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Resolution Calling for the Rejection of Anti-Competitive Practices of Sutter Health

WHEREAS California has seen a surge in provider consolidation under Sutter Health, who has acquired competitors, outpatient facilities, and physician practices under the promise of lower cost and efficiency, but instead consumers have experienced prices at Sutter Health increasing 43 percent faster than at other hospitals because of their market power, costing on average $4,000 more per admission to seek the same services than at all other California hospitals

WHEREAS Sutter Health has used their market power to become even more dominant and prevent consumers from challenging their impacts through “All or nothing” clauses requiring payers to take all hospitals in a system or none, frequently by requiring payers to pay significantly more than the law provides to those hospitals that are excluded—making it impossible to provide an adequate network for consumers without agreeing to Sutter Health’s excessive rates where lower cost competitors may exist

WHEREAS by tying hospitals together, dominant providers like Sutter Health are able to achieve market power over prices beyond any local market advantages, and then use “gag clauses” to prevent employer groups from sharing pricing data that could encourage more cost-effective care for their employees

THEREFORE BE IT RESOLVED the San Diego County Democratic Party supports reforms on behalf of consumers and health care providers to remedy the unfair exercise of Sutter Health market power which has resulted in reduced competition, increased prices, and less affordable access to coverage and premiums for health insurance are about 25% higher in Northern California, on average, than in the southern part of the state

AND FURTHER BE IT RESOLVED that the San Diego County Democratic Party supports reforms that would prohibit any contract between a hospital and a health care service plan from engaging in anti-competitive practices by setting payment rates or other terms for affiliates of the hospitals not included in the agreement, requiring the health plan to contract with all affiliates of the hospital, forcing employers to attest that they are bound by the terms of the contract between the hospital and the health plan, mandating that a health care service plan submit to binding arbitration for antitrust claims as a condition of contracting, or requiring that the health plan provide coverage to its enrollees at the same level of copayment, coinsurance or deductible at affiliated hospitals