MARSHFIELD MEDICAL CENTER-DICKINSON campus in Iron Mountain. (Betsy Bloom/Daily News photo)

Marshfield Clinic Health System announced plans Wednesday to partner with South Dakota-based Sanford Health, which is the largest rural health system in the country.

The nonbinding memorandum of understanding aims to create a combined system that will bring together nearly 56,000 employees, 56 hospitals and 4,300 providers, the nonprofit health systems said in a news release Wednesday.

Sanford had $7.2 billion in operating revenue in 2023, while Marshfield’s was $3.1 billion. A combined organization would rank just outside the nation’s top 20 largest health systems, according to SiouxFalls.Business.

The merger is expected to close by the end of the year. There are no immediate changes for employees or the patients each system serves as Sanford and Marshfield remain two separate, independent organizations until the closing, the news release stated. Upon finalization, the name of the parent company will be Sanford Health, with system headquarters in Sioux Falls.

Marshfield Clinic Health System will be a region within Sanford Health and maintain regional leadership with its flagship medical campus in Marshfield, Wis., a regional board of directors, a regional physician executive council and regional brand presence.

Bill Gassen, Sanford Health president and CEO, will be president and CEO of the combined system. Dr. Brian Hoerneman, Marshfield’s interim CEO, will serve as president and CEO of the Marshfield Clinic Health System region.

Marshfield serves Wisconsin and the Upper Peninsula with more than 1,400 providers and 11 hospitals, including Marshfield Medical Center-

Dickinson in Iron Mountain, which it acquired in early 2022.

“Partnering with Sanford Health presents an incredible opportunity for our organizations to unify and establish the premier rural health system in the nation,” Hoerneman said. “Together we will ensure sustainable access to exceptional care for our communities for years to come. With a shared mission to serve, a mutual emphasis on research and education and a strong tradition of physician leadership, Sanford Health is the ideal partner for this endeavor.”

In January, after two years of talks, Marshfield and Duluth, Minn.-based Essentia Health called off plans to merge into a 25-hospital Midwest system. It marked the second time in four years that Marshfield was involved in a merger discussion that dissolved. In December 2019, Gundersen Health System and Marshfield decided to remain separate after several months of talks.

Gundersen, based in La Crosse, Wis., this year completed a merger with Green Bay, Wis.-based Bellin Health. Gundersen and Bellin’s 11 hospitals and more than 100 clinics — including a clinic in Iron Mountain — will, over time, change their name to Emplify Health.

Sanford Health, meanwhile, has been unable in two attempts to merge with Minnesota-based Fairview Health Services. Sanford also discontinued mergers with Utah-based Intermountain Healthcare in 2021 and Iowa-based UnityPoint Health in 2019, SiouxFalls.Business reported.

Sanford Health nonetheless over the past decade has invested more than $1.5 billion in communities across South Dakota, North Dakota, Minnesota and Iowa, including expanded access to speciality care.

“We are excited to combine our common purpose to lead the way for the future, drive innovation and solve the most pressing challenges facing rural health care,” said Gassen, Sanford’s president and CEO. “We are who we are today because of combinations with care delivery organizations in rural communities across America’s heartland. These opportunities have allowed us to follow through on our promise to deliver world-class health care to every patient we serve no matter their zip code, and we are eager to continue building on this track record with Marshfield Clinic Health System.”

Sanford and Marshfield say their nonprofit combination will:

— Improve patient outcomes through broader population health initiatives, value-based care programs and new innovative care delivery models;

— Harness the full promise of technology, including virtual care, digital health, data analytics, AI and genomic medicine to advance the health of communities;

— Expand the breadth and depth of research capabilities, including increasing access to nearly 1,000 active clinical trials and clinical studies and combining research expertise to bring new treatments and cures to patients;

— Expand capabilities that allow for greater investment in clinical needs, directly supporting patients, providers and communities;

— Strengthen the ability to train, educate and support future physicians and caregivers through shared initiatives, including graduate medical education programs and strong partnerships with educational institutions throughout both regions; and

— Create new opportunities for research and collaboration, robust peer networks and enhanced professional development and training.

“The partnership marks a new chapter in our organization, and we look forward to serving our patients as the nationwide leader in rural health care,” said Dr. George Brown, Marshfield Clinic Health System Board chair.

Marshfield had positive operating income of $12.6 million in the first quarter of 2024, versus a loss of $42.1 million in the first quarter of 2023, when it had a loss for the year of $250 million, SiouxFalls.Business reported. Sanford, meanwhile, had operating income of $402.2 million in 2023. In addition to its hospitals and clinics, Sanford operates more than 160 Good Samaritan Society senior living centers.

In an interview Wednesday with USA Today Network, Marshfield CEO Hoerneman said discussions with Sanford Health have been entirely different from previous merger efforts that stalled. Both organizations have similar missions and culture and have aligned priorities to focus on serving rural communities, he said.

The proposed merger is subject to regulatory processes and closing conditions.