Skip to main content
Sister Publication Links
  • ESG: THE NEW IMPERATIVE
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Current News
    • COVID-19
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • Transformation
    • People
    • Regional News
    • Digital Edition (Web Version)
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Midwest
    • Northeast
    • South
    • West
  • Digital Health
  • Insights
    • ACA 10 Years After
    • Best Practices
    • Special Reports
    • Innovations
  • Opinion
    • Bold Moves
    • Breaking Bias
    • Commentaries
    • Letters
    • Vital Signs Blog
    • From the Editor
  • Events & Awards
    • Awards
    • Conferences
    • Galas
    • Virtual Briefings
    • Webinars
    • Nominate/Eligibility
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Excellence in Governance
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top 25 Innovators
    • Diversity in Healthcare
      • - Luminaries
      • - Top 25 Diversity Leaders
      • - Leaders to Watch
    • Women in Healthcare
      • - Luminaries
      • - Top 25 Women Leaders
      • - Women to Watch
    • Digital Health Transformation Summit
    • Leadership Symposium
    • Social Determinants of Health Symposium
    • Women Leaders in Healthcare Conference
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Diversity Leaders Gala
    • Top 25 Women Leaders Gala
    • - Hospital of the Future
    • - Value Based Care
    • - Supply Chain
    • - Hospital at Home
    • - Workplace of the Future
    • - Digital Health
    • - Future of Staffing
    • - Hospital of the Future (Fall)
  • Multimedia
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Video Series - The Check Up
    • Sponsored Video Series - One on One
  • Data Center
    • Data Center Home
    • Hospital Financials
    • Staffing & Compensation
    • Quality & Safety
    • Mergers & Acquisitions
    • Data Archive
    • Resource Guide: By the Numbers
    • Surveys
    • Data Points
  • MORE +
    • Contact Us
    • Advertise
    • Media Kit
    • Newsletters
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Hospital Systems
March 11, 2022 02:53 PM

Jury sides with Sutter Health in federal antitrust case

Tara Bannow
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    sutter_i.jpg

    A jury sided with Sutter Health on Friday in the long-running federal lawsuit accusing the health system of anticompetitive business practices that drove up healthcare costs by more than $400 million.

    The unanimous verdict means Sacramento, California-based Sutter has successfully defended against claims that it illegally forced insurers to include all 24 of its hospitals in their contracts, a practice known as tying. The 10-member jury also found Sutter did not force health plans into contracts that prevented them from steering patients to lower-cost, non-Sutter hospitals.

    The class-action case, Sidibe v. Sutter Health, was filed in 2012. Opening arguments in the trial were Feb. 10, and the month-long proceedings included long days packed with witness testimony.

    James Conforti, Sutter's interim CEO, said in a statement Sutter is "extremely pleased" with the verdict.

    "After hearing many hours of testimony from witnesses, insurance plan representatives, provider organizations and experts, the jury found that Sutter Health did not engage in anticompetitive conduct and did not cause consumers to pay higher prices or premiums as plaintiffs alleged," he said.

    The lawsuit and testimony during the trial had detailed the ways Sutter allegedly forced millions of people to overpay for healthcare, both by preventing insurers from lowering their members' out-of-pocket costs and charging higher prices. The class consisted of more than 3 million people who allegedly overpaid by more than $411 million over six years. Sutter faced having to pay up to $1.2 billion under a law that allows courts to triple the damages plaintiffs had sought to deter similar behavior.

    Sutter, a not-for-profit system with $13 billion in annual revenue, had maintained through its attorneys that it faces vigorous competition in its Northern California markets, particularly from Kaiser Permanente, an integrated health system based in Oakland, California. To prove Sutter does not engage in "tying," its attorneys showed insurer contracts that did not feature all of its hospitals, including a 2014 Anthem Blue Cross of California contract that only listed four Sutter hospitals.

    Sutter's Conforti said Friday the jury's decision is important not only for Sutter, but for all healthcare providers in California because it validates their right to choose whether to participate in health plan networks and ensure they don't interfere with the ability to provide coordinated care. The health system's attorneys had argued during the trial that antitrust laws don't require Sutter to agree to every tier or network.

