A Record of putting Profits Before Patients

Allina executives claim to “[do] what’s right for our patients and our future.”[1] Yet, again and again, Allina executives have embraced profit-focused corporate healthcare policies, shortchanged patients and employees, and left vulnerable communities behind.

Consequences of Healthcare Consolidation
December 1993
  • Two of Minnesota’s largest healthcare companies, Medica and HealthSpan, announce a merger to form Allina Health System. Given their combined size, this move raises questions about competition in the Twin Cities market as well as the impact on prices and consumer choice.[2]

Prioritizing Profits Over Patients
  • In 2000 a federal review finds that Medica, a health plan and subsidiary of Allina Health, misspent Medicare money. Allina eventually reaches an agreement with U.S. Attorney General to repay $16M for Medicare overbilling practices.[3]
  • An investigation of Allina by Minnesota Attorney General Mike Hatch uncovers millions spent on executive perks and corporate consultants.[4] Allina is later confirmed to have spent nearly $300,000 to fight Hatch’s revelations in the media.[5]
  • Allina splits its health insurance plan arm, Medica, and Allina into two independent companies under pressure from Attorney General Hatch. Allina denies the breakup was done at the behest of Hatch.[6]
  • Medica and Allina sign agreements with the U.S. Attorney General to put in place new management policies to control finances and prevent extravagant spending.[7]

Prioritizing Profits Over Patients
May 2001
  • Facing a potential strike, Allina notifies 1,000 employees of layoffs and hires 4,000 replacement nurses.[8] The strike is ultimately averted.[9]

Prioritizing Profits Over Patients
November 2001
  • Allina settles a nurses’ whistleblowing lawsuit, alleging $1B in fraud committed by Allina hospitals and anesthesiologists in billing federal health insurance plans for work done by qualified nurses.[10]

Aggressive Debt Collection and Legally Questionable Practices
June 2004
  • Allina is named in a class-action lawsuit alongside Fairview alleging that they overcharged uninsured patients and aggressively pursued collections. Allina is also accused of providing inadequate amounts of charity care, a requirement under their nonprofit status.[11] Allina and Fairview later settle the lawsuit and agree to pay discounts to impacted patients.[12]
  • Allina consolidates governance over 15 hospitals into a single 20-member board, dissolving individual hospital boards.[13]

Consequences of Healthcare Consolidation
June 2005
  • To end an antitrust lawsuit filed by the Minnesota Attorney General, Allina agrees not to purchase two cardiology practices. The lawsuit alleged that the proposal would give Allina a monopoly in local cardiac care.[14]
Cutting Healthcare Services and Worker Protections
January 2007
  • Allina reduces its workforce by about 6 percent, including instituting 200 layoffs at Abbott Northwestern Hospital following a $250M investment in information technology that eroded the system’s cash reserves.[15]

Cutting Worker Protections
February 2007
  • Seven nurses and office workers file a lawsuit against Allina, alleging that the system did not stop repeated harassment by a physician and instead retaliated against the women.[16]

Consequences of Healthcare Consolidation
April 2007
  • Minnesota Legislature passes a bill to delay construction of radiation-therapy facilities. The bill is specifically designed to forestall Allina’s plans to open a new facility in Woodbury.[17]

Failing to Prioritize Patient Care
August 2008
  • State health investigators find Abbott Northwestern violated safety procedures when a patient suffered first- and second-degree burns on her face, lips, and shoulder during surgery.[18]

Cutting Healthcare Services and Worker Protections
October 2008
  • Allina announces it is eliminating between 250 and 350 jobs, the second time in under 2 years. The cuts are attributed in part to the rise in bad debt.[19]

Aggressive Debt Collection and Legally Questionable Practices
January 2009
  • Minnesota Attorney General Lori Swanson files a lawsuit against Allina, alleging the system violated state usury laws by charging hundreds of patients interest rates up to 18 percent, when state law caps rates at 8 percent. The lawsuit also alleges that Allina violated consumer fraud laws by failing to fully disclose credit terms, including interest rates, if patients opted to pay bills through MedCredit.[20] Allina settles the lawsuit in April, agreeing to reimburse patients at least $1.1M and capping interest rates at 8 percent moving forward.[21]

