Dive Brief:
- Good Samaritan Society members on Tuesday voted to approve a merger agreement with Sanford Health, a move that would combine two of Sioux Falls, South Dakota's largest employers.
- The deal would fold Good Samaritan's senior care services into Sanford Health's system, which includes 44 hospitals across nine states.
- The merger is expected to be completed by Jan. 1, pending regulatory reviews.
Dive Insight:
Sanford Health and Good Samaritan said a "more integrated, community-based health system with the opportunity to serve and care for individuals through the entire span of life" would be the best next steps for both organizations.
Mergers and acquisitions have become a popular strategy for hospitals and health systems to add services to their portfolio in efforts to compete at a national scale. Rising expenses, softening admissions and new entrants are all driving hospitals to band together to stake a claim on their patient populations.
A recent CB Insights report found that 55 of 61 provider M&A transactions from 2013 to 2017 involved consolidation efforts, including acquisitions ranging from large hospital systems to local networks of medical clinics. HCA and Community Health Systems had the highest number of acquisitions overall during this time period, according to the report.
The Sanford Health-Good Samaritan deal would add senior care services to Sanford's overall system. This will allow the integrated system to treat patients for a longer span of their life. As the population ages, providers are searching for ways to engage the older demographic needing more care and services.
The deal is also an attempt to get ahead of the competition as provider startups from Aspire to Oak Street Health are cropping up to serve the silver tsunami. For Sanford's part, the merger is a targeted venture to add senior care. Large merger deals such as CHS' acquisition of Health Management Associates have shown that scaling the sheer number of hospitals in a portfolio hasn't always been the best option. CHS has undergone a shedding of assets in the past two years. The hospital operator announced Tuesday it would sell the 291-bed AllianceHealth Deaconess to INTEGRIS.
Mergers such as Sanford Health-Good Samaritan are likely to continue as health systems take stock of their business and determine what services their populations need.