Sanford Health and Marshfield Clinic Health System have entered a non-binding memorandum of understanding to merge their operations and other capabilities and complementary assets.

The proposed merger will create an integrated health system focused on improving care in the US' rural Midwest region.

This would operate as a physician-led organisation with a strong emphasis on research, particularly for underrepresented populations.

The companies said the merger would ensure a healthy operating performance and prioritise the needs of patients, people and communities.

Expected to be finalised by the end of this year, the deal is currently pending regulatory approval and fulfilment of closing conditions.

Once it has closed, the combined system will operate under the Sanford Health name and be based in South Dakota.

Marshfield Clinic Health System will become a region within Sanford Health, keeping its current regional leadership and brand presence.

The combined system will bring together 56 hospitals, nearly 56,000 employees and 4,300 healthcare providers, including two fully integrated health plans and nationally recognised research institutions.

Sanford Health president and CEO Bill Gassen will lead the merged entity, while Marshfield Clinic Health System interim CEO Brian Hoerneman will serve as president and CEO of the Marshfield Clinic Health System region.

Gassen said: “We are who we are today because of combinations with care delivery organisations in rural communities across America’s heartland.

"These opportunities have allowed us to follow through on our promise to deliver world-class health care to every patient we serve no matter their ZIP code, and we are eager to continue building on this track record with Marshfield Clinic Health System.”

Over the past ten years, Sanford Health has invested more than $1.5bn in various communities with the aim of enhancing access to speciality care and modern facilities.

The merger is intended to continue this trajectory by enabling further investment to meet current and future healthcare demands.