clearn.png
Friday October 18th, 2019 5:42AM

California hospital chain going to court over high prices

By The Associated Press
Related Articles
  Contact Editor

SAN FRANCISCO (AP) — One of California's largest hospital systems is facing a trial over accusations that it has used its market dominance to snuff out competition and overcharge patients for medical bills.

The antitrust lawsuit against Sutter Health, which operates 24 hospitals with 5,500 doctors across Northern California, was first brought by employers and unions amid growing frustration over the rising cost of health care in 2014. California's attorney general, Xavier Becerra, filed a similar suit last year following a six-year investigation.

"We're alleging that Sutter Health Systems is offering care at a higher price and perhaps even undermining quality by the way it goes about doing its business," Becerra said in a briefing ahead of last month's jury selection. "And that's not only not fair, but we believe and we allege it is against the law."

"Bottom line," Becerra said, "the public is being ripped off."

Opening statements scheduled to start Thursday were postponed until next week because not enough jurors were present, San Francisco Superior Court Judge Anne-Christine Massullo told a packed courtroom.

The trial is expected to last several months. The lawsuit points to research showing that health care costs in Northern California are higher than elsewhere in the state, including a 2018 study that found unadjusted inpatient procedure prices are 70% higher in Northern California than Southern California.

"Much of the increased cost of health care in Northern California is attributable to Sutter" the attorney general alleges in a 49-page complaint that details a range of anticompetitive practices it says the Sacramento-based nonprofit has pursued as it gobbled up competition.

In the 1990s, Sutter embarked on "a deliberate strategy" to gain market power in certain geographic areas through a campaign of mergers and acquisitions, the parties allege, noting that Sutter's assets rose to $15.6 billion in 2016 from $6.4 billion in 2005.

Sutter Health denies the claims, saying it faces fierce competition across the San Francisco Bay Area and the Sacramento Valley and insurance companies are to blame for pushing up costs.

"Sutter Health looks forward to demonstrating in court why its integrated care model promotes competition and, most importantly, benefits patients and communities," Sutter spokeswoman Amy Thoma Tan said in a statement. She said the largest health insurance companies support the lawsuit.

"Insurance companies want to maximize profits by pushing insurance plans that limit their choices and result in surprise billing," Thoma Tan said.

At issue are several of Sutter Health's contracting policies that Becerra says have allowed the company to "thoroughly immunize itself from price competition."

One way insurance companies keep costs down is to steer patients to cheaper health care providers through a variety of incentives. Becerra says Sutter Health bans insurance companies from using these incentives, making it harder for patients to use their lower-priced competitors.

Becerra also says Sutter has an "all or nothing" approach to negotiating with insurance companies, requiring them to include all the company's hospitals in their provider networks even if it doesn't make financial sense to do so.

The case was originally filed in 2014 by a group of self-funded employers and picked up steam last year when Becerra filed a similar lawsuit and the cases were combined.

Becerra's lawsuit seeks to halt Sutter's alleged practices and does not seek monetary damages. But the private litigation brought by a class of about 1,400 self-funded employers seeks damages that could exceed $1 billion.

It's rare for antitrust lawsuits of this size to go to trial. Atrium Health, a North Carolina-based hospital system, settled a similar anti-trust lawsuit with the federal government last year. And CHI Franciscan, a health system based in Washington state, also settled similar claims in March that had been brought by the state.

