Good Samaritan-Sanford Merger Links Health System, Senior Housing

Evangelical Lutheran Good Samaritan Society, one of the largest non-profit senior living providers in the U.S., is joining forces with non-profit health system Sanford—the latest in a series of integrations between major health systems and senior care providers.

Good Samaritan and Sanford signed an affiliation agreement on Tuesday. Under that agreement, the two organizations would become the Good Samaritan Society of Sanford Health on Jan. 1, 2019, pending a regulatory review process.

Good Samaritan’s 200-property portfolio concentrates on senior care, including skilled nursing, long-term care, independent living and assisted living. Sanford has 44 hospitals and manages 48 senior living and care communities. Both organizations are based in Sioux Falls, S.D. Good Samaritan has 19,000 employees in 24 states, while Sanford has 28,000 employees in nine states.

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The merger may mean the nonprofit closes some senior living communities in an effort to consolidate the combined organization’s operations, according to Grant Tribble, executive vice president and CFO for Good Samaritan.

“We might take two or three facilities that might be 20 miles apart and struggling from labor [issues]…and bring those together and still serve the same number of people, in fact broaden that, but do it more efficiently,” Tribble told Senior Housing News. “There could be several different scenarios where, quite frankly, a facility is closed, or combined, or made multipurpose.”

Still, the overall goal is for both organizations to expand and grow their footprint in the U.S. and globally—a message both Kelby Krabbenhoft, president and CEO of Sanford, and Good Samaritan President and CEO David Horazdovsky echoed during a press briefing on Tuesday.

“We’re in a growth mode,” Horazdovsky said during the briefing. “And [this is] an opportunity to expand our purpose, not only in our sites here locally as well as around the country, but to explore perhaps areas that neither one of us are located.”

The affiliation is a sign that health systems and managed care organizations are increasingly seeing the value in linking up with or owning senior living and skilled nursing providers—as is the case with Summit Vista, a forthcoming life plan community in Utah that will serve as a “laboratory” for a relationship with a Utah-based health system that has 22 hospitals, more than 180 clinics and its own health insurance plan.

Another sign of things to come is recent $1.95 billion acquisition agreeement between Welltower Inc. (NYSE: WELL), Quality Care Properties (NYSE: QCP), HCR ManorCare and ProMedica. That complex deal essentially brings the vast network of HCR ManorCare skilled nursing facilities, senior living communities, and home health and hospice locations under the umbrella of ProMedica, marking the first time that a health system and insurer has direct operational control over such a vast senior care and post-acute platform.

Written by Tim Regan, with additional reporting by Maggie Flynn

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