Jan. 6, 2025

The successful merger of Sioux Falls-based Sanford Health and Wisconsin-based Marshfield Clinic Health System showed promise from the start and now can start to deliver on it, according to Sanford’s CEO.

“It really puts us on great footing to really begin to do the work … of bringing these two incredible organizations together with their great history to create a better organization moving forward,” Bill Gassen said.

Ultimately, the deal came together with one big endorsement: A vote of Marshfield physicians drew almost unanimous approval.

“Bill and his team did a fantastic job coming to Wisconsin, coming to the Upper Peninsula of Michigan, having conversations with providers, openly answering their questions … and being able to demonstrate the benefits of the combination for the provider group,” said Dr. Brian Hoerneman, who previously served as interim CEO of Marshfield Clinic Health System and now has transitioned to the role of president and CEO of the Marshfield Clinic region of Sanford Health. He is a native of Marshfield, Wisconsin, and a practicing emergency medicine physician.

“Over 95 percent of them voted in favor, which was really remarkable and I think a testament to how beneficial this is to the organizations going forward.”

The combined nonprofit integrated health system includes almost 56,000 employees, 56 hospitals, 4,500 providers, two fully integrated health plans, specialty pharmacies and nationally recognized research institutions. Sanford Health Plan and Security Health Plan will serve more than 425,000 members. The combined organization would have had $10.3 billion in revenue in 2023, ranking it just outside the nation’s top 20 largest health systems.

The Marshfield Clinic region is a new health services delivery area of Sanford Health that will continue to serve communities in Wisconsin and Michigan’s Upper Peninsula. The Marshfield brand will continue to be predominant within the Marshfield Clinic region.

When it came to scaling, both systems had been there before and ended up discontinuing attempted mergers. In 2023, Sanford’s second attempt to merge with Minnesota-based Fairview Health Services ended.

Marshfield experienced a similar outcome in early 2024 after attempting to merge with Minnesota-based Essentia Health since 2022.

Sanford also discontinued mergers with Utah-based Intermountain Healthcare in 2021 and Iowa-based UnityPoint Health in 2019.

This time, though, there appeared to be clear alignment from the start, the leaders of both organizations said.

“From the start, it was very clear to all of us at Sanford Health that Marshfield Clinic Health System was focused every single day on advancing care for its patents,” Gassen said. “It was equally as clear from day one that they shared a passion and a commitment around improving care across rural America and bringing together that expertise … and that passion around our patients made for such a natural fit.”

Both organizations are more than a century old and have leaned into a “strong physician culture that helps us innovate, helps us keep the patient at the center of every decision we make,” Gassen said.

They have a shared commitment to research, bringing discoveries efficiently to the patient, and in their respective provider-sponsored and -led health plans.

Sanford Health Plan and Security Health Plan will continue current operations under common management reporting and governance structures. The health plans are led by Dr. Tommy Ibrahim, executive vice president of Sanford Health and president and CEO of Sanford Health Plan. Krista Hoglund serves as regional president and CEO of Security Health Plan and reports to Ibrahim.

“We were able to address some of the really foundational questions early on in the process and determine this was a partnership that was going to make sense for both organizations, and both organizations and the communities they serve would benefit,” Hoerneman said.

Hoerneman and his board were “very open, very transparent” from the beginning, Gassen added, “which created such an environment for us to do the same. From the start, we were very clear on our non-negotiables, our priorities, and we were able to talk about our challenges in a very open environment that created a very smooth process for working through the conversations.”

As part of the merger, three Marshfield Clinic Health System board members have joined the Sanford Health board of trustees. The new trustees are Dr. George Brown, Thomas Wenzel and Dr. Maureen McCausland. A regional board of community leaders is being established to govern the operations and strategy of the Marshfield Clinic region.

Sanford Health begins 2025 with a footprint that stretches farther to the east, with the Marshfield region now in place, and to the west, after becoming the parent company of Black Hills Surgical Hospital and Black Hills Orthopedic & Spine Center late last year. That deal includes associated facilities in Rapid City as well as Black Hills Surgery Center in Gillette, Wyoming, including urgent care locations, clinics and an ambulatory surgery center.

“2024 was a historical year for Sanford Health, obviously an impactful year for us … but more importantly than the impact and the transformational growth that occurred is it really marks a historical point in time for the advancement of rural health care,” Gassen said. “We have an unwavering commitment to delivering world-class care to patients regardless of their ZIP code, and that was a galvanizing call to those organizations and their physician leaders.”

Sanford’s vision to serve as the national leader in rural health care is one that Gassen repeatedly has articulated since becoming CEO four years ago. He views it as a reflection of a “ground up” approach that began with asking team members what drives them to deliver care, he said.

“It really did center around the commitment to deliver care in these communities and the recognition that there’s something special about the communities we live in and deliver care,” he said. “These patients aren’t numbers. These are family members. These are individuals we see at the grocery store. There’s something intimate and special in this part of the country.”

Advancing the organization includes building out the care models and business models to support it, including policy advocacy at a state and national level, he added.

“I’m excited about all the opportunities we have in front of us,” Gassen said. “I’m more optimistic today than I’ve ever been about the future of our organization that now is stronger than yesterday.”