Sutter is sending out letters to more than 940,000 patients whose names, medical diagnoses and procedures were on file on the computer.
Three million other patients' files include their names, birth dates, and medical record numbers, but no medical information.
Sutter President Pat Fry says the company has already taken steps to prevent patients' information from being compromised.
The company says it was already in the process of encrypting its computers when the desktop computer was stolen in mid October. Those encryption efforts have been accelerated dramatically since the theft.
According to the report filed on October 17th with the Sacramento Police Department, whoever stole the computer threw a large rock through a window of an office on Gateway Oaks Drive. The thieves then climbed inside, and also stole four computer monitors, two keyboards, two mouse keys, and two keyboard trays.