  • Associated Categories: Associated Press (AP), AP Health, AP Business, AP Business - Corporate News, AP Business - Industries, AP Business - Financial Services, AP Business - Health Care
© Copyright 2019 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
Cuba Gooding Jr.'s groping trial set to begin on Thursday
Cuba Gooding Jr.'s New York trial on groping charges is set to begin
12:25AM ( 10 minutes ago )
Dodgers, Nationals tied at 3 after 9 innings in NLDS Game 5
The Washington Nationals and Los Angeles Dodgers are tied 3-3 after nine innings in Game 5 of their NL Division Series after Clayton Kershaw blew a two-run lead by allowing homers to Anthony Rendon and Juan Soto on consecutive pitches in the eighth
12:24AM ( 11 minutes ago )
GM workers worry about paying bills as strike continues
The losses are piling up for both sides in the nearly four-week old against General Motors
12:17AM ( 18 minutes ago )
Associated Press (AP)
Alaska Supreme Court hears youth climate change lawsuit
Attorneys for 16 young Alaskans who sued over state climate change policy have argued their case before Alaska Supreme Court justices
8:52PM ( 3 hours ago )
Alaska Supreme Court to hear youths' climate change lawsuit
Attorneys for 16 young Alaskans who sued over state climate change policy are expected to argue their case before Alaska Supreme Court justices on Wednesday
8:41PM ( 3 hours ago )
California bans pesticide linked to brain damage in children
California environmental officials say a popular agricultural pesticide they say has been linked to brain damage in children will be banned after next year under an agreement reached with its manufacturer
8:38PM ( 3 hours ago )
AP Health
Lights out: Power cut in California to prevent deadly fires
California's biggest utility cut power to more than a million people Wednesday for what could be days on end in the most sweeping effort in state history to prevent wildfires caused by windblown power lines
11:30PM ( 1 hour ago )
The Latest: PG&E blames Diablo winds for power cuts
Pacific Gas & Electric says Diablo winds are to blame for extreme fire weather that has prompted it to shut off power to more than 1 million people
10:15PM ( 2 hours ago )
The Latest: PG&E restored power to some; more cuts coming
Pacific Gas & Electric Co. says it's already been able to restore service to about 44,000 customers after it cut power to a million people because of high winds that create a high fire danger
9:44PM ( 2 hours ago )
AP Business
Ukraine's Zelenskiy plays hot and cold with Trump team
Ukraine's president appears to be playing to both sides of the U.S. political divide
2:07PM ( 10 hours ago )
Facebook CEO to appear before Congress on currency plan
Facebook CEO Mark Zuckerberg will appear before Congress this month as the tech giant is under pressure from lawmakers and regulators over its massive market power and record of privacy breaches.
2:06PM ( 10 hours ago )
Court hears case on paternity leave at Japanese brokerage
Tokyo court hears paternity leave case against major Japanese brokerage
6:24AM ( 18 hours ago )
AP Business - Corporate News
Nobel prize honors breakthroughs on lithium-ion batteries
Three scientists win Nobel Prize in chemistry for their contributions to lithium-ion batteries
6:23PM ( 6 hours ago )
The Latest: One planned power shut-off pushed back
An estimated noontime power shut-off for Oakland has been pushed back to 8 p.m. Wednesday after utility officials said wind gusts had not reached problematic speeds yet
5:50PM ( 6 hours ago )
US nuclear, uranium mining industries hope for Trump bailout
U.S. uranium mining companies and nuclear power plant operators are hoping for a bailout in the name of national security
5:26PM ( 7 hours ago )
AP Business - Industries
UK central bank: financial sector ready for no-deal Brexit
The Bank of England says the U.K. financial system is prepared for a no-deal Brexit though ongoing uncertainties about the country's withdrawal from the European Union continue to weigh on economic activity
5:44AM ( 18 hours ago )
Powell sees cooler US hiring in possible hint of rate cuts
Fed Chair Powell sees cooler US job market after data changes
5:04PM ( 1 day ago )
Aging Holocaust survivors try to sue over Nazi-era insurance
Holocaust survivors seek access to U.S. courts over billions of dollars in insurance policies that were never honored by Nazi-era companies
5:00PM ( 1 day ago )
AP Business - Financial Services
Overhaul is proposed for decades-old Medicare fraud rules
Trump administration proposes overhaul of Medicare fraud rules seen as outdated
8:04AM ( 16 hours ago )
California OKs pharmacists to dispense HIV prevention meds
California's governor has signed legislation that will allow patients to buy HIV prevention pills from pharmacists without a prescription
7:31PM ( 2 days ago )
Dank, the brand that isn't, scrutinized amid vaping illness
Illegal vaping cartridges sold under the name "Dank" are figuring prominently in the federal investigation into an outbreak of lung illnesses apparently tied to vaping.
6:11PM ( 5 days ago )
AP Business - Health Care
Cuba Gooding Jr.'s groping trial set to begin on Thursday
Cuba Gooding Jr.'s New York trial on groping charges is set to begin
12:25AM ( 11 minutes ago )
Dodgers, Nationals tied at 3 after 9 innings in NLDS Game 5
The Washington Nationals and Los Angeles Dodgers are tied 3-3 after nine innings in Game 5 of their NL Division Series after Clayton Kershaw blew a two-run lead by allowing homers to Anthony Rendon and Juan Soto on consecutive pitches in the eighth
12:24AM ( 11 minutes ago )
GM workers worry about paying bills as strike continues
The losses are piling up for both sides in the nearly four-week old against General Motors
12:17AM ( 18 minutes ago )
El Paso mass shooting suspect faces trial judge for 1st time
The 19-year-old suspect in the fatal shooting of 22 people at a Texas Walmart is set to face his trial judge for the first time since his arrest
12:16AM ( 19 minutes ago )
White House aides try disappearing act amid impeachment talk
White House officials execute disappearing act amid impeachment drama
12:16AM ( 20 minutes ago )