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California Sues Sutter Health, excessive pricing



California Attorney General announced a lawsuit against Sutter Health on Friday claiming that the hospital giant was involved in anticompetitive behavior, driving up prices for patients and employers in the state.

The lawsuit was a bold move by prosecutor Xavier Becerra, the dominant health care system in Northern California, which focuses nationally on the consolidation among hospitals, insurers and other industrial intermediaries

"It's time to hold health care companies accountable", Becerra said at a press conference on Friday. "We try to prevent Sutter from continuing this illegal behavior."

Sutter, which owns 24 hospitals, reported net income of $ 893 million and $ 1

2.4 billion in revenue last year.

In a statement, Sutter said on Friday Nevertheless, he saw the state's complaint and could not comment on any specific allegations.

Overall, Sutter said "healthy competition and choice exists in Northern California" for consumers looking for medical treatment and that their inpatient fees are lower than what they are (19659002) "Sutter Health prides itself on treating patients, government payers and others Health plans save hundreds of millions of dollars each year by providing more efficient and integrated care, "the statement said.

This high-profile legal opinion The fight will attract the attention of employers and policy makers across the country, and growing concern over the financial impact of industrial consolidation will emerge. Large health systems gain market power and the ability to increase prices by acquiring more hospitals, outpatient surgical centers and medical practices.

Martin Gaynor, a health economist at Carnegie Mellon University, said California's lawsuit could bring more litigation to the state

"There are a number of markets in the US that are dominated by a very large, powerful healthcare system," said Gaynor. "It may be that we will see a new level of activity by government antitrust authorities looking at competition in their own backyards."

The lawsuits over Sutter's high prices and market power have dragged on for years The 2016 study found that hospital prices at Sutter and Dignity Health, the two largest hospital chains in California, were 25 percent higher than other hospitals across the state , Researchers at the University of Southern California said the vast healthcare systems used their market power to boost prices, making the average patient admission rate for both chains nearly $ 4,000 more expensive.

This week, researchers from the University of California Berkeley published a report. This study examined the consolidation of the hospital, medical and health insurance market in California from 2010 to 2016. The authors said 44 of California's 58 counties had "highly concentrated" hospital markets ,

The problem is worse in Northern California and the report The prices for medical procedures are often up to 30 percent higher there than in Southern California, where more competition prevails.

"Consumers are paying more for health care as a result of market consolidation and it is now time for regulators and legislators to take action," said the Petris Center on Health Markets and Consumer Protection at UC Berkeley.

Following the release of the report on Monday, Becerra said its office will review its findings and commitment to further investigate mergers and anticompetitive practices across the state have led to Sutter Health's medical practices in the US Bay Area and gained market share that has driven up costs. Obstetricians employed by Sutter Health receive approximately three times more for the same benefit as independent physicians, according to a KHN report on OB-GYN fees from online cost estimates by various insurers. It is a major reason why Northern California is the most expensive place in the country to have a baby.

Becerra's lawsuit could build a similar civil lawsuit filed in 2014 through a grocery health plan.

"It's time to bring health companies to justice," said California Attorney General Xavier Becerra at a press conference on Friday. (Ana B. Ibarra / California Healthline)

Plaintiffs in court for next year claim that Sutter violates antitrust and competition laws. The plaintiffs have requested documents on contractual practices, such as "gag clauses," which discourage patients from seeking negotiated tariffs and choosing a more favorable provider. They also challenge "all-or-nothing" terms that require every facility in a healthcare system to be included in insurance networks.

In November, the state judge handling the grocers case said Sutter was "grossly ruthless." He purposely destroyed 192 boxes of documents that employers and unions sought in the lawsuit. Supreme Court Justice San Francisco County Curtis E.A. Karnow said Sutter destroyed documents because he knew the evidence was relevant to antitrust matters. … There is no good explanation for the specific and unusual destruction here. "

The lead plaintiffs, the United Food and Commercial Workers and their Employees Benefit Trust, are a joint employer-union health plan that represents more than 60,000 employees, family members, and retirees, and the court upheld its case in August as a class action lawsuit. so hundreds of other employers and self-funded health care plans could potentially benefit from the lawsuit.

In addition to its 24 hospitals, Sutter's community health system has 35 surgical centers, 32 urgent care clinics and more than 5,000 physicians on its network.

California Healthline Reporter Ana Ibarra and KHN senior correspondent Jenny Gold contributed to the coverage.


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