UnityPoint Health, one of Iowa's main hospital and clinic systems, announced Friday that it's discussing a merger with Sanford Health, a larger system based in South Dakota.

UnityPoint Health, based in Des Moines, includes 32 hospitals and 280 clinics in Iowa, Wisconsin and Illinois. Its flagship hospital, Iowa Methodist Medical Center, is in Des Moines.

Sanford Health, based in Sioux Falls, includes 44 hospitals, 482 clinics and more than 200 senior care centers in nine countries and 26 states.

The companies have signed a "letter of intent" to merge, but said details need to be worked out.

"Here’s what won’t change: your physician, care team, hospital, insurance coverage —

or the promise we’ve made to you at UnityPoint Health," UnityPoint President Kevin Vermeer said in an open letter to patients and community leaders.

"The opportunity to partner with Sanford represents an opportunity to get bigger,

but not for the sake of growth alone," Vermeer wrote. "If we get bigger in terms of geography, it’s so we can do better, on your behalf. We are not being sold or acquired —we’re intentionally shaping a new path forward, so we can continue to be your partner in health."

Leaders of UnityPoint and Sanford said in a news release that although the merger talks are tentative and would need to be approved by federal regulators, they hope to have the transaction completed by the end of the year.

UnityPoint is one of Iowa's two dominant hospital and clinic systems. The MercyOne system is the other.

The Sanford-UnityPoint merger proposal comes amid decades of consolidation within the health-care industry nationwide. Many formerly independent hospitals and physician clinics have joined systems to save money and gain access to high-tech treatments and information technology. In turn, many existing hospital systems have joined together to form multibillion-dollar health-care companies.

National experts say hospital mergers can have mixed effects on patients. Large health systems can save money by consolidating administrative tasks and negotiating for lower prices on equipment and medical supplies. However, large health systems also can use their bargaining power to raise prices, including reimbursements paid by health insurers.

David P. Lind, who owns a health-care research firm based in Clive, said he hopes federal regulators scrutinize the proposed merger closely.

"I would like to be jumping up and down with excitement that we're going to see lower prices and greater quality," because of the merger, Lind said Friday. However, he said, research in other states has shown that's often not the case.

Lind said employers who cover their workers' health care are particularly at risk of facing higher costs when hospitals gain bargaining power. "Employers are going to be scratching their heads, wondering, 'What does this mean to us?'" he said.

UnityPoint and Sanford have not chosen a name for the proposed merged hospital system.

UnityPoint spokesman AJ Ellingson said the two systems have "minimal overlap" in the northwest Iowa areas their hospitals and clinics serve. When asked about how the merger would affect the systems' workforce, Ellingson said the companies would have to work out the details.

"Sanford and UnityPoint Health share a commitment to ensuring we have the right team members, physicians and leaders to deliver a world-class personalized experience," Ellingson wrote in an email to the Register. "That said, no organization can ever commit to no reductions or layoffs. Our goal is to preserve our talented team members while meeting the sustainability needs of a high-performing organization."

Vermeer became UnityPoint's president and chief executive officer in 2016, after working 16 years as an executive for the system and several of its hospitals. He would become senior executive vice president of the new, combined company, according to the news release. Sanford leader Kelby Krabbenhoft would become president and chief executive officer of the new company.

UnityPoint traces its roots to 1993, when Iowa Methodist Medical Center joined Iowa Lutheran Hospital in Des Moines to form Iowa Health System. The system changed its name to UnityPoint in 2013 and continued to sign up hospitals and clinics throughout Iowa and in western Illinois and Wisconsin.

“Sanford and UnityPoint are two successful systems intent on controlling our own destiny,” Krabbenhoft said in the release. “We believe that, in the very near future, fully integrated health systems will drive greater value through affordable options for high-quality health care to patients, governments and employers. The combination of Sanford and UnityPoint will help both organizations better meet this need.”

Both hospital systems are classified as nonprofit organizations, meaning they are overseen by community boards and are exempt from many taxes. Their merger would create one of the 15 biggest nonprofit health care systems in the country, with more than $11 billion in annual operating revenue, the release said. It would employ more than 83,000 staff members and 2,600 physicians.

Tony Leys covers health care for the Register. He can be reached by email at tleys@registermedia.com or by phone at 515-284-8449.