by Steve Timmer

Apr 11, 2026, 9:00 PM

Deconstructing Parente

There were in recent days two competing views on the proposed merger of California’s Sutter Health and Minnesota’s Allina Health. An op-ed against the merger was published in the Minnesota Reformer, authored by Thomas Lane, of Excelsior, Minnesota, a health economics, policy and management master’s student at the Karolinska Institute in Stockholm, Sweden. One in favor of the merger was contained in an editorial by Jill Burcum of the Minnesota Star Tribune, referring to remarks in an interview with Carlson School of Management’s Stephen Parente, a member of the Council of Economic Advisors in the first Trump administration. Make of that what you will.

In comparing the two opinions, Parente wins the silver medal. I invite you to read both views at the links above and see if you don’t agree with me. I’ll bet you do agree with me.

Lane says:

Studies have shown that when two health systems merge — even in geographically distinct markets — they can leverage their size to negotiate higher prices with insurers, which will likely [well, will] pass the cost on to consumers.

Guess who you are, gentle readers.

Sutter Health is “agressive,” says Stephen Parente. Swell, aggression is always a quality I look for in a health system provider. I look forward to being greeted by my Allina primary care physician:

What’s the matter with you, mofo? We’ve got executives to pay.

And as Lane explains, you will pay. More.

Parente provides airy explanations of the “efficiencies” that will be brought about by the acquisition. Other than providing more revenue to pay top executives, I can’t see what they are.

Parente says not to be afraid of an out-of-state acquisition. Look at the Northwest Airlines acquisition by Delta; that worked out so well! Parente conveniently forgets the leveraged buyout of Northwest Airlines by Al Checchi and his brigands that saddled it with enormous debt, nearly bankrupted it, imperiled public investment in the airport, and left it ripe for the pickings by Delta. It’s a horseshit analogy. Wait, maybe it’s a good analogy for why this merger is such a bad idea.

Parenthetically, I have to mention that I owned a small airplane at the time, and it had a red tail. I used to observe that it was the only airplane in town with a red tail that had any equity in it.

Northwest/Delta and Allina/Sutter is also a terrible analogy because Northwest and Delta, as public companies, were subject to the discipline of capital markets. That’s not true of a non-stock nonprofit like Allina Health. Allina’s only discipline comes from regulators, such as Keith Ellison’s Attorney General’s office.

I didn’t even have to think that hard to write this. Thomas Lane obviously did think hard about it, and I urge you to pay close attention to what he wrote.

Burcum’s editorial makes reference to the last time we went through this exercise: Sanford Health’s attempted acquisition of the Fairview System. Burcum tries to distinguish it, but I think the two situations are directly comparable. Our last attorney general, Lori Swanson, clouded up and rained all over Sanford Health; let’s hope Keith Ellison does so here.