Sutter lawsuit could spur scrutiny on consolidated healthcare markets
The California attorney general's decision to challenge Sutter Health's market dominance should be a wakeup call to other large providers across the country, experts said.
Xavier Becerra filed a lawsuit on March 29 that is the culmination of a six-year investigation accusing Sutter Health, the largest provider in Northern California, of anticompetitive behavior that inflated healthcare prices.
Other states may follow California's lead, particularly as they pick up bigger shares of healthcare expenses, said Ben Waldin, an associate at law firm Eimer Stahl. "It should be a concern to any major multihospital system in any state that has significant market share and maybe engages in some of these practices," he said.
The complaint alleges that Sutter, which operates 24 hospitals throughout Northern California, would pitch "all or nothing" contracts with insurers that exclude competitors. Also, these contracts allegedly bar payers from sharing price information before treatment.
In a statement, Sutter said the attorney general's lawsuit is inaccurate and its total inpatient charges are lower than other Northern California hospitals. The statement went on to note that Sutter limited overall rate increases to health plans to the low single digits, and that competition is healthy in the Bay Area.