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Sunday, July 19, 2009

Sanford-MeritCare HQ Set for Fargo; Greenway and Miller Draw Nice Checks

The kids at Sanford Health must have gotten the Sioux Falls jingle "Stay close go far" backwards: I read that the merged Sanford Health and MeritCare will put their corporate headquarters in Fargo. I think MeritCare and Sanford are both tax exempt, so corporate income tax won't bug them. But any corporate folks who move from Sioux Falls to Fargo will have the pleasure of contributing to North Dakota via individual income tax (and yet they move...).

While reading up, I did find it interesting to see how Sanford Health spends some of our money. Among the highlights from Sanford's 2007 Form 990:
  • South-Dakota-born sports stars Chad Greenway and Mike Miller each made $60,000 as independent contractors. Drop by sports camps, cut a few ads, make 20% more than the median household in Minnehaha County made all that year. Nice work if you can get it.
  • Legal fees: three quarters of a million. $501K to DavenportEvansHurwitzSmith, $224K to Alston Bird of Atlanta (come on... couldn't spend those dollars locally?)
  • VP Mark Elliot got $331K in pay, $47K in benefits, and $7.5K in expenses for marketing. Marketing: not actually helping anyone who's sick, but just fidning ways to convince us when we get sick that we should come to not just any hospital, but his hospital.
  • Amount spent on advertising: $3.2 million. (Amount Sanford originally resisted paying Joe and Missy Urbaniak for their son Cooper's cancer treatment: $400,000.)
  • CEO Kelby K. Krabbenhoft drew $1,266,680 in salary, $121,950 in benefits, and $11,776 in expense account and etceterals.
Your health dollars at work.


  1. With Sanford throwing millions away on wasteful advertising, it is no wonder the so-called establishment media sits like worms on a toad stool acting deaf and dumb with regard to the monopolistic impact of the merger. The pay to Kelby K. is obscene when they strain themselves to make sure the lowest paid people in their system don't get a single minute of overtime even when it makes the system money.

    Sanford and similar systems jack up the cost of medical care and then since they also run insurance systems jack up the insurance charges. The primary beneficiaries are the executives of the linked systems.

    Thanks for dragging out the salary and other information. Our federal officials should be looking into this. Bigness for the sake of bigger executive salaries is not in the public interest or even the interest of the health systems.

  2. It would be interesting to see what the marketing expense and administration expense is compared to the overall operations of running Sanford.
    But I wonder, if you feel that these high salaries and marketing expenses are a problem, what’s the solution? Government health care? Does HB 3200 stop Sanford from spending money on Greenway and Miller? Does it make Sanford spend legal dollars locally? Stop administration and marketing expenses?
    I realize you’re trying to show the flaws of our current system, and you’ve shown some. You’ve also backed HB 3200. HB 3200 doesn’t solve these problems, it doesn’t even address it. I know you’re an idealist Cory, don’t support a bill that doesn’t get the job done. Keep demanding more of Washington (if you believe they are the solution to the problem).

  3. So what if the currently proposed health care bill doesn't stop health care companies from spending obscene amounts of money on marketing? No health care bill could be passed that would. Let's stop stalling and get a bill passed this year.

  4. Who cares what Sanford spends on marketing and advertising or what its CEO makes in salary and incentives. I'm sure it isn't out of line, percentage-wise, with other comparable hospitals. Expect the salary to go up with the merger. Larger group, larger responsibilities, more pay.

    What I can't understand is why Sanford's advertising agency can't develop more than one or two "Lean On Me" TV ads to rotate during their overwhelming advertising schedule, so the public doesn't feel like tossing something at their television set every 90 seconds. I used to like that song.

  5. Brett, H.R. 3200 doesn't build the moonbase I want or protect Net neutrality, either, but I'm still supporting it. It's not even single-payer, which I really want, but I won't let Republicans co-opt my ideals for their obstructionism. H.R. 3200 will challenge the status quo, give the public more bargaining power, and pressure hospitals to spend more wisely.

    And once it passes, I will keep demanding more of government... and corporate America.

    Rod, you want Sanford to develop more ads?! Uff da! How about this strategy for marketing: take that $3.2 million and subsidize maternity care. Cut the cost of about a thousand deliveries in half. Word of mouth on quality care for less cost would bring Sanford more business than any cheesy image-only ad.


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