Aggressive Debt Collection
March 2009
  • Penny Wheeler, then Chief Clinical Officer, bemoans Allina’s rising bad debt, stating: “It's starting to put us in a position we almost don't want to be in -- the collections business.” Allina begins calling patients prior to surgery and other outpatient procedures with the intention of collecting early.[22]

Prioritizing Profits Over Patients
May 2010
  • United is one of 9 hospitals that collectively agree to pay the federal government more than $9.4M to settle allegations of false claims to Medicare for kyphoplasty procedures. The lawsuit alleged that while the procedure can typically be done in an out-patient setting, United Hospital was performing it in-patient to increase their Medicare billings.[23]
Legally Questionable Practices
March 2012
  • Allina agrees to pay $375,000 to settle a lawsuit with the U.S. Attorney General, alleging that Apple Valley Pharmacy, an Allina facility, failed to adhere to the Comprehensive Drug Abuse Prevention Control Act of 1970.[24]
Prioritizing Profits Over Patients
June 2013
  • A former nurse sues United Hospital, alleging that Allina fired her in retaliation for speaking up about trauma patients dying as a result of substandard care.[25]
Cutting Healthcare Services and Worker Protections
November 2014
  • Allina announces more job cuts in an effort to produce $100M in savings for the system. The hospital system has already reduced its workforce by more than 1,600 employees since May 2013 and recently closed a floor at United Hospital in St. Paul. Chief Financial Officer Duncan Gallagher announces his departure.[26]
  • CEO Kenneth Paulus announces his retirement by the end of 2014. He is to be replaced by Penny Wheeler, then President and Chief Clinical Officer.[27]
Cutting Healthcare Services and Worker Protections
March 2015
  • Hundreds of healthcare workers protest recent staff cuts at Allina hospitals due to conditions they maintain are unsustainable.[28]
Prioritizing Profits Over Patients
October 2015
  • Four Allina hospitals reach agreements with the U.S. Department of Justice to settle allegations that the cardiac devices implanted in Medicare patients were in violation of Medicare coverage requirements. In total, Allina pays $2.56M.[29]
Cutting Healthcare Services and Worker Protections
June - October 2016
  • During negotiations where nurses sought to address issues of safe staffing and patient care, Allina moves to cut four union-backed health insurance plans, provoking a walkout and 37-day strike. The hospital system proposed shifting RNs to corporate health plans with higher deductibles and co-pays in order to curb healthcare spending.[30]

Prioritizing Profits Over Patients
October 2016
  • A report released by National Nurses United reveals that Allina sets charges for patient services at nearly 3 times the actual cost of providing care. Using data from Medicare Cost Reports, researchers found Allina’s average charge-to-cost ratio of 281 percent was well above the statewide average of 205 percent. Mercy, Abbott Northwestern, and United are among the most expensive hospitals in the state based on their charge-to-cost ratio.[31]

Cutting Healthcare Services
September-November 2016
  • Allina forfeits Unity’s license, seeking to make the Fridley hospital an auxiliary campus to Mercy Hospital in Coon Rapids, sparking criticism from impacted patients and community members. Allina had previously closed Unity’s labor and delivery unit and sought to relocate mental health services there.[32]

Prioritizing Profits Over Patients
January 2017
  • Federal auditors seek $8M in alleged overpayments from Abbott Northwestern, including bills to Medicare for patients who didn't meet the program's criteria for acute inpatient rehabilitation services.[33]
  • Allina announces a joint venture with Aetna to create a for-profit insurance company for consumers in the Twin Cities.[34]

Prioritizing Profits Over Patients
April 2018
  • Chief Financial Officer Ric Magnuson tells the Star Tribune that the expense of hiring temporary nurses hurt the company’s profitability. “When you hire and bring in nurses from the external, from the temporary agencies, that's very expensive.”[35] Allina had previously spent $20M on temporary staffing during a 7-day strike in June 2016.[36]

