October 16, 2019; NPR, “Shots”
When thinking about scale, it is wise to understand that there may be some very significant downsides to getting large, at least as it concerns those you serve.
Just as opening arguments in its antitrust trial were about to begin, Sutter Health, a massive Norther California Health System in Northern California announced it had reached a preliminary settlement of the case, though the details are as yet unknown.
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Those details, according to the judge, are not likely to be made public before February or March, when approval hearings will be held, but California Attorney General Xavier Becerra went on record before the suit was settled saying he expected Sutter to face damages of up to $2.7 billion.
The suit, which we covered back on October 7th, alleged that Sutter violated antitrust laws by using its market power to illegally drive up prices in Northern California, where those prices are 20 to 30 percent higher than in Southern California to begin with. The figures cited in the complaint come from a study issued in 2018 by the Nicholas C. Petris Center at the University of California, Berkeley. Thus, as the New York Times reports, “While hospital care for a heart attack costs around $25,000 in San Francisco, for example, the price is closer to $15,000 in parts of Los Angeles.”
Other hospitals and state attorneys general are watching this case closely, as it could have widespread implications.—Ruth McCambridge