Sutter Health, a 24-hospital not-for-profit California health system, and Blue Shield of California have come to an agreement after a monthlong feud over price increases and new contract terms.
The parties signed a two-year contract, which will expire at the end of 2016. Blue Shield officials initially had objected to what they said were unusually high charges for healthcare services and a contract that required the health plan and its self-insured customers to take anti-competitive complaints to an arbitrator instead of the court system.
Sutter said its overall price increase was “less than 1%,” and argued that using arbitration to settle disputes is the “standard in the healthcare industry.” According to a Sutter news release, the contract calls for arbitration for all disputes, which had been the prior process between the two companies, according to Sutter.
Blue Shield said in a written statement that the contract details were confidential, but a spokesman disputed Sutter's claims that all disputes will be handled through arbitration under the new contract, and further rejected the system's claim that there was precedent.