The planned merger of the parent companies of two of the largest not-for-profit senior living and care organizations in the country, announced in November, has been called off for good after being delayed several times.
Sioux Falls, SD-based Sanford Health, which includes the Evangelical Lutheran Good Samaritan Society, said Thursday that it is discontinuing the merger process with Minneapolis-based Fairview Health Services, which includes Ebenezer Senior Living, Minnesota’s largest senior living operator.
“The significant benefits we identified for a combined system with Fairview Health Services compelled us to exhaust all potential pathways to completing our proposed merger,” Sanford Health President and CEO Bill Gassen said in a statement. “However, without support for this transaction from certain Minnesota stakeholders, we have determined it is in the best interest of Sanford Health to discontinue the merger process.”
The two organizations had intended to unite under the Sanford Health name, with both entities remaining nonprofits and maintaining their own regional presence, leadership and regional boards. Sanford was to invest $500 million in Minnesota healthcare facilities currently served by Fairview. Gassen was to serve as president and CEO of the combined system, and Fairview Health Services CEO James Hereford was to serve for a year as co-CEO.
Along the way, the deal faced questions from the Minnesota attorney general’s office, which said it was investigating the proposed transaction’s compliance with state and federal charity and antitrust laws. The office said that it received thousands of comments from the public, with questions about how the merger might affect employees, state health insurance premiums and access to care. The University of Minnesota, which has a collaboration with Fairview, and a healthcare union also reportedly raised concerns.
When the planned deal was announced in November, the health systems said that the combined entity would “provide more people access to high-quality, equitable healthcare, accelerate population health and value-based care, and drive clinical innovation to benefit rural, urban and indigenous communities across the Midwest.”
Thursday, Gassen said the decision to call off the merger was the right one for “our patients and residents, our people and the communities we serve.”
“We are extremely grateful for the support we have received from many Minnesotans who share our vision to invest in healthcare delivery and enhance access to care in both rural and urban areas,” he added. “Throughout this process, the one thing that has remained constant is the incredible pride I have in our organization and the care our people deliver every day. We are fortunate to be in a strong position, with opportunities to invest in our people and our patients, and I am excited as ever about our path forward.”
A proposed merger of the two health systems in 2013 also failed when it faced opposition from state lawmakers and the attorney general at the time, according to the Minnesota Reformer.
Sanford Health, the nation’s largest rural healthcare system, merged with Good Samaritan in 2019. The two organizations previously had partnered through a joint venture called Prospera in 2016 with five senior living communities in North Dakota.
Sanford Health has 47 medical centers, 45,000 employees, 2,800 physicians and advanced practice providers, and more than 200 Good Samaritan Society senior living and care locations.
Good Samaritan was the second largest not-for-profit multi-site senior living and care organization in the country at the time of the announcement of the planned merger, based on total number of units, according to the 2022 LeadingAge Ziegler 200 lists. It ranked No. 3 for assisted living, No. 4 for independent living and No. 1 for skilled nursing.
In mid-January, however, Good Samaritan announced plans to exit 15 states and reduce its resident and patient count by approximately 30% as it consolidated services to the Midwest.
The Fairview Health Services system includes 31,000 employees across 11 hospitals, more than 80 primary and specialty care clinics, 36 retail and specialty pharmacies, rehabilitation centers, a physician network, Ebenezer facilities and medical transportation services.
Ebenezer provides independent living, assisted living, memory care, skilled nursing, active adult and affordable senior housing, along with enhanced and transitional care and adult day services. The company also made the LZ 200 list of largest not-for-profit multi-site senior living and care organizations in the country, at No. 158 overall, No. 56 for assisted living, No. 197 for independent living and No. 104 for skilled nursing.
Ebenezer also was ranked No. 1 on a separate list in the 2022 LZ 200 publication as far as number of managed-only units and No. 5 on a list combining market rate and managed units.