PBGH CEO discusses the landmark Sutter Health lawsuit on 60 Minutes
How a hospital system grew to gain market power and drove up California health care costs
Sutter Health is in the midst of a lawsuit for business practices that drove up health care prices for Californians.
From the 60 Minute Interview:
“According to the lawsuit, Sutter used its leverage to force the big companies and their insurers into what are called “all-or-nothing” contracts, meaning that they had to include all 24 of Sutter’s hospitals in their health plans.
Elizabeth Mitchell: And sometimes they would have to include hospitals that were in regions that the employers didn’t even have employees in.
Lesley Stahl: Sutter was forcing big companies to cover hospitals in places where nobody worked for the company lived?
Elizabeth Mitchell: That’s right. It was all or nothing and no employer could do without all of the Sutter system.
We asked Sutter for an interview, but the hospital declined and instead sent us a statement saying, in part, that it’s committed “…to high-quality, affordable care…” and that its coordinated health care network “delivers healthier patient outcomes at a lower total cost of care,” something that “…has proven even more critical during the COVID-19 pandemic.”
Lesley Stahl: Sutter says that when you have a system as big as theirs, what they can offer is coordinated care. They can reduce duplication and they can cut costs. Now that sounds reasonable.
Elizabeth Mitchell: Well, that is true in every other industry. That they use their size to reduce their prices. And yet the opposite has been true in health care. They merge and then they use their market leverage to increase prices.
Lesley Stahl: But what about this idea of coordinated care? I think that was one of the reasons that these mergers were allowed to happen.
Elizabeth Mitchell: Coordinated care is what everybody wants. The problem is it has not been achieved in these mergers. We’re not getting better outcomes. We’re not getting, you know, healthier people.
Most alarming, she says, hospitals across the country have been following Sutter’s lead.
Elizabeth Mitchell: This is happening in Maine. It’s happening in Texas. It’s happening across the country, the largest health systems are buying up everything.
Lesley Stahl: Do you think that this is the main reason that health costs are going up?
Elizabeth Mitchell: We have seen the data. It is the largest driver of health care cost increases. It’s hospital prices. And they’re not providing more services. And the quality isn’t increasing. They are just charging more for the same thing. It is just the prices. And they do it because they can.”