December 23, 2020

Sutter Health’s Request to Delay $575 Million Settlement Is Denied

From the New York Times article:

“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.

In their report, however, the Petris Center researchers also pointed to the substantial financial cushion many of these hospitals have. They calculated that Sutter alone had more than $5 billion in financial investments and cash.

Sutter responded by saying that the demands of the pandemic are forcing it to look beyond those assets.

“While we are fortunate to have this ability based on our reserves, we believe we cannot solely support Covid-19 efforts today without responsibly balancing our future community and patient needs,” the health system said in an emailed response.

Mark Miller, a former federal official who is now an executive at Arnold Ventures, a philanthropy that has been a sharp critic of high hospital costs, argued the big systems should be using their reserves rather than seeking to raise their prices. “We might expect them to draw on their own resources,” he said, noting that they are also getting federal funds to help with their losses.

“There is a legitimate fear they will use those funds to engage in further consolidation and further price increases,” he said.

Employers, which joined with unions and the attorney general to bring the case against Sutter, argued that it should not be allowed to use its market power to raise prices, despite the pandemic. “What Sutter seems to have overlooked is the people paying these bills,” said Elizabeth Mitchell, the chief executive of the Pacific Business Group on Health, which represents employers that purchase coverage for their workers.

The crisis has made it much more difficult for employers, including state governments, and individuals to afford care, she said. “We do not believe price gouging and continued inflation of prices beyond what is necessary is sustainable,” she said. “Families and business can’t absorb those costs.”

Read the full New York Times article here.

Read about Sutter Health’s Request to Delay $575 Million Settlement Is Denied via The New York Times   (opens in new window)