Minnesota Blue Cross CEO steps down from Sutter Health board over conflict of interest

Blue Cross and Blue Shield of Minnesota CEO Dana Erickson has stepped down from the board of directors at Sutter Health over conflict-of-interest concerns, leaving just two days before the California-based nonprofit announced a deal to acquire Minneapolis-based Allina Health.

Blue Cross is the largest nonprofit health insurer in Minnesota and pays bills for many patients who get care at Allina, one of state’s largest operators of hospitals and clinics.

The conflict would have been that Erickson could have been a board member at a big health provider that negotiates prices and sends bills to the major insurer where she’s CEO.

Erickson was named to the Sutter Health board in November 2025, after Sutter and Allina began discussing a deal roughly a year ago, Allina Health CEO Lisa Shannon said in an interview earlier this week.

In response to questions from the Minnesota Star Tribune, Blue Cross said Erickson had been recused from all content and discussions about the Allina acquisition. The insurer’s CEO did not participate in any vote related to the deal, the company said in a statement, and her “knowledge of this topic is limited to the information in the press release.”

“Dana Erickson resigned from the Sutter Health Board of Directors immediately upon learning of an activity resulting in a conflict of interest that could not be mitigated with lesser options,” Blue Cross said in its statement on Wednesday, March 18.

Erickson was not available for an interview. Sutter Health said she received $31,250 for her five months of work on its board.

Erickson was not brought on the board for the purpose of the Allina transaction, Sutter officials said, and she did not provide input.

Instead, they said, she worked on customary board matters unrelated to the deal. Among them was an ongoing systemwide transformation to expand access and stabilize operations that includes opening 45 new care sites and with more planned.

“While Erickson was recused and therefore not involved in the Allina matter, when it became clear the organizations were moving forward with a Letter of Intent, Erickson understandably chose to step down out of an abundance of caution and to fully remove any potential perceived conflict of interest moving forward,” Sutter Health said in a statement.

It’s not unusual for large organizations to keep board members with potential conflicts out of the loop until the late stages of a deal, said John Matheson, a professor of corporate and business law at the University of Minnesota Law School.

In November, Sutter Health likely invited Erickson to join the board because she had relevant industry expertise — not for her guidance on the Allina deal itself, Matheson said. Sutter may have wanted to start building a relationship with the top leader at Blue Cross of Minnesota, just in case the health system completed the Allina acquisition, he said.

“They probably wanted to show that Sutter is a good company, and Blue Cross shouldn’t be concerned about working with them. That makes good business sense, from my perspective ...,” Matheson said. “I don’t think it looks nefarious in any way.”

It’s also not unusual for nonprofit board members to receive compensation.

IRS filings show Sutter Health board members received annual compensation of anywhere from $55,208 to $72,709 in 2024, the most recent year with available data. Two board members received no pay.

Allina Health at the time paid 13 of its board members anywhere from $1,500 to $20,500. Another eight Allina board members received no pay in 2024, according to a regulatory filing.

Blue Cross of Minnesota, which also is a nonprofit, paid each of its 15 board members anywhere from $15,835 to $160,000 for work in 2024. That year Erickson received about $4.3 million in total compensation for serving as the insurer’s chief executive.

If the acquisition of Allina by Sutter closes as planned by the end of this year, Sutter would become the parent company of Allina, which would remain a separate operating unit as Sutter’s Upper Midwest division.

©2026 The Minnesota Star Tribune. Visit startribune.com. Distributed by Tribune Content Agency, LLC