Sanford Health and Good Samaritan Society Merge to Reshape U.S. Healthcare Delivery
VCBeat (WeChat Official Account: vcbeat) has learned that Sanford Health, a prominent U.S. healthcare services organization, has recently completed its merger with the Evangelical Lutheran Good Samaritan Society under the leadership of CEO Kelby Krabbenhoft. This merger will expand Sanford Health’s operations to 26 states across the United States, while its global clinic network will extend to nine countries worldwide.
Sanford Health, a historic nonprofit integrated healthcare services organization headquartered in Sioux Falls, South Dakota, traces its origins to the Sioux Falls Hospital, founded in 1894, and St. Luke’s Hospital, established in the early 20th century. These two institutions evolved into the comprehensive healthcare organizations known as the Sioux Valley Health System and MeritCare Health System, respectively. In 2007, following a $400 million gift from Denny Sanford, the Sioux Valley Health System was officially renamed Sanford Health and subsequently acquired MeritCare on November 2, 2009. In 2011 and 2012, Sanford Health completed mergers with Bemidji and Medcenter One Health Systems, respectively.
Sanford Health operates 44 hospitals and employs approximately 28,000 staff members. Its merger with Good Samaritan has brought in 19,000 experienced new employees and expanded its resource base across emergency care, nursing, hospice, rehabilitation, and home health services. This integration fills gaps in Sanford Health’s home and community-based services and further expands its nationwide footprint.
David Horazdovsky, CEO of Good Samaritan, stated that he sees significant growth opportunities, as both organizations and investors anticipate that population aging driven by the baby boomers of the last century will make post-discharge private rehabilitation care a new key focus for health systems.
Kelby Krabbenhoft, CEO of Sanford Health, stated that the organization will continue discussions with other healthcare institutions regarding acquisitions or joint ventures to further expand its long-term care business. “Following the merger, Sanford Health’s strategic focus will be on strengthening connections with acute care services. Small rural hospitals, mid-sized hospitals, and even higher education institutions all require facilities to place patients, yet the existing healthcare system fails to meet patients’ hospitalization needs.”
Expanding healthcare operations through mergers is not uncommon in the U.S. healthcare industry. Non-profit health system ProMedica rapidly expanded its core business after acquiring the struggling nursing home provider HCR ManorCare. Humana, together with private equity firms, acquired Kindred Healthcare and Curo Health, directly becoming the largest hospice care operator in the United States. LHC Group and Almost Family also merged to become the second-largest home health service provider in the country.
Nevertheless, some rating agencies remain skeptical about this type of merger. In response, Kelby Krabbenhoft stated, “The healthcare landscape in the surrounding regions of this country is dire; no one has truly focused on the quality of healthcare here, and Good Samaritan’s implementation plan helps address this issue. They need funding and momentum to execute it, while we also require resources, as long-term care remains an underappreciated service.”
Evangelical Lutheran Good Samaritan Society is the largest nonprofit provider of senior care and services in the United States, with its headquarters in Sioux Falls, South Dakota, and operational centers across the country. Good Samaritan operates more than 200 offices in 24 states, employs over 19,000 staff members, and serves approximately 28,000 residents.
In 2018, Good Samaritan agreed to merge with Sanford Health. The merger received regulatory approval and officially took effect on January 1, 2019.