    The case against Sutter relied in part on an antitrust economics expert, Tasneem Chipty, who analyzed 140 million hospital-health plan transactions and determined 97% of the higher costs allegedly caused by Sutter's actions were passed onto premium payers.

    From the trial's start, Sutter had worked to persuade the jury that it does not have market power in Northern California and therefore cannot violate the state's antitrust laws.

    Related Articles
    Sutter Health claims it doesn't have market power, can't violate antitrust laws
    Sutter Health federal antitrust trial starts this week

    One of Sutter's witnesses, Columbia University professor and healthcare economics expert Gautam Gowrisankara, testified that the market in Chipty's model is incorrect because it ignores Kaiser. He said individuals within the class could choose Kaiser, Sutter or different insurance products.

    Glenn Melnick, a public policy professor at the University of California's Sol Price School of Public Policy, disagreed with that argument and said in an interview it's not correct to depict Kaiser, which is both a health plan and provider, as an alternative to other health plan options, like Aetna or Blue Cross and Blue Shield, because it's a separate product market.

    "That's like saying, 'I'm going to have the monopoly on SUVs, and if you don't like my monopoly prices, go get a four-door sedan," he said.

    Download Modern Healthcare’s app to stay informed when industry news breaks.

    Melnick added he thought the information both sides presented during the trial was too technical for a jury.

    "I'm an expert in this area, I know this," he said. "And still, I'm sitting here listening and saying, 'Why are they asking these questions? This is just mind-numbing detail.'"

    Melnick was not involved in the trial, but provided reports for the plaintiff attorneys for this and a similar California case showing that Sutter charged higher prices than its competitors.

    Sutter paid $575 million in 2019 to settle a very similar case in a California court: UFCW & Employers Benefit Trust v. Sutter Health, which then-state Attorney General Xavier Becerra joined in 2018. The main difference is that case was brought by self-insured employers that pay their own claims.

    Experts had predicted the Sidibe case would be more difficult to win because it was brought by employers that bought health insurance for their workers. Prevailing thus requires proving the insurers passed on the higher costs to premium payers.

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    Dr. Joseph Cacchione
    Jefferson Health consolidates organization amid financial challenges
    Cliff's Notes book club
    Health system’s book club opens new chapter on staff engagement
    Most Popular
    1
    More healthcare organizations at risk of credit default, Moody's says
    2
    Centene fills out senior executive team with new president, COO
    3
    SCAN, CareOregon plan to merge into the HealthRight Group
    4
    Blue Cross Blue Shield of Michigan unveils big push that lets physicians take on risk, reap rewards
    5
    Bright Health weighs reverse stock split as delisting looms
    Sponsored Content
    Modern Healthcare A.M. Newsletter: Sign up to receive a comprehensive weekday morning newsletter designed for busy healthcare executives who need the latest and most important healthcare news and analysis.
    Get Newsletters

    Sign up for enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today
    MH Magazine Cover

    MH magazine offers content that sheds light on healthcare leaders’ complex choices and touch points—from strategy, governance, leadership development and finance to operations, clinical care, and marketing.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS

    Our Mission

    Modern Healthcare empowers industry leaders to succeed by providing unbiased reporting of the news, insights, analysis and data.

    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Current News
      • COVID-19
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • Transformation
        • Patients
        • Operations
        • Care Delivery
        • Payment
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Digital Health
    • Insights
      • ACA 10 Years After
      • Best Practices
      • Special Reports
      • Innovations
    • Opinion
      • Bold Moves
      • Breaking Bias
      • Commentaries
      • Letters
      • Vital Signs Blog
      • From the Editor
    • Events & Awards
      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Excellence in Governance
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top 25 Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Supply Chain
        • - Hospital at Home
        • - Workplace of the Future
        • - Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
      • Sponsored Video Series - One on One
    • Data Center
      • Data Center Home
      • Hospital Financials
      • Staffing & Compensation
      • Quality & Safety
      • Mergers & Acquisitions
      • Data Archive
      • Resource Guide: By the Numbers
      • Surveys
      • Data Points
    • MORE +
      • Contact Us
      • Advertise
      • Media Kit
      • Newsletters
      • Jobs
      • People on the Move
      • Reprints & Licensing