Consulting organization suggested UnityPoint Health and Sanford Health talks

CONTRIBUTED PHOTO
The UnityPoint Health-Marshalltown Medical Park across from Marshalltown Community College is shown. Offering numerous services to outpatients, it was completed at a cost of $35 million and is considered state-of-the art. The award-winning UnityPoint Wound Care Clinic is located here.

A consulting organization who has advised UnityPoint Health and South Dakota-based Sanford Health suggested the two large health care providers discuss a merger, UnityPoint Health officials said.

“Conversations began between UnityPoint Health and Sanford Health upon the introduction of an external consulting organization that has worked on strategic and operational priorities for both health systems,” said UnityPoint Health officials.

Officials from both UnityPoint Health and Sanford Health announced two weeks ago

the two health care providers plan to merge, in an agreement that would create a sprawling health system in the northern Plains and Midwest.

UnityPoint Health owns Marshalltown’s hospital and several others in Iowa. UnityPoint is one of Iowa’s two dominant hospital and clinic systems. The MercyOne system is the other.

“Sanford and UnityPoint are two successful systems intent on controlling our own destiny,” said Kelby Krabbenhoft, president and CEO of Sanford Health in a news release. “We believe that in the very near future, fully integrated health systems will drive greater value through affordable options for high-quality health care to patients, governments and employers. The combination of Sanford and UnityPoint will help both organizations better meet this need, creating a new system positioned for continued growth across a broad geography.”

​Krabbenhoft would keep the same title after the merger and Kevin Vermeer, current president of UnityPoint, would serve as senior executive vice president. With more than $11 billion in operating revenue, the combined company would rank among the top 15 largest nonprofit health systems in the country, the organizations said in the release.​

In a letter, Vermeer said UnityPoint patients will not see changes in “your physician, care team, hospital, insurance coverage.”

It’s unclear at this time how this will fully impact the Marshalltown operation.

“In the months ahead we will be working closely with Sanford Health to determine exactly what our combined workforce might look like and ensure we have the right roles for the care people will need both today and into the future,” UnityPoint said in a statement responding to the T-R’s request for information on the Marshalltown impact. “Sanford and UnityPoint Health share a commitment to ensuring we have the right team members, physicians and leaders to deliver a world-class personalized experience.

“That said, no organization can ever commit to no reductions or layoffs. Our goal is to preserve our talented team members while meeting the sustainability needs of a high-performing organization.”

The nonprofit has been doing ongoing assessments in the area to better grasp how they should be serving the city and surrounding communities. That assessment comes after the Marshalltown hospital posted a $7 million loss on the year and closed its intensive care unit in November.

UnityPoint Health officially took possession of the hospital after purchasing Central Iowa Healthcare assets during bankruptcy proceedings in 2017. The operation currently includes a hospital downtown and a new facility specializing in outpatient services on the south side of town.

“The boards of directors for UnityPoint Health and Sanford each voted to approve a letter of intent. At the end of the due diligence process, a second vote will be required of both boards to approve the definitive agreement and finalize the partnership,” UnityPoint said in a statement.

The (Sioux Falls) Argus Leader reported that if the merger is approved by regulators, it could be finalized by the end of this year.

Local reaction about the talks has been relatively quiet.

Financial advisor Sage Point’s Gary Schaudt of Marshalltown said he believes it is because not much is known about the financial resources of both providers since they are not-for-profit.

Councilor At-Large Bill Martin, a retired educator and long-time local resident said he was speculating UnityPoint Health and Sanford Health are in merger talks in efforts to solidify their markets while cutting costs.

Shortly before the proposed merger announcement, the Argus Leader published a story alleging a top Sanford Health surgeon had defrauded millions from the government. A 111-page complaint, filed in federal court by two Sanford doctors in August 2016 also alleged patients were harmed.

The lawsuit alleged Dr. Wilson Asfora a neurosurgeon with Sanford, defrauded the government by performing unnecessary surgeries.

The court filing, brought by Drs. Dustin Bechtold and Bryan Wellman, alleged Krabbenhoff ignored repeated warning and complaints Asfora was performing unnecessary surgeries.

“Since this is a Sanford Health matter, we have no information to share at this time,” said a UnityPoint Health spokesperson.