San Francisco Supervisors Raise Questions About Hospital Costs

On Thursday, the San Francisco Board of Supervisors held a hearing to examine hospital costs and consolidation in the city, the San Francisco Chronicle reports.

Supervisors invited health care experts to speak about hospitals costs and the dramatic price differences between Northern and Southern California hospitals. A recent Los Angeles Times analysis found that hospital costs in San Francisco are as much as 70% more per patient daily than in Los Angeles.

Hospital Consolidation

Experts say the regional price differences stem from a hospital consolidation trend that started in the 1990s.

Ellen Shaffer -- director of the Center for Policy Analysis, a San Francisco-based health research group -- said that in 1994, three large hospital networks controlled 18% of San Francisco's hospital beds. Four years later, the three systems controlled 43% of hospital beds in the city, Shaffer said.

According to a presentation by the Pacific Business Group on Health, San Francisco's hospital industry currently is dominated by:

• Sutter Health, which controls 44% of San Francisco's hospital beds;
• Catholic Healthcare West, which controls 28% of the city's hospital beds; and
• UC-San Francisco, which controls 26%.

Hospitals Respond

Ann McLeod, senior vice president of the California Hospital Association, said higher labor costs in the San Francisco Bay Area drive up hospital expenses.

Bill Gleeson, spokesperson for Sutter Health, said hospital competition in Northern California remains strong. Gleeson added that Sutter is taking steps to reduce costs in anticipation of lower Medicare reimbursement rates stemming from the federal health reform law (Colliver, San Francisco Chronicle, 4/29).