SIOUX FALLS, S.D. (AP) — Iowa’s UnityPoint Health and South Dakota-based Sanford Health have abruptly halted plans to merge.
The Des Moines Register reported the development Tuesday, saying Sanford CEO Kelby Krabbenhoft confirmed the news. UnityPoint officials declined to immediately comment.
No reason for the decision was given, but Krabbenhoft said in a statement that those who worked on the merger “are disappointed that the UnityPoint Health board failed to embrace the vision.”
In June, the two regional health care systems announced they would be combining to create one of the largest nonprofit health care systems in the country, with more than $11 billion in operating revenue.
The merged organization would have employed more than 83,000 staff and 2,600 physicians.
UnityPoint operates 32 hospitals — including Waterloo’s UnityPoint Health-Allen Hospital — and has relationships with 280 physician clinics throughout Iowa, western Illinois and southern Wisconsin.
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Sanford Heath’s organization includes 44 hospitals, 1,400 physicians and more than 200 Good Samaritan Society senior care locations in 26 states and nine countries.
UnityPoint is one of Iowa’s two dominant hospital and clinic systems. MercyOne is the other.
The proposed merger had represented the latest example of consolidation within the health care industry nationwide.
Hospital systems have merged to form multibillion-dollar health care companies, and independent hospitals and physician clinics have joined systems to save money and expand access to treatment and information technology.
In an open letter published at the time the merger was announced, UnityPoint President Kevin Vermeer said it, “represents an opportunity to get bigger, but not for the sake of growth alone. If we get bigger in terms of geography, it’s so we can do better, on your behalf. We are not being sold or acquired — we’re intentionally shaping a new path forward, so we can continue to be your partner in health.”
Critics had warned the opposite would happen with the merger, through cost increases for patients and negatively impacted health outcomes.