SIOUX FALLS, S.D. — Sanford Health is shelving plans to merge with Intermountain Healthcare of Utah, in the wake of the abrupt departure of Sanford's longtime CEO Kelby Krabbenhoft last week.

The two health systems made a joint announcement late Friday, Dec. 4.

Sioux Falls-based Sanford Health said it had "indefinitely suspended" the merger talks with Intermountain due to the leadership change. Bill Gassen, formerly chief administrative officer, was appointed as Krabbenhoft's successor as president and CEO last week.

“With this leadership change, it’s an important time to refocus our efforts internally as we assess the future direction of our organization," Gassen said in the announcement. "We continue to prioritize taking care of our patients, our people, and the communities we serve as we look to shape our path forward.”


WDAY logo
listen live
watch live
Newsletter signup for email alerts

The announcement comes a little over a month after leaders from the two health systems announced plans to merge, it was hoped by mid-2021.

The merger would have created a combined health system that employed 89,000 people and included 70 hospitals and 435 clinics in seven states, providing senior care in 233 locations in 24 states and insured 1.1 million.

“We are disappointed but understand the recent leadership change at Sanford Health has influenced their priorities,” Dr. Marc Harrison, president and CEO of Intermountain Healthcare, said in the joint news release. “There’s much to admire about the work that Sanford Health is doing. We continue to share a strong vision for the future of healthcare.”

The decision marks an about-face for Gassen, who told Forum News Service in a Nov. 25 interview he was committed to moving forward with the merger.

"This has been a year of unprecedented challenges, new opportunities and unexpected change," he wrote employees in a Friday email announcing plans to suspend merger talks with Intermountain.

Krabbenhoft abruptly parted ways with Sanford Health last week after an email he wrote about COVID-19 and masks drew national attention and outrage.

In the email sent to employees Nov. 18, Krabbenhoft, who is not a physician, said he refused to wear a mask as a "symbolic gesture" because he had recovered from COVID-19 and considered himself immune for months or longer, a claim not backed up by the latest scientific understanding of COVID-19.

At the time, Intermountain Healthcare released a statement expressing its steadfast intent to merge.

Gassen, as newly installed president and CEO, moved quickly to require all Sanford Health employees in all facilities wear masks. He also aligned himself with the statements of Dr. Allison Suttle, Sanford Health's chief medical officer, in calling on South Dakota Gov. Kristi Noem to implement a statewide mask mandate to reduce the spread of COVID-19, a move Noem has refused to make.

The end of merger talks with Intermountain Healthcare mark the second failed merger in just over a year for Sanford Health. A planned merger with UnityPoint Health in Iowa collapsed in early November 2019 after UnityPoint called it off.