Statewide Union Coalition Seeks To Reduce Costs at Sutter Health, Other Hospitals
A statewide coalition of labor unions on Tuesday announced a new campaign to address rising hospital costs, specifically targeting alleged "exceptionally high prices" at Sutter Health, the Sacramento Bee reports (Rapaport, Sacramento Bee, 4/20). The California Health Care Coalition includes the California Teachers Association, the Service Employees International Union and the California School Employees Association.
The coalition said Sutter uses its "increasingly dominant position" in the state to "inflate prices without providing higher-quality services than other hospitals" in California, the Contra Costa Times reports (Silber, Contra Costa Times, 4/20).
Sutter, which owns 31 hospitals in Northern California, came under fire last year when CalPERS dropped coverage at 13 of its facilities because of allegedly inflated prices.
Sally Covington, director of the coalition and of the California Works Foundation, said, "High health costs do not necessarily mean high-quality medical care. Quality is inconsistent in hospital facilities across the state. Like CalPERS, we believe purchasers of health insurance must work together to hold hospitals accountable for the quality and cost of care" (Sacramento Bee, 4/20).
She added, "There is extreme disjunction between the quality and prices provided by Sutter. This is a particularly bad bargain for employees and their families" (Contra Costa Times, 4/20).
A report released on Tuesday by the coalition found that Sutter prices were as much as 60% to 80% higher than competitors in local markets (Sacramento Bee, 4/20).
The report "specifically singles out" Alta Bates Summit Medical Center in Berkeley for high prices and uneven quality, according to the Times.
An analysis of Blue Cross of California data from coalition members found that Alta Bates charged nearly 200% more than a facility in the same or nearby ZIP code. A separate analysis of state hospital discharges found that Alta Bates charged more for the 10 most common and 10 most costly procedures than other hospitals. However, Alta Bates had 8% fewer complications than the other hospitals.
The coalition's report also criticized Alta Bates for receiving preliminary denial of accreditation by the Joint Commission on Accreditation of Healthcare Organizations in February. According to a hospital spokesperson, that decision was largely the result of paperwork problems resulting from a 1999 merger. She added that the hospital already has addressed four of the six problems cited in the report and expects to receive clearance on the remaining two next month.
Covington said the coalition's goal is to apply enough pressure that its efforts -- combined with CalPERS' action -- will force Sutter and other hospitals with high prices to reduce costs and improve quality of care.
CalPERS spokesperson Clark McKinley said the organization and CHCC have no formal partnership.
Covington also said that possibly as early as next year CHCC will ask hospitals for performance data in areas such as mortality, infection and complication rates. Facilities that do not meet the coalition's cost and quality standards could be eliminated from the union and employers' health plan networks (Contra Costa Times, 4/20).
The coalition, whose members purchase health insurance for a total of 750,000 state residents, also hopes to gain more leverage in negotiations over prices between insurers and hospitals. Currently, the coalition has an "agreement in principle" with Blue Cross that would allow CHCC to be involved in negotiations with hospitals.
Blue Cross spokesperson Michael Chee said that the two groups have been in talks, but "there is not definitive agreement of any kind."
Covington said that if the talks with Blue Cross fall through, the coalition might open discussions with Blue Shield of California (Sacramento Bee, 4/20).
Sutter spokesperson Bill Gleeson said, "Sutter Health is committed to providing the highest quality health care at a fair price." He added that the chain is holding hospital rate increases to the single digits while also maintaining generally constant reimbursements rates to insurers and working to make costs more predictable by changing the way it bills insurers (Contra Costa Times, 4/20).
Gleeson called CHCC's report a "factually inaccurate hit piece," adding, "The unions are doing everything they can to force Sutter into labor agreements under the guise of discussing hospital costs." He noted that Sutter has ongoing labor disputes at eight hospitals and has several hospitals that are not unionized.
Covington said the coalition's report is unrelated to Sutter's union disputes (Sacramento Bee, 4/20).