Marshfield Clinic Health System completes merger with Sanford Health

Marshfield Clinic Health System and Sanford Health, the largest rural health system in the U.S., have completed their merger and will now operate as Sanford Health, the companies announced this past week.

Sanford Health is headquartered in Sioux Falls, South Dakota.

Both health conglomerates had failed at previously attempted mergers with other entities. Wisconsin-based Marshfield Clinic had two failed merger attempts in its portfolio, most recently with Essentia Health of Minnesota and before that with Gundersen Health in 2019.

According to the announced plan, Marshfield Clinic will now become a region of Sanford Health, and will continue to operate under the Marshfield name. It will also continue to serve communities in Wisconsin and Michigan’s Upper Peninsula. Additionally, each organization’s respective health plans, Sanford Health Plan and Security Health Plan, will continue current operations under a common management reporting and governance structure. 

“Our partnership brings together two organizations deeply committed to advancing health care for the people and communities we serve in rural America,” Brian Hoerneman, who previously served as interim CEO of Marshfield Clinic Health System and has now transitioned to the role of president and CEO of the Marshfield Clinic region of Sanford Health, said. “I am excited about the opportunities ahead as our teams learn from each other and combine our complementary strengths, cultures and missions. Together, we will build on our shared legacy, creating a future where every person, regardless of zip code, has access to the best possible care.”  

Bill Gassen, president and CEO of Sanford Health, called the merger a historic milestone and said it paves the way for the company to advance world-class care across the rural Midwest and to accelerate vital investments in the communities it serves.

“Together, we will reimagine the future of local, patient-centered nonprofit health care by expanding services, enhancing access and harnessing innovative technologies to improve the health of our communities,” Gassen said. “We are thrilled to welcome 13,000 new employees from Marshfield Clinic Health System to our Sanford family and look forward to embracing all of the new possibilities that lie ahead.”  

The combined system will serve patients and communities across the upper Midwest, including South Dakota, North Dakota, Minnesota, Wyoming, Iowa, Wisconsin and the upper peninsula of Michigan. The organization includes nearly 56,000 employees, 56 hospitals, 4,500 providers, two fully integrated health plans, specialty pharmacies and nationally recognized research institutions. Sanford Health Plan and Security Health Plan will serve more than 425,000 members. 

The company’s leaders stressed that physicians would continue to have a critical voice in the direction of the combined organization through what they called Sanford Health’s robust physician governance structure. The new Marshfield Clinic region will have a physician executive council, which will feature Marshfield Clinic physician leaders. 

Three members of that council will serve on the system’s Council of Governors (COG): Jay Vedre, Kent Ray, and Matt Thomas.  

While Marshfield Clinic Health System (MCHS) will become a region of Sanford Health, the company emphasized that the Marshfield brand will continue to be predominant within the Marshfield Clinic region.

In addition, three Marshfield Clinic Health System board members have now joined the Sanford Health Board of Trustees. Those new trustees are Dr. George Brown, Thomas Wenzel, and Dr. Maureen McCausland. A regional board of community leaders is being established to govern the operations and strategy of the Marshfield Clinic region.  

The company also said an integration process is underway to create a unified organization. For the time being, Sanford says patients will continue to receive care from the same providers at the same locations, with no immediate changes. 

Marshfield Clinic Health System has served Wisconsin and Michigan’s Upper Peninsula with more than 1,400 providers comprising 170 specialties, health plan, and research and education programs. Primary operations include more than 60 Marshfield Clinic locations, 11 hospitals, Marshfield Children’s Hospital, Marshfield Clinic Research Institute, Security Health Plan and Marshfield Clinic Health System Foundation.

Research expansion

In announcing the merger last year, Gassen said the combined organization would lead the way in research with an emphasis on underrepresented populations, while fostering a healthy operating performance and putting patients, people and communities at the forefront.

Over the last decade, Sanford Health says it has invested more than $1.5 billion in communities across South Dakota, North Dakota, Minnesota and Iowa, including expanded access to specialty care and state-of-the-art facilities.

According to the two systems when they announced the merger, the nonprofit combination will increase access to nearly 1,000 active clinical trials and clinical studies and combined research expertise to bring new treatments and cures to patients. The systems also look to expand capabilities that allow for greater investment in clinical needs, directly supporting patients, providers, and communities.

In addition, the combined systems expect to undertake shared initiatives, including graduate medical education programs and strong partnerships with educational institutions throughout both regions.

Finally, they hope to create new opportunities for research and collaboration, robust peer networks and enhanced professional development and training.

The merger brings to an end the storied history of Marshfield Clinic as an independent health care company and ushers in a new era as a regional subsidiary. Marshfield’s final years as its own entity were marked by financial struggles. Just a year ago, in January 2024, the system issued notices to approximately 3 percent of its staff that they were being temporarily furloughed, and in April those employees found out the ‘temporary’ part was right—the company informed them they were being permanently laid off.

“This group of employees was notified of being furloughed in January 2024,” Marshfield’s communications director, John Gardner said, said in April. “We are committed to supporting affected employees during this transition period, assisting them with a severance package, and ensuring they have access to any available resources and assistance, including encouraging them to review other opportunities within the Health System in areas with specific needs.”

Gardner said then that more than 60 furloughed employees pursued and attained alternative employment opportunities with the clinic’s system, and “dozens more opted to take roles outside the organization.”