According to a Kaiser Health News report published on Dec. 20 in the Los Angeles Times, the Sacramento, California-based “Sutter Health will pay $575 million to settle a closely watched antitrust case filed by California Attorney General Xavier Becerra, whose office had accused the nonprofit healthcare giant of using its market dominance in Northern California to illegally drive up prices.”
As Jenny Gold of Kaiser Health News reported, “Under terms of the agreement, Sutter will continue to operate as an integrated system. But it has agreed to end a host of practices that Becerra alleged unfairly stifled competition, including all-or-nothing contracting deals demanding that an insurer that wanted to include any one of the Sutter hospitals or clinics in its network must include all of them — even if some of those facilities were more expensive than a competitor’s. The agreement includes the appointment of a jointly approved special monitor who will be charged with ensuring that Sutter is following the terms of the agreement for at least the next 10 years. Becerra announced details of the settlement, which he termed ‘historic,’ at a news conference Friday in Sacramento.”
At the news conference, Becerra stated that, “When one healthcare provider can dominate the market, those who shoulder the cost of care — patients, employers, insurers — are the biggest losers. Today’s settlement will be a game-changer for restoring competition in our healthcare markets,” he said.
As Kaiser Health News’s report in the L.A. Times noted, “ The terms of the agreement are subject to approval by San Francisco Superior Court Judge Anne-Christine Massullo, who is expected to deliver a preliminary ruling on the agreement in February. Among other terms, the settlement requires Sutter to: limit what it charges patients for out-of-network services; increase transparency by allowing insurers and employers to give patients pricing information; cease bundling services and products, and instead offer standalone pricing.”
The report noted that “Healthcare costs in Northern California, where Sutter is dominant, are 20% to 30% higher than in Southern California, even after adjusting for cost of living, according to a 2018 study from the Nicholas C. Petris Center at UC Berkeley that was cited in the complaint.”
