August 30, 2021

On Friday, California Attorney General Rob Bonta lauded Judge Anne-Christine Massullo’s final approval of a landmark $575 million settlement with Sutter Health.

The settlement agreement was reached in 2019, and resolves allegations by the Attorney General’s Office, the United Food and Commercial Workers and Employers Benefit Trust and class action plaintiffs that Sutter’s anticompetitive practices led to higher health care costs for consumers in Northern California compared to other places in the state.

The settlement requires Sutter to pay $575 million in compensation, prohibits anticompetitive conduct, and requires Sutter to follow certain practices to restore competition in California’s health care markets.

“This is a groundbreaking settlement and a win for Californians,” said Bonta. “Sutter will no longer have free rein to engage in anticompetitive practices that force patients to pay more for health services. Under the terms of our agreement, Sutter’s transparency must increase, and practices that decrease the accessibility and affordability of health care must end. A competitive health care market is essential to ensuring patients and families aren’t bearing the brunt of health care costs while one company dominates the market.”

Sutter Health said in a previous statement that the settlement’s final approval would “ultimately help preserve our integrated network of care and is in the best interests of our patients and the communities we serve.”

Sutter is the largest hospital system in Northern California. The Sutter network consists of some 24 acute care hospitals — including Sutter Lakeside in Lakeport — along with 36 ambulatory surgery centers, and 16 cardiac and cancer centers. It also includes some 12,000 physicians and over 53,000 employees. In addition, Sutter negotiates contracts on behalf of the Palo Alto Medical Foundation and many affiliated physician groups.

This settlement is the result of litigation that began in 2014 when UEBT filed a class-action lawsuit that challenged Sutter’s practices in rendering services and setting prices. They sought compensation for and an end to what they alleged were unlawful, anticompetitive business practices, which caused them to pay more than necessary for health care services and products.

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