Sanford and MeritCare Create A New Health System

Contact:
Stacy Bauer Jones, Media Relations Coordinator, (605) 366-2432 jonesst@sanfordhealth.org or
Darren Huber, MeritCare Media Relations Coordinator, (701) 234-2000 beeper 1715 darren.huber@meritcare.com

FARGO, N.D. - Following approval by their Boards of Trustees, South Dakota-based Sanford Health (Sanford) and North Dakota-based MeritCare Health System (MeritCare) today announced the two organizations have merged to become one of the country's largest integrated health care systems.  The new System will strengthen health care in the region by expanding services, research, education and access to care.

"Our commitment is to pursue a world class reputation for medical care, to be nationally relevant as one of its best performing health care organizations, and to find a cure for devastating diseases affecting the health of the people we serve," commented Kelby Krabbenhoft, newly appointed President & Chief Executive Officer of Sanford Health-MeritCare. "We believe these objectives are what we have been called to do because of the history, stature, and ability of our organization and physicians and staff.  We also believe our efforts will be a source of confidence and pride throughout our entire region."

Other priorities for the merged organization include: providing the best possible patient experience and development of new services in Centers of Excellence such as Heart, Cancer, Women's, Children's, Emergency, Trauma, and Orthopedics. Additional priorities are stability and opportunities for staff and physicians and their future professional development including expansion of education and medical training programs, involvement and support for communities through investments in projects involving health and wellness, children's services, education and economic development.

"The decision to combine our organizations demonstrates the ongoing commitment MeritCare and Sanford have to find new ways of improving health and access to care for people in our respective regions," said Ellen-Earle Chaffee, Chair, MeritCare Board of Trustees.

"As our two organizations achieved strong regional leadership positions, it was important that we continued to promote health and economic development," said Barb Stork, Chair of Sanford Board of Trustees.  "Through our new merged organization we will grow and improve our services, and expand our research and education capabilities as a shared mission."

MeritCare is North Dakota's largest health system with many regional clinic and hospital sites in North Dakota and Northwest Minnesota.  It is known for regional excellence in a number of clinical specialties such as the Roger Maris Cancer Center, Heart Center, and Children's Hospital.  It has a strong record of research and educational activities, and supporting new health care developments and community service programs.

Sanford Health is comprised of Sanford Clinic, Sanford USD Medical Center and a network of community hospitals and clinics in South Dakota, Southwest Minnesota, Northwest Iowa, and Northeast Nebraska.  It is known for its comprehensive health services, and growing research and education programs.

A recent $400 million gift from T. Denny Sanford has enabled Sanford Health to initiate significant research programs in children's health and other research areas, an Initiative to fund a cure for type 1 Diabetes and the establishment of Children's World Clinics, and health campus developments which includes the recently opened Sanford Children's Hospital and a new Sanford Heart Hospital, which is under construction.

"At the core of this new organization rest two health care legends that go back to the 1890's.  They come forward now in a united trust that is demonstrated to each other through our combined vision and mission to be one of the nation's best health systems.  Patients should be comforted and confident that our great physicians, staff and institutions await those we serve in both regions amongst hundreds of communities," said Krabbenhoft.  "Together we will grow and improve the delivery of medicine, deliver on the promise of results in research, and deliver on the promise of medical and health education.  This new system is designed to address the challenges and opportunities of today.  It is also designed to continue the legacy of the past as a commitment to opportunities, security for care, and the work of tens of thousands of our employees and their families in generations to come."

MeritCare President and CEO, Roger Gilbertson, M.D., said "together Sanford and MeritCare will bring the full potential of an integrated care system to the benefit of patients, communities, employees and physicians.  It will add value for patients, be proactive in health care reform, attract talent including physicians, nurses, health professionals, and others who will significantly advance the sophistication and comprehensiveness of services offered, and promote economic development in our communities."  Dr. Gilbertson will be retiring as planned after more than 17 years as president and CEO of MeritCare and 30 years as a practicing physician.

"The six state presence and premier medical centers in adjacent geographic regions that are a part of the combination of MeritCare and Sanford create a new health organization.  It will have the ability to increase its level of efficiency and health care delivery for a very broad population in large contiguous service areas, and expand research activities and education programs for further improvement," commented Bruce Morgan, Principal, Deloitte Consulting LLP, an independent consulting firm.

MEDIA NOTES

1. The merger is effective immediately today, November 2, 2009.  The legal corporate name of the new organization is Sanford Health-MeritCare.

