A Sutter Health Network hospital in San Francisco.
Sutter Health has agreed to pay $228.5 million to settle a federal class-action lawsuit accusing it of driving up costs through anticompetitive behavior. The agreement in principle, which a judge still must approve, was announced on Friday, shortly before the case was set to go to trial.
“The settlement resolves strongly disputed claims involving alleged conduct spanning from the late 1990s to 2020,” according to a joint statement from the parties. “These claims were brought by plaintiffs on behalf of themselves and a certified class who paid premiums for fully insured health insurance policies from five insurance companies. The parties agree this settlement is what’s best for the parties, for patients and for the class, and the prospect of additional litigation is not in anyone’s interest. There is no admission of liability, and the settlement is subject to court approval.”
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Sidibe v. Sutter Health, initially filed in 2012, accused Sutter of attempting to accumulate monopoly power in northern California through all-or-nothing contracts, requiring insurers to include all of its hospitals and physician groups in health plans.
If the U.S. District Court for the Northern District of California approves the proposed settlement, funds will be disbursed to approximately three million entities. These include employers and individual who purchased health policies from Anthem Blue Cross, Blue Shield of California, Health Net, UnitedHealthcare and Aetna during the first three months of 2021. Companies represented in the lawsuit include both small businesses and large employers such as the University of California and the city and county of San Francisco.
“We are pleased that we have been able to secure relief for the class that is fair, adequate and reasonable,” said Matt Cantor, lead attorney for the plaintiffs. A spokesperson for Sutter Health said it was pleased to resolve the lawsuit, describing Northern California as a “highly competitive market.”
Sutter Health, based in Sacramento, has 53,000 employees and operates 24 acute-care hospitals and more than 200 clinics in Northern California.
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Alan Goforth
Alan Goforth is a freelance writer in suburban Kansas City. In addition to freelancing for several publications, he has written a dozen books about sports and other topics.
