Xavier Becerra said Friday that the lawsuit is based on a six-year investigation of his office in Sutter's practices. The Attorney General filed a lawsuit at the San Francisco County Superior Court
The Sacramento-based system operates 24 hospitals across Northern California with more than 4300 beds, the complaint said.
"It is time to bring health companies to justice and reduce the illicit bloated health care costs imposed on California families," Becerra said at a press conference on Friday. "We try to prevent Sutter from continuing this illegal behavior."
Becerra said his office investigation revealed that Sutter's practices violated state antitrust laws. He said the health care contracting practices with health insurers were conducted as part of an "all or nothing" approach that prevented insurers from providing California residents with affordable health plan options. He also accused Sutter of over pricing the network and limiting the transparency of provider cost information.
Becerra cited a recent California University Berkeley report as further evidence that the consolidated healthcare market in Northern California has pushed prices higher. This report found that the average hospital in-patient treatment cost $ 1
"That's more than a $ 90,000 difference for essentially the same bundle of hospital inpatient procedures," Becerra said.
Sutter spokeswoman Karen Garner wrote in an e-mail that the health care system has not yet seen the complaint, so she can not comment on the allegations. She wrote that Sutter saves patients, government payers and health plans "hundreds of millions of dollars" each year by providing efficient, integrated care. She added that Sutter had kept the overall rate increases at a low single-digit level since 2012, even though labor, equipment and technology costs had increased more than 37% over the same period.
Garner added that there are 15 hospital systems and 142 hospitals in Northern California, including Kaiser Permanente, Dignity Health and Adventist.
"And health plans may choose to include or exclude portions of the Sutter healthcare system from their networks, and health plans have been doing so for many years," she wrote.
Sutter's total revenue in 2016 exceeded $ 12 billion, according to Modern Healthcare.