Photo: Courtesy Allina Health
Allina Health is joining Sutter Health to create a combined 39-hospital nonprofit health system in California, Minnesota and Wisconsin.
The health systems have signed a Letter of Intent and anticipate closing by the end of 2026, pending regulatory approval.
Upon closing, the organization will have a combined footprint across Northern and Central California, Minnesota and Wisconsin, with 18,000 physicians serving more than 5 million patients. The system will include more than 400 primary and specialty care sites, with 12 nationally ranked specialties.
Allina Health's 12 hospital campuses in Minnesota and western Wisconsin will join Sutter Health's 27 hospitals in California. Allina Health would become the Upper Midwest Division of Sutter Health, maintaining the Allina Health name, brand and regional headquarters in Minneapolis, the health systems said.
Sutter Health would maintain its headquarters in Northern California, led by President and CEO Warner Thomas. Lisa Shannon would remain president and CEO of Allina Health.
The merger combines AI capabilities with med-tech and engineering, the health systems said, as Northern California is at the forefront of AI and platform development and Minnesota is the leading hub for the latter capabilities.
The merger includes an investment of more than $2 billion in Minnesota and western Wisconsin to establish new ambulatory care locations and expand specialty institutes to fill care gaps. It would take advantage of AI and digital solutions to reduce administrative burden and create more convenient scheduling as well as accelerate physician and clinician recruitment and advance research through clinical trials.
California patients would benefit through growth in Minnesota and western Wisconsin, particularly in clinical centers of excellence, access to next-generation med-tech, and clinical partnerships and advancements.
Over the coming weeks and months, Sutter Health and Allina Health will complete due diligence and finalize the terms and conditions of the proposed transaction prior to entering into a definitive agreement.
"Healthcare organizations across the country are facing complex challenges and a rapidly evolving landscape. As trusted nonprofit health systems, we have a responsibility to fundamentally transform care for patients and communities across the country," said Thomas.
"We are incredibly excited for the opportunity to harness the collective strength of our two mission-driven organizations to make a difference in the lives of our patients, communities and care teams," said Shannon.
Healthcare unions representing thousands of Allina workers have expressed concerns about the deal, according to CBS News. SEIU Healthcare and the Doctors Council said they have "concerns about what this means for employees, our contracts and our pension plans." They also expressed concerns about potential impacts to patient care.
"A key issue is ensuring that charitable assets built up by Minnesotans are not diverted out of state to a small handful of executives for personal enrichment," SEIU said in a statement. "We call on Attorney General Keith Ellison to provide all appropriate inquiry and oversight into this proposed merger and to ensure the interests of Minnesota's workers and patients are protected," according to the report.
Email the writer: SMorse@himss.org