Sanford Health combines with Watertown-based health system

Oct. 31, 2025

Watertown-based Prairie Lakes Healthcare System has become part of Sanford Health.

The combined organization was finalized this week and brings Prairie Lakes, an 800-employee organization, into Sanford, which now totals more than 53,000 employees.

Prairie Lakes was founded in 1986 after two hospitals in Watertown came together: St. Ann and Memorial. The system cares for 90,000 people in a 10-county region of northeast South Dakota and western Minnesota.

Prairie Lakes Healthcare System has 60 providers and is licensed to operate 81 acute care hospital beds, including labor and delivery, telemetry, critical care and general hospital. Hospital services also include a 24-hour emergency department, surgery capabilities, interventional cardiology and services providing diagnostics and imaging.

The merger with Sanford is the evolution of a decades-long relationship.

For more than 20 years, Sanford has operated a clinic on the Prairie Lakes campus with 11 physicians, seven advanced practice providers and 125 employees.

“Sanford Health and Prairie Lakes have always worked collaboratively in support of our communities,” said John Allen, president and CEO, who will continue to lead the Watertown area.

“In the last year, we have begun working together on areas such as infectious disease, interventional radiology, and we had been planning to migrate to Sanford’s electronic health record, Epic. ”

As an independent rural health system, “we have all the challenges of the 21st century, including challenges regarding recruiting, labor market challenges with our supply chain and challenges with our payer relationships,” he continued. “The relationship with Sanford will really allow us to bolster those things while allowing improved opportunities in health care.”

The key consideration in the deal was “the lens of opportunity for our teams, our providers, our employees and for patients,” he added. “This represents an incredible improvement and incredible growth in our ability to create connected care, integrated care and improved access to specialties, and for our employees the ability to tap into the deep specialties and research that Sanford Health has to offer.”

For Sanford, Watertown and the Prairie Lakes footprint “will be a significant location and hub within our Sioux Falls market — their size and scope, really great care they’ve provided to the region over the last few decades,” said Andy Munce, president and CEO of Sanford Health, Sioux Falls region.

“Our vision is to continue to support those and also expand with subspecialty services, partnerships with our virtual care initiatives, so we really view this as a hub and support for the entire northeast section of South Dakota and into western Minnesota.”

The community is strategically located between Sanford’s larger offerings in Sioux Falls and Fargo.

“It’s a really key location along I-29 that we can bridge together and provide another level of care to the communities in that region,” Munce said.

One member of the Prairie Lakes fiduciary board will transition to the Sanford Health Network board of directors, while the current Prairie Lakes board will become a community advisory board consistent with other communities in Sanford’s network.

“Both organizations are mission-driven, not-for-profit health systems, and we share a common bond in being dedicated to caring for the communities we serve,” Allen said. “This combining of the organizations is really born of our opportunity to serve the area and consumers within it more completely and an opportunity for our providers and employees.”

Over time, Prairie Lakes Healthcare System will transition to the Sanford Health name. Patients will continue to see their current provider.

The partnership includes financial investments in the Watertown community, “making lasting impacts on health, wellness and quality of life in the region for many years to come,” according to both organizations, but it has not been determined yet what forms that will take.

The deal is the second announced by Sanford this month. An acquisition of Black Hills Plastic Surgery is expected to be finalized by the end of the year.

Sanford Health to acquire Black Hills Plastic Surgery

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