Sanford’s Krabbenhoft tackles job-related rumors while planning big moves

Aug. 28, 2018

Sanford Health CEO Kelby Krabbenhoft started last week in meetings in Chicago, working through details of a health system merger there that he hopes to announce before the end of the year.

He then spent the next few days at Sutton Bay Golf Course in central South Dakota, with some board members and members of his leadership team.

He was not, as a growing chorus of rumors claimed, asked to leave his job nor did he contemplate resigning, he said.

“If it wasn’t so sad or scurrilous, I’d laugh about it,” he said. “But people get worried about things like that. I think it’s unfortunate. I’ve got to believe my own people heard that and went ‘right’ or ‘good grief.’ ”

He encourages his team, which includes more than 10,000 in Sioux Falls, to “show up for work like I do. We know what we’ve got to get done at Sanford. We’re a tight family. We’re having the biggest year ever. To the degree that they have to put up with this garbage, I apologize for that. But I can’t own such ridiculousness. These things were just way out of line. I find myself not even wanting to dignify it because it was so stupid. But to the degree that families and other people get hurt by this, that’s where … Kelby Krabbenhoft takes this real serious. We’re in the business of taking care of people and each other, and where people get hurt, that brings out a pretty ugly side of me.”

Krabbenhoft vowed to find “the reason behind these really hurtful and inappropriate things,” he said. “I don’t want to comment on it because I think a person in my position (doing so) … actually dignifies such manure. It’s always intriguing to add the junk that was in those rumors. That goes on from Washington, D.C., to California, but I don’t tolerate that here.”

Ironically, he had just finished a routine annual performance evaluation from his board. “It was probably the most significantly positive one I’ve ever had,” he said.

He has committed to retiring sometime in 2023 at age 65 and has no plans to change that, he said.

“My board has had discussions about wanting me to stay beyond that because I’m healthy and having fun, but at this point I’m staying with my plan,” he said.

His board chairman also issued a statement of support.

“Kelby Krabbenhoft is the president and CEO of Sanford Health. As he has demonstrated over the past 22 years at Sanford, Kelby is a visionary leader positioning Sanford as a world-class health care system,” board chairman Mark Paulson said.

“He has the full support and confidence of the board. I look forward to the future with him at the helm.”

Sanford is coming off one of its strongest years ever. Its fiscal year runs July through June, and the most recent set a revenue record while maintaining net income.

“If it’s relevant, and I think it is, I just concluded my 22nd year at the helm and … we’re probably poised to grow the company way beyond our expectations,” Krabbenhoft said. “Everyone is feeling a real sense of positive stress here.”

Merger movement

Krabbenhoft is expanding Sanford at a robust pace.

Its merger with The Evangelical Lutheran Good Samaritan Society now will be done in November instead of January.

“It’s all hands on deck with Good Sam and Sanford,” he said.

Good Samaritan had been streamlining operations, and “I think they’ve seen the merger implications will allow that to happen probably in a way that is less traumatic for the organization but also include a growth equivalent or element that really wasn’t there before, and that’s why it’s such a win-win for both organizations.”

The national Good Samaritan footprint already is bringing Sanford into new markets, including the Phoenix and Orlando areas, as well as Rapid City.

Krabbenhoft met with the CEO of Rapid City Regional Hospital a few weeks ago, and today Sanford hosted a group of Rapid City community leaders in Sioux Falls to learn more about Sanford’s research, insurance company and children’s hospital.

Sanford has a history of supporting pediatrics and 16 other subspecialities in Rapid City, he said.

“Because of the several nursing homes and congregate living centers we have in Rapid City, it really is a legitimate and appropriately responsible thing for me to have Sanford people there now looking at how do we grow that, in what ways, how do we work with the business community and physicians there. I’ve been very respectful about never going into a community we’re not asked to go to, and now because of the merger, I have the responsibility to go to Rapid City. We’re working through that and looking forward to it.”

The merger in Chicago, which includes a west-side health system, is on track for a board vote to move forward before the end of the year, Krabbenhoft said.

“I’m really looking forward to being able to name them,” he said, calling it a $1 billion health care organization of “very good friends and allies.”

Conversations also continue in the Twin Cities, where Krabbenhoft on Wednesday will meet with the CEO of HealthPartners, an insurance company with associated hospitals.

“We have a significant affinity, a good relationship,” he said. “They’re helping us serve the Medicare population in North Dakota and South Dakota, and it’s a really good partnership. I’m also talking with another major insurer in Minnesota about similar things. I think the end of 2018 could be more than interesting for Sanford. It’s exciting.”

Major events ahead

Two major events before the end of the year will advance Sanford’s brand on national and international stages.

The Sanford International is expected to draw 80,000 people, and the golf tournament that’s part of PGA Tour Champions will be broadcast nationally and potentially internationally.

“They’re looking at $20 million in economic development coming from that, and individual businesses are starting to feel their piece of it. You’re starting to hear the noise,” he said. “That’s a dream come true for us. The players are excited about it. It’s new and unique, and I think they’re going to be taken care of like they never have before.”

In December, Sanford will award the inaugural Sanford Lorraine Cross prize for breakthrough research. It’s a $1 million honor that Krabbenhoft plans to contribute to in a few years.

“My wife and I have decided we’re going to give $1 million to that after I retire,” he said.

In a meeting recently, he said he was struck looking out at a crowd of about 1,000 Sanford scholarship recipients whose parents work at the health system. He talks with pride about the response he received from students saying “no other health system is giving those kind of scholarships anywhere” and the intentional approach his organization is taking to building its future workforce.

“I really believe Sanford had to play a role in it,” he said. “I’m really proud of that. It builds a generation of young people coming into Sanford with a loyalty that starts before they even get here. I get to connect with a whole bunch of 20-somethings that know Kelby Krabbenhoft and they’ll remember. That’s why these rumors really don’t matter much to me. I’ve got much better and bigger things to worry about.”

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Sanford’s Krabbenhoft tackles job-related rumors while planning big moves

Despite rumors last week that he was no longer running Sanford Health, Kelby Krabbenhoft says he’s not going anywhere — and releases big plans to grow the system statewide and beyond.

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