Weeks after agreeing to delay its merger efforts to appease Minnesota regulators, Good Samaritan Society’s parent company is facing a fresh challenge in South Dakota.
A union representing hundreds of healthcare workers whose jobs could be affected by Sanford Health’s proposed $14 billion merger with Fairview Health is asking South Dakota lawmakers and the attorney general to review the plans.
A Minnesota Senate committee on Tuesday held an informational hearing on the merger, with testimony from the leaders of both health systems offering information in response to oversight requests.
The merger would bring together Sanford’s Evangelical Lutheran Good Samaritan Society, currently the nation’s largest nonprofit skilled nursing provider, and Fairview’s Ebenezer Society, which was ranked No. 104 in skilled beds in the 2022 LZ200. The combined organization also would have 54 hospitals and 600 care sites.
“The fundamental changes in healthcare require us to think differently about what we do today to meet the needs of our communities tomorrow,” Sanford Health said in a statement to McKnight’s Long-Term Care News Tuesday. “This merger is about taking critical steps to provide the necessary financial sustainability to serve our communities for generations to come. It’s about increasing access, improving quality and expanding services. Our combined system will be better for patients, caregivers, employees and our communities.”
But a leader with the International Association of Machinists and Aerospace Workers, which represents about 10,000 healthcare workers, told the Argus Leader last week that he has concerns about patient care, rising costs and potential closures under that combined entity.
“Much of the coverage, and much of the focus has been in Minnesota,” Director Shane Brinton told the newspaper. “We’re raising the alarm here, because we have a concern that this may be just as impactful for the Dakotas.”
Minnesota’s attorney general has held a series of public hearings on the merger as part of a wider investigation on the implications. In response to his concerns, Sanford and Fairview, the parent organizations of the Evangelical Lutheran Good Samaritan Society and Ebenezer Senior Living, agreed in mid-February to extend the timeline by two months.
“In embarking upon this work, our focus remains on ensuring stability for our staff and continuity of care for the patients who entrust us with their care,” Fairview President and CEO James Hereford testified at the Senate Health and Human Services Committee hearing Tuesday evening, noting that the two health systems have submitted tens of thousands of pages to Minnesota officials to aid their investigation. “We’ve committed that this merger is not one of reduction but rather of growth. It’s about expanding services and doing more for those who come to us for care. It’s about bringing advanced care to more underserved communities.”
Union brings new pressure
IAM’s Brinton wants to see more scrutiny in South Dakota, where Sanford and Good Sam are based. He conceded last week though, that the union had yet to make such a request official.
“What we’re facing is a challenge, because with hospital mergers, all the data shows this tends to raise prices for patients without improving the quality of services,” Brinton said. “What tends to happen is that prices go up for patient care and executive compensation also tends to go up.”
He also raised concerns about layoffs and reduced access if facility closures follow the merger.
But Sanford officials have said protecting access in a more financially challenging operating environment was a key consideration in pursuing the merger.
“As a combined system, we can do more to expand access to complex and highly specialized care, utilize innovative technology and provide a broader range of virtual services, unlock greater research capabilities and transform the care delivery experience to ensure every patient receives the best care, no matter where they live,” Sanford CEO Bill Gassen said in November.
Good Sam currently has more than 9,000 skilled beds, but in January, leaders announced plans to exit 15 states and reduce its resident count by roughly 30%. By consolidating to seven Midwest states, the organization will reduce its payroll by an estimated 5,000 staff members.
Brinton pointed to the chain’s decision to close other facilities in 2021 and 2022 as evidence of a merger’s impact. Good Sam aligned with Sanford in 2021.
“For us, it’s critical that rural health services be protected … that prices not go up for patients and that our workforce be protected. Based on the way that the merger happened between Sanford and Good Samaritan Society … our position at this time is that this merger should not happen,” Brinton said.
For now, however, South Dakota Attorney General Marty Jackley said he is not planning hearings, but his office “continues to monitor the situation to ensure compliance with South Dakota requirements.”