Sutter Health defeats $411 million class action lawsuit
A $411 million class action lawsuit against Sutter Health has been dismissed in a jury trial, giving the not-for-profit California health system a major win.
The plaintiffs in the case, which included individuals and small companies, alleged Sutter Health overcharged them for medical services in Northern California and engaged in anti-competitive practices. The case, Sidibe v Sutter Health, hinged on the healthcare giant using its market dominance to yield pricing terms on payors, including Aetna, Anthem Blue Cross Blue Shield of California, Health Net and UnitedHealthcare.
However, the jury disagreed, ruling that Sutter Health did not act in anti-competitive ways, such as steering healthcare plans to Sutter hospitals with higher costs. The jury unanimously sided with Sutter Health.
“We are extremely pleased with today’s unanimous verdict in Sutter Health’s favor,” James Conforti, interim president and CEO of Sutter Health, said in a statement. “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. In particular, the jury’s decision reached the substance of the claims, finding squarely that Sutter Health did not tie together its hospital services, did not force insurance companies to agree to contracts that prevented insurance companies from introducing networks, and did not restrain competition.”
The lawsuit, which was first filed in 2012, ends at a time when healthcare mergers and acquisitions have been increasingly scrutinized. The consolidation of health systems and hospitals has led to some speculation about healthcare prices and anti-competitive concerns. In addition, some research reveals consolidation leading to market dominance does lead to higher prices. Some lawmakers and watchdog groups have proposed stronger antitrust examination of large health systems, while a new price transparency rule for hospitals intends to bring down care prices.
However, Sutter Health stated the ruling underscores the importance of health systems’ ability to provide continuity of care for patients.
“This decision is important not only for Sutter Health, but for all healthcare providers in California,” Conforti said. “It validates that healthcare providers, including doctors and hospitals, have a right to evaluate whether to participate in health plan networks and ensure that they don’t interfere with the ability to provide coordinated patient care and will not lead to surprise bills. Sutter Health looks forward to continuing to care for the more than 3 million patients it serves in Northern California.”
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Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."