Sanford, Good Samaritan finalize merger

Jan. 2, 2019

Sanford Health and The Evangelical Lutheran Good Samaritan Society have officially become one.

The move solidifies Sanford’s position as the largest employer based in Sioux Falls, with approximately 50,000 people spread across 26 states, and brings together two entities with roots in the Lutheran Church.

The combined organization offers health services spanning the continuum of life, including clinics, hospitals, health insurance and senior care services.

Sanford president and CEO Kelby Krabbenhoft called it a historic opportunity to change the health care landscape, adding that in the past six months “the right people and the right issues” have been put in front of the deal in preparation for today.

“So the impact would be well thought out, well organized and applied now. There’s been a lot of excitement about today,” he said. “All the horses are in their stalls, and I think they’re ready to be let out, so today is the day.”

David Horazdovsky remains CEO of Good Samaritan and has joined Sanford’s corporate leadership team. Randy Bury has transitioned to president of Good Samaritan from his previous role as Sanford’s chief administration officer and will oversee daily operations.

“Dave joins me and my team, so we can take full advantage of the thing we haven’t been talking about a lot, but that is the opportunity to start thinking on a national level. That’s what Good Sam brings us as a responsibility,” Krabbenhoft said.

“And there’s a tremendous amount of confidence and security there, as Randy knows both organizations so well, so it’s a day of opportunity.”

Bury’s replacement is Matt Hocks, who previously reported to him as a chief operating officer.

The organizations began exploring an affiliation in late 2017. Good Samaritan’s membership overwhelmingly voted in favor of the affiliation in June 2018, which cleared regulatory review before closing.

The merger had originally been targeted for Jan. 1, 2019, accelerated to November 2018 and then returned to the original timeline.

That will align with Sanford’s new fiscal year, which used to start July 1 but is transitioning to Jan. 1.

Within Good Samaritan, the mood is captured by the word “excitement,” Horazdovsky said.

“I appreciated as Kelby and I worked early on crafting mission, visions and values, it’s led all our conversations,” he said. “There’s been a lot of good work going on over these last months as we prepare for a start now. It’s not like we don’t know who’s going to do what, but we’ve thought it through it a comprehensive way, and that means engaging our folks at national campus and in leadership throughout the country. They’re very ready, and that process has allowed them to see the opportunity before them.”

In Sioux Falls, there are about 1,300 Good Samaritan employees and 10,000 Sanford employees.

Bury has done more than a dozen town hall meetings with Good Samaritan staff in the past month, including some that were broadcast to remote sites.

“They were asking when we get started and how to get things rolling as quickly as possible. Everybody was positive and upbeat and looking forward,” Bury said.

Some operational functions will find synergy within the larger Sanford organization but retain a dedicated Good Samaritan team, he said.

“But the leadership will be closely connected to the rest of the organization, so, for example, we don’t end up with separate marketing departments doing their own thing; that doesn’t make sense if you’re going to be one organization. So it’s really a partnership where those folks will closely coordinate.”

There is no plan for staff reductions, he said.

“We don’t see that in the cards. Our struggle is much more commonly built around how we’re going to find employees not how to get rid of employees.”

He’s also taking a look at the best use for vacant space at the Good Samaritan national headquarters in southwest Sioux Falls, which completed a major expansion a few years ago.

“My guiding principle is let’s fill it up,” Bury said. “If we’re leasing space in town, why not use the national campus. We don’t have the dominoes moving around, but I think within a few months would be the goal that we will have it full.”

In the meantime, this marks the week that Krabbenhoft annually meets with his leadership team to talk priorities for the year.

Good Samaritan and the opportunity for national expansion it presents will be an integral part of that conversation, he said.

“Especially this time of year, I’m really excited about their Arizona operations,” Krabbenhoft half-joked.

“I know David is going to weigh in heavily and probably bring forward his top five because he’s been watching and nurturing those relationships for a while. But the opportunity … in locations we’ve never been before as Sanford and potentially other partnerships or mergers is really intriguing to my team. That’s our stock and trade. That’s our nature to be looking at those opportunities. So in all seriousness, I think Arizona is one of them, but beyond that there will be three or four others.”

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Sanford, Good Samaritan finalize merger

Sanford Health and The Evangelical Lutheran Good Samaritan Society have officially become one.

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