-based MeritCare and Sanford Health, based in Sioux Falls, S.D., is expected to be completed by next year, officials said Friday. The two groups signed a letter of intent Thursday.

The new organization would be called Sanford MeritCare Health System and would be incorporated in North Dakota. It would create a network serving about 2 million people in North Dakota, South Dakota, Minnesota, Nebraska and Iowa.

Representing such a large geographic area should make the company an important player in any health care overhaul, MeritCare CEO Roger Gilbertson said.

“This isn’t directly related to that, but it certainly fits very well with the massive change that’s going to occur in health care,” said Gilbertson, who is retiring at the end of the year.

Sanford Health CEO Kelly Krabbenhoft, who is to become the new system’s top executive, said he expects the merger to increase revenue, medical services and jobs. The two hospitals currently have a combined $700 million in cash reserves, he said.

“That, in and of itself, comes to the table and speaks for itself in terms of financial strength that we can portray,” Krabbenhoft said.

Some Fargo citizens have complained that the two companies are moving too quickly. Gilbertson said discussions have been ongoing for four months and were easier because the two hospitals have so much in common.

“There’s certainly no rational reason to delay,” he said.

Merger discussions began in the spring after MeritCare moved patients to Sanford when Red River flooding threatened the Fargo area.

MeritCare employs 479 doctors and 6,190 full-time employees in other positions; Sanford has 330 doctors and 7,801 full-time positions.

Sanford reports gross revenues of $1.8 billion, and MeritCare $1.5 billion.

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