Sanford Health, Twin Cities-based North Memorial Health agree to merge

Sanford Health has reached an agreement to merge with Minnesota-based North Memorial Health, marking a new move into the Twin Cities market for the Sioux Falls-based health system.

North Memorial is an independent nonprofit health system that has two hospitals in the Twin Cities area: Robbinsdale Hospital, one of five Level 1 trauma and emergency services centers in Minnesota, and Maple Grove Hospital, which serves a fast-growing area of the metro and has the largest birth center in Minnesota.

“North Memorial has had an incredible reputation in the region for years and years,” Sanford Health president and CEO Bill Gassen said. “They are just a very well-respected organization. We’ve been planted in the state of Minnesota providing world-class care for patients for many decades, and this provided great opportunity to come together with an organization that brought complementary capabilities.”

The combined organization would create the Twin Cities region of Sanford Health, led by Trevor Sawallish, who became CEO of North Memorial in 2024 after previously serving as chief operating officer.

Bill Gassen and Trevor Sawallish

Sawallish has been candid about financial challenges his system has faced in recent years, citing 75 percent of patients at Robbinsdale Hospital are using government programs for payment. It led to a $50 million loss last year, largely because of uncompensated care.

Shortly after becoming CEO in 2024, he said the system was nearing  a fiscal “breaking point” in a report to the Maple Grove City Council, according to a local news outlet. The pressure on Robbinsdale also held up a needed expansion in Maple Grove, where the emergency room was seeing twice as many patients as it was designed to handle.

“We’ve absolutely been transparent about our financial challenges, but this was more than that,” Sawallish said, adding that the system aimed to reach a position where it could better care for people.

North Memorial began reaching out to 22 healthcare organizations nationwide in recent months that it felt would be a fit. Sanford Health wasn’t one of them. But after identifying a dozen key criteria for a merger partner, “we recognized … Sanford Health was probably one we wanted to talk to, so I made the call to Bill and asked if they wanted to participate in the process,” Sawallish said.

“With Sanford, we found a really good match for values and culture. It was a very clear prioritization of the patient. That was one of the key reasons we value them as the best match.”

Sanford Health will build on its presence in Minnesota with the merger. Its concentration in the western half of the state includes a geography from International Falls to Thief River Falls, Bemidji and Worthington. Sanford cares for nearly 300,000 patients annually in Minnesota and has nearly 10,000 employees there.

The addition of North Memorial will bring 22 clinics offering primary care and more than 45 specialties, as well as 450 physicians and advanced practice providers and 6,800 team members. The partnership will include North Memorial Health’s statewide, hospital-based ground and air EMS programs, North Memorial Health Ambulance and North Memorial Health Air Care.

Sanford Health’s president and CEO would serve as leader of the combined organization, based in Sioux Falls. Sanford has 55,000 employees and serves more than 2 million patients and nearly 415,000 health plan members across the Upper Midwest, including South Dakota, North Dakota, Minnesota, Wyoming, Iowa, Wisconsin and the Upper Peninsula of Michigan. It includes a network of 58 hospitals, 289 clinic locations, 145 senior care communities and 4,500 physicians and advanced practice providers. Sanford Health also includes Lewis Drug, a pharmacy and retail chain with 60 locations in three states and nearly 190 pharmacists.

Gassen points to the combined organization as a way for Sanford to benefit from North Memorial’s expertise, including in Level One trauma services and emergency medical services across a geography of 8,500 square miles.

“That will be a benefit to patients,” he said.

Sanford’s most recent annual revenue was nearly $11.7 billion in 2025, which reflects its merger with Marshfield Clinic Health System in Wisconsin. Operating income was nearly $211 million, or a 1.8 percent operating margin.

“It’s not a mystery that for hospitals and health systems across the country, it’s a challenging time now as you try to maneuver through different headwinds,” Gassen said.

“But Sanford Health has continued to thrive as a result of the way in which the organization is structured. We benefited from coming together with great organizations for several years now, and as we do, we continue to learn from each other and get the benefits of good strategic size and scale, and it’s built a very resilient organization.”

As part of the merger agreement, Sanford will double Maple Grove Hospital, growing the state’s largest birth center, expanding emergency care and adding inpatient and surgical capacity, while improving access to cardiology and interventional radiology to support minimally invasive procedures.

To meet rising demand in the northwest metro and central Minnesota, the combined system also will expand campus access to primary and specialty care for patients of all ages.

“We are very much a destination for moms and families who want to have a great birth experience,” Sawallish said. “That is a key reason we are looking to expand that hospital.”

Once that expansion is done, North Memorial will have about 650 beds between its two hospitals. By comparison, Sanford Health USD Medical Center in Sioux Falls has 545 beds.

The merger with North Memorial “is a great opportunity for us to continue to grow where we’re planted and continue to meet the needs of our patients, whether it’s in Minnesota or across the system,” Gassen said.

The expansion “absolutely” serves as a foundation for future growth in the Twin Cities region, he added.

“This presents an incredible opportunity for us to continue to build out the services we provide today,” Gassen said. “It creates a unique opportunity to extend our virtual care services over 80 specialties into those communities, and someday into the future, it should open the door for us to bring more choice to the market through Sanford Health Plan to provide care and coverage.”

The merger has been approved by both systems’ boards of trustees. Post-merger, the Sanford Health Twin Cities reach will have a local board of directors representing the broader community to provide oversight, including medical staff matters.

Two North Memorial Heath board members will transition to serve on the Sanford Health board of trustees, the governing body of the combined system. They include Charlie Weaver, a seasoned executive, attorney and public policy leader who served for 20 years as executive director of the Minnesota Business Partnership, and Reuben Moore, a longtime health care executive who serves as president and CEO of Minnesota Community Care, one of the largest federally qualified health centers in the state.

The merger requires approval from the Federal Trade Commission and the Minnesota attorney general. The process has started with both.

The deal is anticipated to close sometime this year, subject to those approvals and other closing conditions.

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