Prioritizing Profits Over Patients
March 2019
  • A report by the Minnesota Nurses Association reveals that Allina and Fairview each have 10 hospitals with the highest charge-to-cost ratios in Minnesota. Using data from Medicare cost reports (MCR) for fiscal year 2016–2017, researchers find that 86 percent of hospitals with the highest ratios in the state belong to the two systems.[37]
Cutting Healthcare Services and Worker Protections
August 2019
  • Healthcare workers at Mercy Hospital picket in response to proposed job cuts. Allina had previously spent over $100M when it merged Mercy with Unity in 2016.[38]
Legally Questionable Practices
October 2019
  • Allina agrees to pay $2.4M to settle a class-action lawsuit alleging that executives violated their fiduciary duties by selecting and monitoring investment options in their retirement plans.[39]
Pushing Care Out of Hospitals
January 2020
  • Allina announces a partnership with the for-profit company Surgical Care Affiliates (SCA) to run and develop multi-specialty care centers that do not provide the same level of services and overall care as hospitals. SCA is a part of Optum, a subsidiary of insurance giant UnitedHealthcare.[40]
Cutting Healthcare Services and Worker Protections
April 2020
  • Allina announces that each of its employees that aren't involved in direct patient care will need to take at least one mandatory week-long furlough. The hospital system plans to retrain employees involved in direct patient care for new roles during patient surges.[41]
Cutting Healthcare Services and Worker Protections
May 2020-April 2021
  • RNs allege retaliation at United Hospital for raising concerns about access to scrubs and adequate PPE. An emergency department nurse is fired after wearing hospital-issued scrubs on duty while caring for COVID-19 patients. Allina hospitals are criticized for inconsistent policies, including United providing hospital-issued scrubs to physicians but not nurses.[42] An arbitrator later rules that United must reinstate the terminated nurse.[43]
Prioritizing Profits Over Patients
October 2020
  • Technical healthcare workers at St. Francis Regional Medical Center and Abbott Northwestern Hospital strike for protections when forced to quarantine. The protections workers sought are guaranteed to other workers.[44]
Cutting Healthcare Services and Worker Protections
October 2021
  • Allina announces it is temporarily closing its emergency department and urgency care in response to a strike by nurses at the Abbott Northwestern WestHealth campus in Plymouth. RNs seek fair compensation for overtime and work on holidays exacerbated by short staffing.[46]
  • After almost a half century of operation, Allina announces it is closing the Birth Center at Regina Hospital and transferring patients to the United Hospital Mother Baby Center in St. Paul.[47] During a public hearing, community members lament the loss of essential services and raise concern about the impact this has on women in the area.[48] Regina Hospital President Helen Strike responded by stating that the “decision is already made. And, we will not be reversing our decision based on the public comment.”[49]

Cutting Healthcare Services and Worker Protections
March 2022
  • Just a few months after Kelly Spratt, president of Cambridge Medical Center, gives a presentation on Allina’s commitment to “Meeting people where they are,” executives announce that they are relocating labor and delivery services to Mercy Hospital in Coon Rapids. Dr. Lisa Saul, President of Mother Baby Clinical Service Line at Allina, states that women are choosing to travel farther for birthing and delivery services.[50]

Cutting Healthcare Services and Worker Protections
April 2022
  • Allina once again moves to combine two metro hospitals, announcing a merger between United Hospital in downtown St. Paul and Regina Hospital in Hastings.[51]


[1] Allina Health System, “Whole-Person Care,” Allina Health, https://possible.allinahealth.org/whole-person-care/.

[2] Glenn Howatt, “Health Care Mergers in Twin Cities Raise Fears on Competition,” Star Tribune, December 12, 1993, Metro edition, sec. News;

———, “Medica Merging with HealthSpan to Become Allina,” Star Tribune, December 8, 1993, Metro edition, sec. News.

[3] Tom Majeski, “Allina’s $16 Million Settlement Accepted; Company Allegedly Overbilled Programs,” Minneapolis / St. Paul Business Journal, January 15, 2002, City edition, sec. Local.

[4] Paul McEnroe, Josephine Marcotty, and Glenn Howatt, “Hatch Attacks Allina Perks; Company Defends Its Golf Trips, Gifts, Exec Benefits – Correction Appended,” Star Tribune, March 22, 2001, sec. News.

