Allina Health will join with California-based Sutter Health and become its Upper Midwest division, while maintaining its own brand, officials announced Tuesday.
Allina United Hospital in St. Paul. On March 17, 2026 Minnesota’s Allina Health announced it is seeking to join with California-based Sutter Health. (Courtesy of Allina Health)
The combined nonprofit health system is not considered a merger as Allina Health will retain its brand and Minneapolis headquarters and remain focused on Minnesota and western Wisconsin, Allina officials said in their announcement. Allina owns and operates United Hospital in St. Paul.
Sutter Health President and CEO Warner L. Thomas. (Courtesy of Allina Health)
Warner L. Thomas will lead the combined system as president and CEO of Sutter Health, and Lisa Shannon, Allina’s current president and CEO, will lead the Upper Midwest division.
Sutter Health has committed to investing $2 billion in Minnesota and western Wisconsin. The combined system will have 18,000 physicians and more than 400 primary and specialty care sites.
Under a letter of intent the two signed, Sutter’s 27 hospitals in California will be combined with Allina’s 13 hospitals in Minnesota and Wisconsin.
The deal comes amid continuing financial challenges in U.S. health care that have driven hospital and clinic systems to consolidate in search of economies of scale.
Statements from Sutter, Allina officials
“When Allina Health joins Sutter Health, we look forward to making significant investments that improve care access and patient experience in Minnesota and western Wisconsin communities,” Thomas said. “This includes establishing new ambulatory and specialty care sites to fill care gaps and meet growing community needs, as well as recruiting more physicians and enhancing AI and digital health capabilities. Building on our complementary strengths and combined expertise, we will build a healthcare innovation engine that accelerates how ideas move from development and design into improving the health of patients and communities.”
In a statement Tuesday, Allina officials noted Sutter’s location in the nation’s technological hub.
“With Northern California at the forefront of AI and platform development and Minnesota’s position as the leading hub for med-tech and engineering, the proposed combined system will be uniquely positioned to be a national leader in digital and technological advancements that meaningfully improve patients’ and caregivers’ experiences, while continuing to provide the compassionate care their respective communities have relied on for decades,” Allina officials said in a Tuesday statement.
Plans for the combined systems include using artificial intelligence and digital resources to help reduce administrative burdens, accelerating physician and clinician recruitment, improving patient scheduling and expanding specialty institutes.
State attorney general’s role
Meanwhile, the deal still needs to be reviewed by the Minnesota Attorney General’s Office.
“The Minnesota Attorney General’s Office will review the proposed merger between Sutter Health and Allina Health to evaluate the transaction’s compliance with Minnesota law,” according to a statement from Brian Evans, a spokesperson for Attorney General Keith Ellison.
Ellison, who has authority to review such health care proposals, would review whether it is in the public’s interest — including if health care access is reduced, according to Evans. If there is a determination it isn’t in the public’s interest Ellison could file a lawsuit to block it.
In 2023, Ellison asked the principals in the proposed merger of Minneapolis-based Fairview Health Services and South Dakota-based Sanford Health to slow their efforts. Ultimately, that deal ended after it failed to gather support from state leaders. In January, Fairview agreed to continue its association with the University of Minnesota and its medical school and facilities.
Reaction from union
SEIU Healthcare Minnesota & Iowa and Doctors Council SEIU, which represent Allina health care workers, released a statement Tuesday expressing concern about the announcement.
“Like everyone else, our Unions just learned this news,” according to the statement. “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,” union officials said in the statement Tuesday. “We obviously have concerns about what this means for employees, our contracts and our pension plans. A key issue is ensuring that charitable assets built up by Minnesotans are not diverted out of state or to a small handful of executives for personal enrichment. 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.”
Sutter Health and Allina Health will finalize terms for the proposed transaction before entering into a final agreement. Closure on the noncash agreement is expected by the end of 2026 provided it gets regulatory approval.
Sutter Health, which is based in Sacramento and is northern California’s largest hospital system, has faced lawsuits based on allegations of antitrust practices leading to increased costs and Medicare violations.
In 2021, it agreed to pay a total of $90 million to settle allegations of Medicare fraud, the Associated Press reported at the time. Officials said the hospital system received inflated payments because it said people in its Medicare Advantage plans were sicker than they actually were.