Sanford Health CEO out after two decades following mask controversy

Dive Brief:

  • Sanford Health’s CEO Kelby Krabbenhoft is leaving the top exec role after almost 25 years, according to a Tuesday announcement from the Sioux Falls, South Dakota-based system, following controversial statements the outgoing CEO made about mask wearing during the coronavirus pandemic.
  • Sanford and Krabbenhoft maintain the decision is mutual. But it follows an email Krabbenhoft sent to Sanford staff late last week saying he had COVID-19 and wouldn’t be wearing a mask, purporting he had recovered from the virus and has immunity — sparking controversy throughout the system and local communities, according to reports from numerous outlets.
  • Effective immediately, Bill Gassen, who most recently served as chief administrative officer and has been with the company since 2012, will serve as president and CEO.

Dive Insight:

Krabbenhoft, who has served as CEO since 1996, sent an internal memo to Sanford’s 50,000 employees on Wednesday arguing wearing a mask would defeat its purpose, as he’d already contracted COVID-19 and was therefore immune for at least seven months, as first reported by Forum News Service.

Experts dispute, however, that people previously infected with the novel coronavirus are entirely immune, as the data is not yet definitive. Other Sanford executives sent an email to employees Friday recommending mask wearing and contradicting Krabbenhoft’s claims.

On the heels of the news, Sanford’s board of trustees and Krabbenhoft have now “mutually agreed to part ways,” according to the release. The turnover comes at an acutely crucial time for the major Midwest health system, as it signed a letter of intent last month to merge with Salt Lake City-based Intermountain Healthcare.

If the deal closes, the two would operate 70 hospitals and 435 clinics — many of which will be located in rural communities across the country — and insure 1.1 million people. The merger would form one of the nation’s largest nonprofit health systems with more than $13 billion in combined annual revenue. It’s expected to close in 2021, pending regulatory approvals.

While Intermountain CEO Marc Harrison is slated to lead the combined organization, Krabbenhoft was poised to serve as president emeritus. It’s unclear what the plans are now after Krabbenhoft’s exit.

Sanford, which operates 46 hospitals in 26 states, did not reply to requests for comment by time of publication.

Sanford’s executive leadership team will remain the same, consisting of Executive Vice President Micah Aberson, Chief Medical Officer Allison Suttle, Chief Operating Officer Matt Hocks, Chief of Staff Nathan Peterson and Chief Finance Officer Bill Marlette, according to the release.

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