Duluth-based Essentia Health says it has an agreement to merge with Marshfield Clinic, a nonprofit hospital and clinic operator based in central Wisconsin.
Duluth-based Essentia Health to merge with Marshfield Clinic of Wisconsin
The new health system will span four states through a deal scheduled to close by year's end pending regulatory approval.
July 27, 2023 at 7:12PM
The health systems announced the deal Thursday without specifying a headquarters location, although Dr. David Herman, the current chief executive at Essentia, will serve as CEO of a new parent company.
"We are both physician-led organizations with an unwavering commitment to the health of rural communities," Herman said in a statement about the Essentia-Marshfield combination.
It's the second merger announcement this summer for a medical center in Duluth. Nearby St. Luke's said this month it plans to merge with Aspirus Health, a Wisconsin-based health system that plans to maintain headquarters in Wausau.
The Essentia-Marshfield news came the same day Minneapolis-based Fairview Health Services and South Dakota-based Sanford Health revealed they were withdrawing their mega-merger proposal after failing to get buy-in from key Minnesota stakeholders.
That deal was delayed many months as questions remain unresolved about how the health systems would work with the University of Minnesota, which in 1997 sold its teaching hospital to Fairview.
As with the proposed Sanford-Fairview deal, Minnesota Attorney General Keith Ellison will review the Essentia-Marshfield combination "using our existing authority under Minnesota's nonprofit and charities laws and state and federal antitrust laws," spokesman John Stiles said in an email.
Ellison's office also will use "our new authority in state law to review whether the merger is in the public interest," Stiles said.
The Essentia-Marshfield merger, which would create a four-state health system, should conclude by year's end pending regulatory approval, the health systems said Thursday in a news release. It did not mention financial terms.
The health systems disclosed they were discussing a combination in October 2022.
Essentia Health is Duluth's largest employer with about 15,000 workers. The health system includes 78 clinics and 14 hospitals across Minnesota, North Dakota and Wisconsin.
Marshfield Clinic employs more than 12,000 employees. It operates 11 hospitals as well as 60 clinic locations across Wisconsin and the Upper Peninsula of Michigan.
Dr. Susan Turney, the CEO at Marshfield Clinic, previously announced plans to step down this fall.
"While work remains to finalize our new relationship, this is another positive step in our journey to define the future of health care, and to fundamentally transform rural health care in America," Turney said in a statement.
This weekend, Essentia opens a massive $915 million replacement hospital for its flagship St. Mary's Medical Center in Duluth.
Pioneering surgeon has run afoul of Fairview Health Services, though, which suspended his hospital privileges amid an investigation of his patient care.
