Essentia Health, Marshfield Clinic in Merger Talks

The merger would create a 25-hospital integrated health system serving Wisconsin, Minnesota, Michigan and North Dakota.

Essentia Health and Marshfield Clinic Health System are in merger talks to create a four-state integrated health system in the upper Midwest, the two systems announced Wednesday.

The merger would create a 25-hospital system serving Wisconsin, Minnesota, Michigan and North Dakota, with more than 150 care venues, 3,500 providers, and a patient base of more than two million people.  

The two mid-sized systems have signed a memorandum of understanding and note that they "have complementary geographies and capabilities, which provides an opportunity to collectively enhance the level of care" in the four-state region.

No firm date was given for completion of the talks. The systems call the memorandum "the first step toward a potential merger. More information will be shared as discussions progress."

It's not clear what, if any, state or federal regulatory hurdles the merger would have to clear.

However, despite the claims made by the hospital lobby that mergers improve efficiencies and care coordination, there is a growing body of academic studies – and increased sentiment among payers, patient advocates and government watchdogs -- that larger systems don't necessarily deliver better care, and that mergers allow larger systems to leverage more money from insurers, who pass that increased cost on to consumers. 

David Herman, MD, CEO of Duluth-based Essentia, says he's been a longtime fan of his potential partner and has "admired the work of Marshfield Clinic for more than 30 years."

"I have always appreciated their ability to advance the well-being of the communities they serve. I am truly excited to work together for the benefit of our patients and our colleagues," Herman says.

He says the two health systems share common values and embrace a mission-driven approach to healthcare that extends beyond our facilities. "Through a new partnership, we can support the care models, services, research and technologies to ensure sustainable and thriving rural health care," he says.

Susan Turney, MD, CEO of Marshfield, WI-based Marshfield Clinic, called the potential merger "an exciting opportunity for both our organizations and those we serve."

"These are two of the premier health systems in the country, looking to come together to serve rural communities and beyond," Turney says. "When I look at Essentia, I see an organization with world-class expertise that complements our own. And I see their long, rich history of serving communities with a mission very similar to ours at Marshfield Clinic Health System."