Dive Brief:
- South Dakota-based nonprofit Sanford Health is trying its hand again at expanding more deeply into Minnesota, announcing on Friday it had signed a definitive agreement to add Twin Cities-based North Memorial Health to its network.
- As part of the deal, North Memorial will become a subsidiary of Sanford. North Memorial CEO Trevor Sawallish will lead Sanford’s Twin Cities region and Sanford chief executive Bill Gassen will continue to oversee the combined company.
- The nonprofits expect the deal to close this year if they clear regulatory processes, according to a news release.
Dive Insight:
Sanford operates 58 hospitals and associated clinics in the Dakotas, Iowa and Minnesota.
The health system has prioritized expanding across the Midwest. Last year, it closed a mega-merger with Wisconsin-based Marshfield Clinic, adding a new division and 11 hospitals to Sanford’s portfolio.
However, expanding more deeply into Minnesota, where Sanford operates or affiliates with 20 medical centers and 74 clinics, has historically proved more difficult for the health system. Sanford abandoned two attempts to merge with Minneapolis-based Fairview Health Services after facing significant political and regulatory hurdles, including scrutiny from the Minnesota’s attorney general.
In its new merger attempt, Sanford says it will modernize and sustain operations at North Memorial and invest $600 million into its two hospitals, safety-net provider Robbinsdale Hospital and Maple Grove Hospital. It plans to double the size of the hospital in Maple Grove, including by adding inpatient capacity, increasing the local workforce and more.
The merger would serve as a lifeline for North Memorial, which has struggled in recent years with persistent financial losses. Its hospital in Robbinsdale has laid off workers, with Sawallish telling local media in 2024 that the hospital was at a “breaking point.”
“We’ve been open about the financial and regulatory pressures and the rising costs that make it harder to protect access to care on our own,” Sawallish said in a statement. “This partnership is about staying strong for the long term — so our patients can keep getting the care they need close to home and our teams have the support they deserve.”
Minnesota regulators said they’re reviewing the deal. On Friday, the state’s attorney general said it was soliciting feedback from the public.
“As we have done and are currently doing with other healthcare transactions, we are conducting a thorough review of this potential acquisition to ensure it complies with the law and is in the public interest,” said Minnesota Attorney General Keith Ellison. “Proposed health care consolidation requires careful examination.”
Clarification: This story has been updated to clarify details about Maple Grove hospital.
