San Francisco Chronicle Profiles Sutter Health

The San Francisco Chronicle on Tuesday examined Sutter Health and how it is viewed as "either a schoolyard bully that uses its market muscle to gouge patients and push around its workers or a tough and efficient operator that has restored ailing hospitals to financial health." According to the Chronicle, Sutter has been the target of a "barrage of criticism" from labor unions representing hospital workers, CalPERS and patient advocates.

Sutter is expected to change its policies on pricing in the Sacramento and Modesto regions. The formula would more closely base list prices on rates paid by health plans.

Sutter's strategic plan seeks to shift from a "reliance on traditional hospitals to more use of lower-overhead clinics," the Chronicle reports. The company says it does not plan to add to its hospital network in the region.

Sutter met its targeted operating margin of 5% -- "well above industry averages" -- in 2004, and company officials say Sutter "has nothing to apologize for," the Chronicle reports.

However, Peter Boland of Berkeley-based consulting firm Boland Healthcare said, "It's offensive to many people that a not-for-profit health care system, particularly a hospital, can be unusually profitable." He added, "There's a mentality that says hospitals should just barely get by."

Glenn Melnick, a RAND researcher and professor at the University of Southern California, said, "Different groups hate them for different reasons, some of which may be legitimate and some may not be," adding, "But it comes down to the fact they are able to use their market share to get higher rates -- or at least that's the perception -- from managed-care plans."

Gordon Hunt, Sutter's chief medical officer, said, "I don't see Sutter as polarizing. I see us as being willing to take positions. And when you take positions, you're going to have some people who like you and some people who don't" (Colliver, San Francisco Chronicle, 5/31).