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Published November 03, 2009, 08:20 AM

Sanford Health and MeritCare complete merger

By: Patrick Springer, The Fargo Forum

Sanford Health and MeritCare tied the corporate knot Monday in a merger that creates what’s believed to be the nation’s largest and most rural health system coverage area.

The union results in a nonprofit health network extending along and beyond the Interstate 29 corridor with a service territory of 130,000 square miles and 17,000 employees, including more than 800 physicians.

The merger, approved unanimously by the MeritCare board, culminates months of talks and results in an organization with total assets of $1.9 billion.

Before a backdrop saying “Stronger Together,” Kelby Krabbenhoft, chief executive of Sanford and the merged health system, stood with Dr. Roger Gilbertson, MeritCare’s outgoing CEO, who announced he will be retiring effective today.

“This is the last day of MeritCare and the first day of a new era,” said Gilbertson, who has served as MeritCare’s top executive since it was formed 17 years ago from the merger of St. Luke’s Hospitals and Fargo Clinic.

“Nobody could be more pleased than I am to announce that.”

Krabbenhoft, who said the message to the public should be one of continuity and stability, said his newly reshuffled management team will present its proposal for a strategic plan to the board in June.

“Today marks a new beginning,” said Krabbenhoft, who noted Monday also marked the 120th anniversary of statehood for both North Dakota and South Dakota.

The merger did not involve an acquisition, so no money exchanged hands in the transaction. Krabbenhoft said merge costs are expected to total about $700,000. “You’re looking at one of the ‘econo mergers’ of all time,” he said.

Messages sent to patients said they can still see their MeritCare doctor, come to the same facility and still use their health insurance.

Patients also were told they will benefit from expanded primary and specialty care and better access to care, especially in rural areas, as well as growth and a commitment to jobs and economic development.

Also Monday, Krabbenhoft announced his new executive team, including six executives, three each from Fargo-based MeritCare and Sanford, based in Sioux Falls, S.D.

“That wasn’t as planned as it looks, but it’s a great convenience,” he said. The system’s top management team, which also includes a second tier of managers for a northern and southern region:

•Dave Link, senior executive vice president (Sanford). Responsibilities involve corporate development and research, Sanford Health Plan, foundation and information technology.

•Becky Nelson, senior vice president and chief operating officer (Sanford). Responsibilities involve health services in both regions, including clinic, hospital and health network.

•Lisa Carlson, chief financial officer (MeritCare). Responsible for financial management and operations, as well as reimbursement.

•Paul Richard, chief legal officer (MeritCare). Oversees legal affairs, public policy and compliance, as well as risk management and assurance.

•Bill Marlette, treasurer (Sanford). Responsible for investments and asset management as well as financing capital projects and enterprises.

•Andrew Richburg, executive vice president (MeritCare). Oversees planning, marketing, corporate communications and public affairs.

A physician to serve as chief medical officer for Sanford Health & MeritCare is yet to be named.

Dr. Bruce Pitts will serve as president of MeritCare Medical Group, and Dennis Millirons will start Nov. 16 as president of MeritCare Medical Center, while Doug Vang will be president of MeritCare Health Network.

Sanford Health & MeritCare’s North Dakota corporate offices will be on the fourth floor of Wells Fargo Bank, 406 Main Ave., Fargo.

Planning will begin immediately for expansion of facilities in Fargo, including an expanded Roger Maris Cancer Center and a medical complex at Agassiz Crossing in southwest Fargo.

Krabbenhoft said the cost of changing signs for the new health system will be “non material.” The Sanford Health & MeritCare name will continue for the foreseeable future, but Krabbenhoft added:

“We should expect that folks in this region would want a singular identity,” adding that it will be critical for people to relate to one organization.

“That’s something we’re going to work on and talk about,” Krabbenhoft said, adding it might be part of the strategic plan that will be unveiled in June. “It’s not the priority now.”