PBGH brought employers and unions together with California’s Attorney General to successfully file a class action suit against Sutter Health’s use of market power and monopolistic business practices that cost employers and employees. This has been a 10-year effort by PBGH that was settled December 2019. Most eligible California employers and unions have now received an initial settlement payout.
Details of the Landmark Settlement
The settlement: $575 million
10-Year injunctive relief: Potential greater dollar value to employers and purchasers:
- Limit chargemaster increases
- Reduce surprise billing
- Prevent all-or-nothing contracting practices
The Price Employers Paid
Sutter’s profit from commercially insured patients averaged over $1.5 billion annually, representing a 43% margin more than the last decade. Average hospital inpatient procedures in Northern California cost $223,278 compared to $131,586 in the South.
The Windfall for Employers
California-based companies, government entities and labor trusts will receive a payout based on past medical claims overpayments to Sutter Health.
Payouts vary based on the disparity between excess Sutter rates compared to the geographic community and the dates claims were incurred.
Hospital Consolidation Impact on Price
60 Minutes interviews PBGH CEO about the landmark Sutter Health lawsuit
How a hospital system grew to gain market power and drove up California health care costs
Modern Healthcare: Sutter and Calif. AG Revamp Their Search for Antitrust Monitor
“It just underscores that without antitrust action, these behaviors aren’t changing,” said Elizabeth Mitchell, CEO of PBGH, an employer coalition that includes 20 of the lawsuit’s class members.
NYT: Sutter Health’s Request to Delay $575 Million Settlement Is Denied
Sutter contended that it might not be able to abide by the settlement terms, and raised the possibility that it would have to charge higher prices beyond the limits in the agreement because of surges in Covid-19 patients.
Healthcare Finance: Court denies Sutter Health’s request to delay $575M settlement
This case could have nationwide implications if other states begin to examine and challenge local practices, according to Elizabeth Mitchell, CEO of Pacific Business Group on Health, which initiated the lawsuit on behalf of employers and stakeholders.
Sutter’s Request to Delay Antitrust Settlement Hearing Denied
PBGH CEO, Elizabeth Mitchell said Sutter did not produce evidence that COVID-19 limits its ability to meet the requirements under the settlement the health system agreed to.
Court Denies Sutter Health’s Motion for 3-Month delay
Elizabeth Mitchell, CEO of the Pacific Business Group on Health (PBGH), said Judge Massullo’s one-month delay was “disappointing” but still better than the three-month delay requested by Sutter.
PBGH’s Response to AHA’s Sutter Health Settlement Statement
The Pacific Business Group on Health (PBGH) is deeply troubled by the misleading statement put out by the American Hospital Association (AHA) in regard to settlement between Sutter Health System and the Attorney General of California.
Modern Healthcare: Sutter Health to pay $575 million antitrust settlement
Sutter Health agrees to pay $575 million antitrust settlement with up to 13 years of monitoring.
Elizabeth Mitchell talks about Sutter Health to HealthLeaders
PBGH CEO on Sutter Health antitrust settlement: ‘I don’t think this issue will go away’
The Cost of Provider Consolidation: The Employer’s Perspective
Final Approval Granted for the Sutter Health Settlement
The settlement agreement achieved in the Sutter Health case, along with the injunctive relief, will have a significant and beneficial economic impact.