SUTTER HEALTH: Adds Summit To Growing Network
Sutter Health last week entered into "exclusive negotiations to add Summit Medical Center to its network," with a deal expected by the end of the year. According to the Sacramento Business Journal, it appears Sutter is "headed for a sweep of the Berkeley-Oakland hospital market" as the 517-bed Summit becomes Sutter's 27th acquisition. Sutter beat out a rival bid by Catholic Healthcare West. "Summit is the next logical step. It'll give Sutter a substantial presence in the East Bay and serve as a counterweight to Catholic Healthcare West and Kaiser," said health care analyst Peter Boland.
Sutter also announced earlier this week that its California Pacific Medical Center " reached an agreement to acquire the 361-bed Davies Medical Center in San Francisco," again beating out a rival bid by Catholic Healthcare. Together these acquisitions could "reduce costs for Sutter as it gains more regional clout," according to Boland. Sutter now has the "power to demand higher rates -- or at least a higher percentage of the premium paid to health plans," he said.
Because the size of the Summit-Sutter merger, the Federal Trade Commission will have to approve the transaction. The Business Journal notes the deal would "align Summit with a former rival, the Alta Bates Medical Center in Berkeley." The deal has also drawn suspicion from the Service Employees International Union which "raised the issue of whether local control -- and commitment -- will vanish when Sutter takes over." The Business Journal reports that Sutter has said it would "honor all union contracts ... continue the charity care provided by Summit ... and conduct an annual community needs assessment of services" to ethnic groups (Robertson, 4/6 issue).