Allina Health acquisition by California’s Sutter raises union concerns over contracts, pensions

Healthcare unions representing thousands of Allina Health workers say they have concerns about contracts and pension plans after California-based Sutter Health announced plans to acquire the Minnesota health system.

Sutter announced plans this week to acquire Minnesota-based Allina in a deal that would create a healthcare system spanning three states and serving 5 million patients.

Sutter Health, a nonprofit based in Sacramento, said it intends to invest more than $2 billion in Minnesota and Wisconsin if the deal is approved by regulators. Allina Health, based in Minneapolis, would retain its president, board of directors and brand, according to the announcement.

The combined system would operate 39 hospitals and 400 care sites across California, Minnesota and Wisconsin, with 18,000 physicians and 88,000 employees. Sutter operates 27 hospitals in California, while Allina operates 12.

The two healthcare systems have a combined revenue of more than $25 billion.

Sutter said it plans to establish ambulatory and specialty care sites in Minnesota and recruit more physicians. The organization also said it intends to use artificial intelligence to “reduce administrative burdens.”

“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, president and chief executive officer of Allina Health.

Allina said patients will still have access to the same doctors, appointments and care.

Healthcare unions representing thousands of Allina workers expressed concerns about the deal.

SEIU Healthcare and the Doctors Council said they 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 to a small handful of executives for personal enrichment,” SEIU said in a statement. “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.”

Dr. Matt Hoffman of the Doctors Council SEIU said healthcare workers were not consulted about the decision.

“I think a lot of it is the fear of the unknown, is what will this look like? Certainly, the people on the ground that are delivering care to patients weren’t consulted in this decision. Healthcare workers’ concerns weren’t taken into account,” Hoffman said.

The Minnesota Nurses Association also raised concerns.

“The proposed acquisition raises serious concerns about how this could impact union members’ contracts and benefits as well as patient care,” the Minnesota Nurses Association said in a statement. “We call on hospital leadership to work in good faith with the Minnesota Attorney General’s office and to comply with 2023 legislation regulating healthcare mergers and acquisitions. This will ensure full transparency throughout this process and accountability to workers and the public.”

Sutter and Allina said they plan to close the deal by the end of the year, pending regulatory approval.