Sacramento-based Sutter Health operates 24 hospitals and more than 200 clinics across Northern California, including its flagship Sutter Medical Center in midtown Sacramento.
Sacramento Bee file
Sutter Health announced plans Tuesday to combine with Minneapolis-based Allina Health in a deal that would create a health system with 88,000 employees and 39 hospitals.
The Sacramento-based health system said in a news release that it has signed a letter of intent, and officials expect the deal to close by the end of 2026, pending regulatory approval. The combination would mark Sutter’s largest footprint outside of California to date.
“It allows us to grow outside California, and look to have a broader impact on health care, not just in northern California, but nationally,” said Sutter Health President and CEO Warner Thomas in an interview Tuesday morning. “We need to have leaders in the industry who can influence policy and create solutions for the future. I think this will be one way that we can do that.”
Thomas would serve as president and CEO of the combined system.
Allina Health, which has 12 hospital campuses across Minnesota and western Wisconsin, would become Sutter’s Upper Midwest Division, led by Allina CEO Lisa Shannon. Allina will maintain its brand and regional headquarters in Minneapolis. Allina will have some representation on Sutter’s board, Thomas said.
As part of the agreement, Sutter would invest $2 billion in Allina over the course of five years. Part of that would include the completion of its flagship campus renovation project in Minneapolis, Thomas said, plus building out Allina’s outpatient footprint.
Thomas said Sutter has made major investments in AI technology, which could benefit Allina. About 3,700 Sutter clinicians use an ambient listening tool that records patient appointments and creates summaries for their charts, saving the health care worker the time of writing them out manually. Sutter is also using a tool to assist with interpreting radiology exams.
“We’ve invested about $350 million over the past year, just in clinical technology and innovation,” Thomas said. “We think that’s something we can bring to Allina Health.”
Sutter has expanded aggressively in recent years. The health system has added to its midtown Sacramento campus and boosted recruitment. It announced plans for a 56,000-square-foot specialty center in Elk Grove and a 120,000-square-foot downtown sports medicine center, slated to open in late 2027.
Sutter’s annual revenues were $19.8 billion in 2025, and Allina’s annual revenues are roughly $6 billion, Thomas said.
“There are a lot of health systems around the country looking to create partnerships, given the challenges in health care today,” Thomas said. “I do think it’s going to continue.”
Thomas emphasized that the deal doesn’t represent any changes for Sutter’s presence in Northern California.
“We’re going to continue to be Sutter Health, we’re going to continue to be headquartered in Sacramento,” he said. “We’re going to continue to invest in northern California and expand services here.”
This story was originally published March 17, 2026 at 10:00 AM.
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Annika Merrilees
The Sacramento Bee
Annika Merrilees is a business reporter for The Sacramento Bee. She previously spent five years covering business and health care for the St. Louis Post-Dispatch.
