Dive Brief:
- A union trust fund representing grocery store employees has filed a suit against Sacramento-based Sutter Health, claiming that the health system has violated antitrust laws and driven hospital costs up for at least 10 years.
- The fund behind suit, UFCW & Employers Benefit Trust, is seeking class action status. In the suit, the Trust claims that Sutter's alleged anticompetitive actions go back to 2002, "leading to inflated prices that far exceed the prices its hospitals could charge in a free, competitive market," the report said.
- In particular, the trust said, Sutter offers "all-or-nothing terms" which force health plans to include all Sutter hospitals in their networks instead of picking those with the best rates and highest quality.
Dive Insight:
Few forces in health care are more powerful than a tightly-knit health system determined to have its way in a market it "owns." If Sutter has indeed engaged in the alleged behavior, it's easy to see how such actions could push prices up in its marketplace. By the way, this suit follows the announcement, last October, that it was being investigated by the US Department of Justice for contract provisions that allegedly violate antitrust laws. Of course we don't know what the truth is, but where there's smoke the may indeed be fire.