California’s Sutter to acquire Allina Health

One of the area’s top health providers is about to become even larger.

Allina Health, which operates hospitals in Owatonna and Faribault and based in Minneapolis, has agreed to join the California-based Sutter Health. The acquisition would create a combined $26 billion nonprofit system.

The merger is expected to take place by the end of the year, pending regulatory and antitrust approvals.

In making the announcement last week, Sutter promises to invest $2 billion in care access to Allina’s current footprint throughout Minnesota and western Wisconsin. The health organization plans to improve patient access and affordability, help caregivers spend more time with patients, drive high-quality and safe care and accelerate physician and clinician recruitment, among other things.

Under the proposed transaction, Allina Health would become Sutter’s Upper Midwest Division. Sutter stated Allina’s name will remain the same and its headquarters will stay in Minneapolis. If completed, the combined system would include 88,000 staff members serving more than 5 million people.

The acquisition is part of a broader trend of health systems consolidating to improve financial stability and invest in digital tools.

“Healthcare organizations across the country are facing complex challenges and a rapidly evolving landscape,” said Warner Thomas, president and CEO of Sutter Health. “As trusted nonprofit health systems, we have a responsibility to fundamentally transform care for patients and communities across the country.”

Thomas said significant investments are planned once the merger takes place. Among them is 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,” Thomas said.

Allina CEO Lisa Shannon said Allina is incredibly excited for the opportunity to harness the collective strength of two mission-driven organizations to make a difference in the lives of patients, communities and care teams. “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,” she said.

Owatonna Chamber President Brad Meier reacted favorably to last week’s announcement. “Allina Health has been very committed to serving Owatonna, and we expect the same under new ownership,” Meier said. “We are hopeful that local leadership will be given authority to make decisions that make sense for the area and serve this region well.”

Meier pointed out that Sutter is a much larger health care organization, which often means there are more resources available to them. “The fact that they are planning significant financial investment into the regional system, should be very good for all the areas served by Allina Health including Owatonna and Faribault,” he said.

He went on to say that competition in all industries provides a higher level of customer service and drive to do well for customers. “So, we continue to expect that having multiple healthcare organizations in Steele County will provide positive impact to all of us who live here,” Meier added.