Northern California-based Sutter Health is acquiring Minnesota-based Allina Health, the two systems announced this week.
The deal would create a nonprofit health system spanning three states — California, Minnesota and Wisconsin — with 39 hospital campuses, 400 primary and specialty care sites, and tens of thousands of employees.
Based on both systems’ revenues from last year, the combined entity would generate about $26 billion. Most of this cash flow would come from Sutter — the health system brought in $19.8 billion in revenue last year.
Under the deal, Allina would become Sutter’s Upper Midwest division and retain its brand and regional headquarters in Minneapolis.
The move seeks to expand Sutter’s footprint beyond California and build a larger multistate health system. Leaders from Allina Health said joining a larger organization will allow the system to become more innovative, as well as bolster its financial footing. They also noted that maintaining Allina’s local leadership structure was a key part of the agreement.
Overall, the two organizations said they are pursuing this deal because combining their resources will allow them to boost access to care and make services more affordable for patients. They also think the merger will give them the scale needed to invest in more technologies, clinical programs and care delivery models.
Sutter plans to make “significant investments” focused on improving care access and the patient experience in Minnesota and western Wisconsin communities once Allina joins its system, Sutter CEO Warner Thomas said in a statement.
“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,” he stated.
Sutter and Allina anticipate the merger closing by the end of the year, pending regulatory approval.
The deal comes as health systems across the U.S. pursue mergers as a way to gain scale and advantage amid tight margins, rising costs and the growing need for technology investments.
For instance, last year, Sanford Health combined with Marshfield Clinic Health System to create a 56-hospital system across the Midwest, and Northwell Health merged with Nuvance Health in a deal spawning a $22.6 billion system with 28 hospitals and more than 100,000 employees.
Photo: mathisworks, Getty Images
