Sacramento, Calif.-based Sutter Health recorded operating income of $84 million (1.6% operating margin), down from operating income of $86 million (1.8% margin) during the same period last year.
Four things to know:
1. Sutter reported total operating revenue of $5.2 billion during the three months ended March 31, a 10.7% increase year over year. Patient service revenue was $4.6 billion, an 11.1% increase attributed primarily to increased patient volumes. Premium revenue increased 10.7% to $581 million.
2. Total operating expenses were $5.2 billion, a 10.9% increase year over year. Salaries and employee benefits totaled $2.3 billion, a 6.9% increase primarily driven by labor force expansion. Purchased services totaled $1.5 billion, an 11.8% increase primarily driven by volume growth at medical foundations. Supply expenses increased 17% to $737 million, primarily due to increased volumes and costs.
3. Sutter and Minneapolis-based Allina Health on May 21 signed a definitive agreement formalizing plans to create a combined nonprofit health system spanning California, Minnesota and Wisconsin. The transaction would create a system with 39 hospitals and more than 400 care sites serving more than 5 million patients. The organizations plan to invest more than $2 billion in Minnesota and western Wisconsin to expand ambulatory care, grow specialty institutes and support digital and AI-enabled tools. Under the proposed deal, Allina Health would become Sutter’s Upper Midwest Division while retaining its brand, board of directors and Minneapolis headquarters.
4. Sutter reported a net income of $231 million in Q1 2026, up from $192 million during the same period last year.
