California’s attorney general is suing a major hospital network for jacking up healthcare prices in the northern part of the state.
Attorney General Xavier Becerra announced the lawsuit against Sutter Health on Friday, a northern California nonprofit network that includes doctors’ offices, surgery centers, and acute care hospitals.
“The consolidated market in northern California has driven up prices for consumers,” Becerra said.
The cost of an average inpatient procedure in northern California is $223,000 or more, compared to $131,000 or more in southern California, he said.
“That is more than a $90,000 difference on where you live for the hospital procedures,” Becerra said.
The lawsuit charges that Sutter Health violated state laws that clamp down on anti-competitive business practices.
Sutter Health, whose network includes 24 hospitals, responded that it is aware of the lawsuit but hasn’t seen it so “we cannot comment on specific claims.”
The network said it has “held average overall rate increases to health plans to the low single digits since 2012 in spite of our actual expenses for labor, facilities and technology increasing more than 37 percent during the same time period. We don’t know why some health plans have increased their rates to consumers as much as 20 percent annually.”
Becerra’s lawsuit comes as the healthcare system is becoming more consolidated.
Megadeals such as the merger of pharmacy retail chain CVS and insurer Aetna have patient advocates worried that greater consolidation will lead to higher prices. Major retailers like Wal-Mart and Amazon are also reportedly stepping up their healthcare presence.
