Antitrust: Sutter Health case settles
Sutter Health has reached an agreement to settle a classaction lawsuit brought by thousands of employers, and later joined by California Attorney General Xavier Becerra, that sued the health care system for allegedly abusing its market power to raise prices for consumers.
The details of the settlement are confidential. Court hearings for preliminary approval of the agreement will likely take place in February or March, said San Francisco Superior Judge AnneChristine Massullo, who is overseeing the case.
The agreement was announced Wednesday just as the case was nearing trial and attorneys were preparing to present opening statements to jurors.
The United Food and Commercial Workers and Employers Benefit Trust, a union trust that pays for its workers’ health care costs, sued Sutter in 2014, and the case was later certified as a class action on behalf of 1,500 selfinsured employers and trusts in California. Becerra’s office filed a nearly identical suit in
2018, and it was combined with the original case for purposes of a trial.
The agreement resolves both cases.
The suits accused Sutter, Northern California’s largest health system with 24 hospitals and 35 outpatient centers, of using its market power to drive up health care costs for employers, insurers and, ultimately, consumers. The complaints focused on Sutter’s contracting practices, alleging that the health system pressured insurers and employers to accept all or nothing terms that compelled them to contract with all Sutter hospitals or none. Experts say this practice prevents insurers and employers from negotiating with individual hospitals for lower prices.
Sutter has denied engaging in anticompetitive behavior.
Attorneys and spokespeople for the union and Sutter declined to elaborate on the settlement beyond saying one has been reached. A spokeswoman for Becerra said the office cannot comment until the final agreement is approved by the court.
The class of employers and trusts had been seeking damages of up to $500 million, which under antitrust law could have made Sutter liable for $1.5 billion.
Becerra’s office was seeking injunctive relief to prevent Sutter from engaging in anticompetitive behavior in the future.