Allina Health to be acquired by California-based Sutter Health

Allina Health, one of the largest health care providers in Minnesota, is being acquired by California-based Sutter Health, the health systems announced on Tuesday.

While Allina would keep its name, board of directors and regional headquarters in Minneapolis, the nonprofit would fall under the purview of Sutter President and CEO Warner Thomas.

In their announcement, Sutter’s leadership pledged to invest $2 billion in Allina to focus on improving outpatient care access, adopting AI tools and other technology to streamline processes and hiring more health care professionals.

“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 Lisa Shannon, Allina’s president and CEO. “As one nationally leading, locally committed nonprofit health system, we will be uniquely positioned to be at the forefront of innovation, building upon the expertise of our physicians, advanced practice providers, nurses and team members to chart a new path for healthcare.”

The two organizations have signed a letter of intent, and they are expected to close on the deal by the end of 2026, barring any obstacles as Sutter conducts its due diligence.

Union concerns

The deal comes as 600 Allina doctors, physician assistants and nurse practitioners represented by Doctors Council-SEIU continue to negotiate their first contract since forming a union in October 2023.

In a statement, Doctors Council-SEIU said said this proposed acquisition raises uncertainty for Allina employees.

“Like everyone else, our Unions just learned this news. In Minnesota, we are proud of our world-class healthcare systems but know that increased consolidation and out-of-touch, overpaid executives have too often moved us backward in recent years,” the union said. “We obviously have concerns about what this means for employees, our contracts and our pension plans.”

The union also called on Minnesota Attorney General Keith Ellison to oversee the transaction, as his office did when South Dakota-based Sanford Health attempted to take over Fairview Health Services.

Doctors Council-SEIU members have authorized multiple strikes over ongoing frustrations at the bargaining table, including a vote earlier this month to authorize an open-ended unfair labor practices strike. As of Tuesday, the union had not filed a 10-day strike notice.

Last year, Allina closed four clinics around the metro and shuttered its birth center in Faribault, consolidating its obstetric care services in southern Minnesota to the Owatonna Hospital.