[5] Modern Healthcare. “Struggling Allina Health Can’t Even Buy Good News,” July 30, 2001.

[6] Steve Karnowski, “Allina Health System Breaking into Two Companies,” The Associated Press State & Local Wire, July 20, 2001, sec. State and Regional.

[7] David Hanners and Tom Majeski, “Hatch Won’t Prosecute Allina Wrongdoing; Health Care Provider Will Pay $16 Million To Federal Government,” St. Paul Pioneer Press, September 25, 2001, sec. Main.

[8] Glenn Howatt and Josephine Marcotty, “Facing a Strike, Allina Announces 1,000 Layoffs,” Star Tribune, May 24, 2001, sec. News;

Tom Majeski, “Strike Won’t Hurt Care, Hospitals Say,” St. Paul Pioneer Press, May 24, 2001, Wisconsin edition, sec. Local.

[9] Maura Lerner and Jill Burcum, “Nurse Strike Settlement; Nurses OK Contract; 3-Year Deal Gives RNs Nearly 20% Pay Raise, More Say in Staffing,” Star Tribune, June 26, 2001, Metro edition, sec. News.

[10] The Associated Press State & Local Wire. “Minnesota Nurse Group near Settlement with Hospitals,” November 15, 2002, sec. State and Regional;

David Unze, “State Nurses Group Reaches Deal with Doctors, Hospitals in Medicare Case,” St. Cloud Times, November 16, 2002, sec. Local State.

[11] The Associated Press. “Hospital Charity Care Practices Challenged,” November 27, 2004, sec. State and Regional; Reuters Health Medical News. “Suit Filed against Hospitals over Charity Care,” June 18, 2004, sec. Legal.

[12] Lauren Wilbert, “Allina, Fairview Settlement Could Mean Discounts for Some Uninsured,” Minneapolis / St. Paul Business Journal, March 16, 2007.

[13] “Late News; Feds Probe 3 W.Va. Hospitals,” Modern Healthcare, June 21, 2004.

[14] Glenn Howatt, “Allina Ends Deal for Heart Practices; Agreement Ends State’s Antitrust Suit,” Star Tribune, June 28, 2005, Metro edition, sec. Business.

[15] Melanie Evans, “A Little off the Top,” Modern Healthcare, June 2, 2008, https://www.modernhealthcare.com/node/583941/printable/print;

David Phelps, “Allina Reduces Workforce by 350 Jobs; Most of the Cuts – a Response to Flat Revenue and More Charity Care – Were at Abbott Northwestern Hospital.,” Star Tribune, January 30, 2007, Metro edition, sec. Business.

[16] H.J. Cummins, “Women Sue Allina, Claiming Harassment; Seven Women Allege Sexual Harassment at an Allina Clinic. The Accused Doctor Denies the Allegations.,” Star Tribune, February 14, 2007, Metro edition, sec. Business.

[17] Christopher Snowbeck, “Cancer Center Controversy,” St. Paul Pioneer Press, April 25, 2007, sec. Business;

———, “Health Care Debate That’s Radioactive: Where to Build the Region’s Radiation Treament Centers,” St. Paul Pioneer Press, May 30, 2011, sec. Minnesota-Twin Cities.

[18] Josephine Marcotty, “Abbott Patient Burned during Surgery; A Sterile Drape and Nose Tube Caught Fire as Doctors Put in a Pacemaker. The Hospital Was Cited for Safety Violations.,” Star Tribune, August 12, 2008, Metro edition, sec. News.

[19] Maura Lerner, “Allina Says It Will Cut between 250 and 350 Jobs,” Star Tribune, October 4, 2008, Metro edition, sec. Business.

[20] Yvette Shields, “Minneapolis-Based Health System Hit With Suit Over High Interest Rates,” The Bond Buyer, January 26, 2009.

[21] Scott Carlson, “Attorney General’s Office Settles Suit with Minneapolis-Based Allina,” Finance and Commerce, April 15, 2009, sec. News.

