Sanford Health acquires South Dakota hospital

Sanford Health, one of the larger nonprofit health systems in America, continues to add to its footprint.

The health system has completed the acquisition of Prairie Lakes Healthcare System, a hospital based in Watertown, South Dakota. Prairie Lakes operates a hospital with 81 beds and clinics and outpatient facilities in South Dakota and western Minnesota.

Sanford says all regulatory steps have been completed and the deal was finalized last week. Over time, Prairie Lake Healthcare System will transition to the Sanford brand. Sanford says patients will continue to see their providers and the system is working to ensure there are no disruptions.

Based in Sioux Falls, South Dakota, Sanford touts itself as the largest rural health care system in the United States.

Sanford significantly expanded with the acquisition of Marshfield Clinic Health System at the beginning of the year. Now, with the addition of Prairie Lakes, Sanford operates 57 hospitals and nearly 200 clinics across the Midwest. Sanford boasts $11 billion in revenue.

Financial terms of the transaction were not disclosed. Sanford said the system will be making investments into added services in the Watertown region.

Andy Munce, president and CEO of Sanford Health’s Sioux Falls region, said the deal will help guarantee high quality health care in the area.

“As mission-driven nonprofit health care systems, Sanford Health and Prairie Lakes Healthcare System are dedicated to caring for the communities we serve,” Munce said in a statement. “Our partnership will ensure patients and community members continue to have access to world-class services and providers for generations.”

Sanford has had a strong relationship with Prairie Lakes, making the partnership a natural fit, officials said.

Prairie Lakes had been an independent health provider, serving 90,000 residents in a 10-county area. John Allen, Prairie Lakes Healthcare System president and CEO, will remain the leader of the organization.

Chris Carter, chairman of the Prairie Lakes Healthcare System Board of Directors, said the organization will be able to offer more to patients as a part of Sanford Health.

“We gain resources and capabilities to do even more to support the communities we serve going forward,” Carter said in a news release. “Our system is now part of the nation’s leading nonprofit health system that is driving innovation and excellence in rural health care. This partnership ensures that we will continue delivering exceptional, close-to-home care for years to come.”

The Prairie Lakes Healthcare System employs about 800 people, including 80 providers.

Bill Gassen, the president and CEO of Sanford Health, said in a March 2025 interview with Chief Healthcare Executive® that the merger with Marshfield Clinic is going well. “The vision that we had together between Sanford Health and Marshfield Clinic Health System is really starting to come to fruition already,” he said.

Gassen also said earlier this year that Sanford would be open to acquiring other hospitals, if the partnerships made sense.

“I'm certain that Sanford Health will continue to grow with other strategic, like-minded partners,” Gassen said.

Beyond hospitals, Sanford Health has also moved to acquire Lewis Drug, a family-owned chain of 60 pharmacies in South Dakota, Iowa, and Minnesota. Sanford said it hopes to complete that transaction in the fall.

Many rural hospitals across America have been struggling financially, and more independent rural providers are looking to partner or merge with larger systems. Last week, York Hospital in Maine, an independent facility, announced plans to merge with MaineHealth, saying the organization can no longer continue to remain on its own.

• Read more: After a slow start in 2025, hospital merger activity is rising