SUTTER HEALTH: Consolidates to Cut Costs
As part of its cost-cutting efforts, Sutter Health has created a new subsidiary -- Sutter Connect -- to oversee its managed care business, the Sacramento Business Journal reports. The change, which will need a limited Knox-Keene license, will allow Sutter to provide HMOs with a single contract, rather than "separate pacts for different units in the 26-hospital Sutter chain." Sutter is also moving its claims processing firm, Managed Care Systems, to the same office as Sutter Connect, allowing the hospital chain to save about $1.5 million annually through greater consolidation of its information technology, claims processing and business support services. Sutter Connect CEO Charles Wirth said, "Currently, health plans work with Sutter Health through a cumbersome a la carte arrangement, which requires multiple contracts and may not include all the services we're capable of providing." But he added, "If you can pull together the business functions of various entities, it becomes a catalyst for further integration." Health care consultant Albert Lowey-Ball said, "In California, Sutter is ahead of the curve" (Robertson/McCarthy, 3/22 issue).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.