Becerra applauds judge’s refusal to delay finalizing Sutter’s $575M antitrust settlement
San Francisco Superior Court Judge Anne-Christine Massullo denied Sutter Health’s motion to delay finalizing its $575 million settlement with the state of California in a case that alleged anti-competitive practices.
The benefits arm of the United Food & Commercial Workers began pursuing this civil lawsuit in 2014, but four years later, California Attorney General Xavier Becerra said that, because Sutter’s actions were driving up prices all around Northern California, he was filing a lawsuit that would consolidate the grocery worker’s lawsuit.
Becerra expressed satisfaction that the judge ruled in favor of the California Department of Justice’s motion to deny any delays: “Sutter’s practices harmed California’s healthcare market by charging higher prices unrelated to quality or cost of care. They did that long before the COVID-19 pandemic. There is no period of time that medical providers, like Sutter, should be able to carry out such destructive market practice.”
Sutter had asserted in its motion that the company needed time to assess and make changes to its businesses following financial losses incurred during the COVID-19 pandemic. The company said it spent millions adding surge capacity even as hospital admissions drastically dropped.
“Our entire integrated network acted quickly to adapt our ‘normal’ operations and prepare and manage through patient surges in response to this pandemic,” company officials said in a statement sent to The Bee Friday. “Over the last few weeks, like the rest of the state, we’ve seen an uptick in cases of COVID-19, including hospitalizations that have pushed us to our highest surge levels. This surge requires ongoing emergency response efforts across our integrated network as we continue to provide high quality care during these uncertain times.”
Researchers at the University of California, Berkeley, released on Monday an analysis of hospital finances that showed Sutter had enough cash on hand to continue functional operations for 12 days, roughly 56 percent below the industry median of 27 days reported by health care consultant Optum in 2015. The Sacramento-based company can run for 150 days when both its cash and securities are included, the Berkeley researchers said.
“It’s important that we keep reserves on hand to fund commitments to our patients today as well as remain solvent s we can care for our patients and communities for the many decades ahead,” company leaders stated in an email to The Bee. “It’s because we’ve reinvested in our communities that we are well-positioned to handle a surge, but even that preparedness couldn’t prevent the impact of the drastic drop off caused through the cancellation of surgeries and the decreased number of patients willing to seek care.”
Health consumer advocate Anthony Wright of Health Access California said: “Now more than ever, Northern Californians need relief from the so-called Sutter surcharge they face in part because of Sutter Health’s concentrated power, as well as their anti-competitive practices and contract provisions. This settlement begins to attack the reason why inpatient rates are 70 percent higher in Northern California, and premiums are typically $3,000 more for coverage here than in Los Angeles.”
In addition to the $575 million in damages, which will go to the UFCW & Employers Benefit Trust and others involved in the class-action suit, the December 2019 settlement requires monitoring and changes in contracting and operational practices.
The judge set Aug. 12 and 13 as the new dates for hearings to finalize the preliminary settlement, according to the Attorney General’s Office.
Jacques Loveall, who chairs the UEBT, noted that grocery workers are ensuring that Californians have access to groceries and other essential supplies during the COVID-19 crisis, and UEBT is providing them access to quality, affordable health care as they do it.
“We are thankful that this landmark settlement will move forward,” he said. “Now more than ever, Northern California patients and employers must be protected from inflated health care costs.“
Correction: The number of days estimated by UC Berkeley researchers that Sutter Health has cash and securities on hand is 150 days. Data provided to The Bee in the original story was incorrect.
This story was originally published July 10, 2020 at 1:48 PM.