2. The southern region will continue to operate under the name Sanford Health and the northern region will continue to operate under the name MeritCare. This will be true with signage, logos, etc.

3. The new organization, as confirmed by the Health Care Advisory Board, is the largest, not-for-profit rural health care provider in the nation based on gross revenues, patient beds, and number of full time employees serving a significant patient volume outside of major metropolitan areas.  The new Sanford and MeritCare organization encompasses six states: North Dakota, South Dakota, Minnesota, Iowa, Nebraska, and Oklahoma  with 17,400 employees and an excess of 800 physicians, 70 specialty areas in medicine, 29 hospitals over 1,600 beds serving over 2 million people in the service area.  The combined annual net revenue is $2 billion.

4. Corporate offices will be located in both Fargo, N.D. and Sioux Falls, S.D. The Fargo office will be located in the Wells Fargo Bank building at 406 Main Avenue. The Sioux Falls corporate office will be in the new Sanford Center building at 2300 E. 60th Street.

5. Sanford Health and MeritCare will have equal representation from both Sanford and MeritCare Corporate Governance (Board of Trustees), Physician Governance (Council of Governors), and corporate officers.  Organizational structures will be similar in the two regions with regional leaders assigned to respective medical centers, clinics and networks. Development and research programs will have leadership in both regions. 

6. The trustees for the new Sanford-MeritCare Corporation are as follows: 

7. In addition, for a limited period of time there will be a Sanford Corporate member and a MeritCare Corporate member for the new Sanford-MeritCare Corporation. This involves the current Boards of Trustees of each organization serving as the board of directors for these member organizations.  These board members in addition to the others identified include: Ellen-Earle Chaffee, Judy Green, Don Morton, Ann Christianson, Dr. Kushal Handa, Dr. Roxanne Newman, Jack Reynolds, David Wilcox, Tony Truer, and Brent Teiken for MeritCare;  and Bill Baker, Barb Everist, Michael Claar, Dr. Dean Madison, Dr. Tom Braithwaite, Dr. Rich Hardy, and Dr. Rod Parry for Sanford.

8. The new executive management leadership includes: 

• Kelby Krabbenhoft, President and Chief Executive Officer, and the following corporate officers: 
• Dave Link, Senior Executive Vice President (Sanford). Areas of responsibilities involve corporate development and research including Sanford Initiatives, Health Plan, Foundation, and Information Technology.
• Becky Nelson, Senior Vice President and Chief Operating Officer (Sanford).  Areas of responsibility involve health services in both regions including clinic, hospital, and network operations.
• Lisa Carlson, Chief Financial Officer (MeritCare).  Areas of responsibility involve financial management and operations and reimbursement.
• Paul Richard, Chief Legal Officer (MeritCare).  Areas of responsibility involve legal affairs, public policy, compliance, risk management and assurance.
• Bill Marlette, Treasurer (Sanford).  Areas of responsibility involve investments, asset management, and financing.
• Andrew Richburg, Executive Vice President (MeritCare). Areas of responsibility involve planning, marketing, corporate communications, and public affairs.

A Chief Medical Officer position will be added. As planned, Dr. Roger Gilbertson is retiring as the President and Chief Executive Officer of MeritCare.

9.   Presidents and senior corporate executives for the new organization include:
 Northern Region 
 Dr. Bruce Pitts, President, MeritCare Medical Group
 Dennis Millirons, President, MeritCare Medical Center
 Doug Vang, President, MeritCare Health Network

Southern Region
Dr. Dan Blue, President, Sanford Clinic
Dr. Pat O'Brien, President, Sanford USD Medical Center
Ed Weiland, President, Sanford Health Network

Brian Mortenson, President Sanford Health Foundation, Ruth Krystopolski, President, Sanford Health Plan, and Kim Patrick, General Counsel, are other executives in the new organization.

10. Current Growth Plans for the Organization include:
Southern Region - the construction of a new Sanford Heart Hospital and a new research center building in Sioux Falls, as well as a new hospital in Aberdeen and a long term care facility in Chamberlain, both in South Dakota.
Northern Region - plans call for the construction of a 25 bed critical access hospital in Thief River Falls, Minn., and a new clinic in Mayville, North Dakota.
MeritCare Master Facility Plan - Identify expansion for emergency, trauma, and air transport services, and a new, expanded Roger Maris Cancer Center and the Agassiz Crossing property in southwest Fargo is being evaluated for future development for growth purposes.