California Takes Sutter Health to Court Over Healthcare Costs

Sutter Health, which counts 32 urgent care clinics, 24 hospitals, and 35 surgery centers among its vast holdings, is the target of a lawsuit from the California attorney general, charging that it engages in anticompetitive practices that drive up prices for consumers and insurers. The suit is also viewed as an indictment of industry consolidation, which is resulting in fewer entities and less competition. While it has declined to comment on the suit specifically, Sutter did issue a statement maintaining that “healthy competition and choice exists across northern California,” where the company is a dominant player. It has also said that its charges for hospital inpatient stays, at least, are lower than those levied by nearby hospitals. That begs the question of how localized cost comparisons should be, as a 2016 study revealed that both Sutter and Dignity Health posted costs were as much as 25% higher than other systems across the state as a whole. Healthcare analysts have conceded that costs are especially high in northern California in general, often 30% higher than in southern California, where there is more competition for patients.