Minnesota Attorney General Mike Hatch has called on Allina Health System to split into two companies, separating the 1 million-member Medica health plan from the 19 hospitals and 48 clinics of the health system, according to a story last week in the Minneapolis Star Tribune.
In a confidential report to the Allina board of directors, Hatch said conflicts of interest within the healthcare organization were so severe that Medica premium dollars have been diverted to shore up Allina's hospitals or corporate office. Allina's general counsel denied that the not-for-profit health system has been mismanaged and said he could not comment on the specifics of the report until after thoroughly reviewing it.
Sources familiar with the situation say a deal is imminent in which Allina will spin off Medica as a separate company and Allina Chief Executive Officer Gordon Sprenger and Chief Operating Officer David Strand will depart, according to the Star Tribune. Sprenger previously has announced plans to retire this month.
In response to the article, Allina released a written statement that said: "The Allina Health System board began its strategic planning in November of last year. Allina leadership is committed to working with the board of directors to support their strategic planning and to implementing that strategy. The Allina board and leadership continue discussions with the attorney general regarding his audit. We will be working with the attorney general to clarify and complete the information and analysis provided in the report."