[22] Chen May Yee, “Condition Critical: Part of an Occasional Series; Hospitals Forced to Become Bill Collectors; High Deductibles Mean More Unpaid Bills, so Hospitals Are Reaching Out Earlier,” Star Tribune, March 29, 2009, Metro edition, sec. News.

[23] Christopher Snowbeck, “United Hospital Settles Medicare Claim,” St. Paul Pioneer Press, May 17, 2010, sec. Business.

[24] Jackie Crosby, “Allina Will Pay $375,000 to Settle Federal Claim,” Star Tribune, March 14, 2012, https://www.startribune.com/allina-will-pay-375-000-to-settle-federal-claim/142710135/.

[25] Chao Xiong, “United Hospital Nurse Says She Was Fired after Voicing Complaints,” Star Tribune, June 21, 2013, https://www.startribune.com/united-hospital-nurse-says-she-was-fired-after-voicing-complaints/212513221/.

[26] Katharine Grayson, “Allina Health Cutting Jobs; CFO Leaving at the End of the Year,” Minneapolis / St. Paul Business Journal, November 5, 2014.

[27] “Business Briefing: Allina Health CEO Paulus to Retire This Year,” St. Paul Pioneer Press, November 11, 2014, sec. Business.

[28] Claire Kennedy, “Allina Health Workers to Picket Hospitals This Week,” Minneapolis / St. Paul Business Journal, March 24, 2015.

[29] Christopher Snowbeck, “Allina Pays $2.56M Settlement,” Star Tribune, October 31, 2015, Metro edition, sec. Business.

[30] Lorna Benson, “After weeks on strike, Allina nurses approve new contract,” MPR News, October 14, 2016, https://www.mprnews.org/story/2016/10/13/allina-nurses-approve-contract;

Jeremy Olson, “Allina Health Hospital Nurses Vote to Call for New Strike,” Star Tribune, August 19, 2016, https://www.startribune.com/allina-nurses-strike-back/390657111/;

———, “Allina Nurses Vote down Contract Offer, Authorize Strike Plans,” Star Tribune, June 7, 2016, https://www.startribune.com/in-vote-today-allina-nurses-could-accept-offer-or-authorize-strikes/381987931/.

[31] National Nurses Organizing Committee – MNA, “Allina Hospitals Charge Patients at Nearly 3 Times the Cost, Among Highest in Minnesota,” Press Release, National Nurses United, October 5, 2016, https://www.nationalnursesunited.org/press/allina-hospitals-charge-patients-nearly-3-times-cost-among-highest-minnesota.

[32] Jeremy Olson, “Unity Debate Mired in Strike,” Star Tribune, September 14, 2016, Metro edition, sec. News;

———, “Unity Hospital Activists Win Round,” Star Tribune, November 1, 2016, Metro edition.

[33] Christopher Snowbeck, “Feds Seek $8M from Abbott Northwestern,” January 6, 2017, Metro edition, sec. Business.

[34] Christopher Snowbeck, “Allina-Aetna Could Shake up Insurance Market,” Star Tribune, January 22, 2017, https://www.startribune.com/allina-aetna-could-shake-up-insurance-market/411374335/.

[35] Christopher Snowbeck, “Labor Savings Help Allina Boost Income,” Star Tribune, April 28, 2018, Metro edition, sec. Business.

[36] Jeremy Olson, “Allina Nurse Couples Feel Double Pinch from Strike,” Star Tribune, September 7, 2016, https://www.startribune.com/allina-nurse-couples-feel-double-pinch-from-strike/392519311/.

[37] Minnesota Nurses Association and National Nurses United, “Minnesota’s Most — and Least — Expensive Hospitals,” March 4, 2019, https://mnnurses.org/wp-content/uploads/2019/03/190304_MNA_Most-LeastExpensive_report.pdf.

[38] Carrigan Miller, “Workers Picket at Mercy Hospital over Alleged Staffing Cuts,” Minneapolis / St. Paul Business Journal, August 23, 2019.

[39] Robert Steyer, “Allina Health to Pay $2.4 Million to DC Participants under Proposed Settlement,” Pensions & Investments, October 18, 2019, sec. Courts, https://www.pionline.com/courts/allina-health-pay-24-million-dc-participants-under-proposed-settlement.

