A federal jury on Friday rejected allegations that a large Northern California health system abused its market power to drive up costs for consumers and businesses.
The verdict followed a monthlong civil trial in a class-action lawsuit against Sutter Health on behalf of more than 3 million employers and people served by the Sacramento-based nonprofit system.The plaintiffs argued unsuccessfully that the company caused nearly $400 million in insurance premium overcharges between 2011-2017 and sought triple damages, as much as $1.2 billion.
Sutter Health Interim President and CEO James Conforti said the verdict is important for all healthcare providers in California. In the current lawsuit, the plaintiffs said Sutter used its dominance in seven mostly rural Northern California areas to lock in insurers in four other communities where it has more competition.
They also rejected allegations that Sutter forced the health plans to agree to contracts that prevented the plans from steering patients to lower-cost non-Sutter hospitals. Two years ago, Sutter paid different plaintiffs $575 million to settle similar claims that that the company artificially increased patients’ costs through anti-competitive practices. It also agreed through a separate settlement with the state to accept a court-approved monitor for 10 years to make sure it no longer works through insurance companies to increase patients’ costs.
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