[40] Christopher Snowbeck, “Allina Partners with Optum on Surgery Centers,” Star Tribune, January 10, 2020, https://www.startribune.com/allina-partners-with-optum-on-surgery-centers/566878282/.

[41] Carrigan Miller, “Minnesota Hospitals Stare Down Almost $3B in Losses; Systems Tighten Belts,” Minneapolis / St. Paul Business Journal, April 10, 2020.

[42]Joe Carlson, “Workers Sue Hospitals over Safety,” Star Tribune, August 10, 2020, Metro edition, sec. News;

Analise Pruni, “Safety Issues Pit Nurses against United Hospital,” Minnesota Spokesman-Recorder, May 20, 2020, https://spokesman-recorder.com/2020/05/20/safety-issues-pit-frontline-nurses-against-allinas-united-hospital/.

[43] Ryan Basen, “Fired Minnesota Nurse Reinstated,” MedPage Today, May 4, 2021, https://webcache.googleusercontent.com/search?q=cache:fc7DkXp8fBYJ:https://www.medpagetoday.com/special-reports/exclusives/92406+&cd=4&hl=en&ct=clnk&gl=us.

[44] Maddie DeBilzan, “Shakopee’s Technical Healthcare Workers Go on Strike; Allina Says Move Is ‘Disappointing,’” Shakopee Valley News, October 8, 2020, sec. News.

[45]Frederick Melo, “Allina to Pull Medical Residents out of United Family Medicine Clinic on St. Paul’s West Seventh,” Minneapolis / St. Paul Business Journal, October 16, 2020;

James Walsh, “Clinic’s Split Divides St. Paul Patients,” Star Tribune, February 17, 2021, Metro edition, sec. News.

[46] Reid Forgave, “Allina Nurses to Begin Three-Day Strike,” Star Tribune, October 17, 2021, Metro edition, sec. News;

Mark Reily, “Allina Shuts ER, Urgent Care at Plymouth’s WestHealth Campus as Nurses Strike,” Minneapolis / St. Paul Business Journal, October 18, 2021.

[47] Sophia Voight, “Regina Hospital in Hastings to Close Birth Center Due to Declining Birth Rate,” Hastings Star Gazette, October 18, 2021, https://www.hastingsstargazette.com/news/regina-hospital-in-hastings-to-close-birth-center-due-to-declining-birth-rate/article_ffec0bcc-304a-11ec-b9fc-a3b7b5520186.html.

[48] “Regina Hospital Relocation of Labor and Delivery Services Public Hearing Transcript,” § The Minnesota Department of Health (November 18, 2021), https://www.health.state.mn.us/about/org/hrd/hearing/20211118reginatrans.pdf.

[49] Ava Kian, “Hastings: Regina Hospital to Send Expecting Moms to St. Paul to Give Birth,” Pioneer Press, November 16, 2021, https://www.twincities.com/2021/11/16/relocation-of-regina-hospital-labor-and-delivery-services-in-hastings-leaves-community-with-questions/.

[50] Nicole Hallman, “Cambridge Medical Center Focuses on ‘The Whole Way to Better’ Health Care amid Pandemic,” Hometown Source, October 29, 2021, https://www.hometownsource.com/county_news_review/free/cambridge-medical-center-focuses-on-the-whole-way-to-better-health-care-amid-pandemic/article_aeb4907a-3771-11ec-8dff-17fa2a40304c.html;

Rachel Kytonen, “Allina Health Outlines Transition of Labor, Delivery Services out of Cambridge,” Hometown Source, March 3, 2022, https://www.hometownsource.com/county_news_review/news/local/allina-health-outlines-transition-of-labor-delivery-services-out-of-cambridge/article_4824d618-9b1b-11ec-8df4-27ed5362e10f.html.

[51] Frederick Melo, “United Hospital in St. Paul and Regina Hospital in Hastings to Merge in August,” Pioneer Press, April 7, 2022, https://www.twincities.com/2022/04/07/united-hospital-in-st-paul-and-regina-hospital-in-hastings-to-merge-in-august/.