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Thursday, March 10, 2011

Sutter's Consolidation Forces Higher Rates In Bay Area

NORCAL PATIENTS PAY FAR MORE THAN THOSE IN SOCAL ATTRIBUTED TO SUTTER'S DOMINANCE
San Leandro residents are well aware of the threat to their health and pocket book as hospitals like Sutter Health move to consolidate their presence in the Bay Area and Northern California, in general. In many ways Sutter’s attempt to close San Leandro Hospital, local critics have long said, is part of a greater goal by the Sacramento-based health care provider to control pricing and remove competition from the region.

The Los Angeles Times reports there is more than anecdotal evidence that shows patients in Sutter-dominated Northern California pay far more for health care than those in the southern half of the state.

According to the report, those in the north pay $5,169 per day for health care as opposed to just $3,578 in the south. Why? Supply and demand. One in five hospitals in the north is operated by Sutter, allowing for far more control over its ability to charge higher rates.

Critics in the East Bay say the wish by Sutter to consolidate its services in San Leandro and Castro Valley is part of their plan to wring more money out of the new Castro Valley Medical Center currently under construction. Three years ago, Sutter was able to work a deal with the Eden Township Healthcare District, in essence, trading the reconstruction of Eden in Castro Valley for the demise of nearby San Leandro Hospital. Sutter operates both facilities.
The legality of the 2008 agreement is currently being contested in the courts by the healthcare district, while San Leandro Hospital continues to operate. Despite overtures by the CEO of nearby St. Rose Hospital in Hayward to operate San Leandro Hospital, it is believed Sutter will wait it out until the courts decide the facilities fate. But, if this report shows anything, it gives a glimpse of Sutter’s overreaching position that having less competition is more favorable to its bottom line.
-STEVEN TAVARES

13 comments :

I urge everyone to carefully read the entire LA Times article. It reports that Sutter has one fifth (20%) of the beds in NC. Sutter plus Catholic Healthcare West (CHW) control one third (33%). At the same time the Kaiser system that is believed to control over 40% of the market is expressly excluded from the study.

The article also reports that the lack of consolidation into systems in SC has resulted in many of the independent hospitals having less bargaining power vs insurance companies and thus suffering financial difficulties. They will be forced to join a system or perish. Many hospitals in California have already closed in the last 20 years.

Finally, the largest cost by far of operating a hospital is labor. The article sites salaries in NC as 47% higher than in SC. Computing the difference in charges between NC and SC shows that NC is 44% higher than SC.

A superficial reading of the article leads to oversimplification and finger pointing instead of an in depth understanding of the issues. Does 20% of the market really constitute a monopoly sufficient to control prices while the insurance companies are pushing back to reduce what they have to pay for services?

Old news the SF Chronicle did this months ago. They are a non-profit. Non-profits don't pay taxes. We subsidize them with our taxes.

That's the problem. Let them become a for profit and pay their fair share of taxes.

A subsidy would be a payment we make to them. Such is not the case. Our taxes do not support them. They are self sustaining from the revenue they draw from their operations. It is only income taxes they don't pay. They do pay local and sales taxes. If you increase their costs by adding more taxes, they will pass these costs on to the consumer, just as any other business would do, and then the cost of healthcare will go up more.

Why does Dr. Rico defend Sutter in such a kneejerk manner? "It is only income taxes they don't pay." Don't we all wish we could feed at the money trough and say the same? No, actually, many of us see paying our fair share in taxes as our civic responsibility.

You see, Sutter doesn't do "as any other business would do." Let's have a more "in depth understanding of the issues":

Sacramento Bee: "Many Capital CEO's got 2009 pay hikes":

"...Sutter Health, one of the nation's largest health care systems, paid 14 of its executives $1 million or more in total compensation in 2009, according to Sutter's tax filings with the IRS.

CEO Patrick Fry was the region's highest-paid CEO with a compensation package valued at $3.99 million, a 41.3 percent increase from the year-earlier period.

Sutter officials cautioned that $1.7 million of Fry's pay came in the form of deferred compensation.

The deferred pay would be paid at a later date if the company hits future performance targets, said Andy Pansini, chairman of Sutter's board.

For 2009, the nonprofit company reported that its total (net) income rose more than 270 percent to $697 million."


The Fiscal Times: "Prices Rising Rapidly, But Quality Varies":

"...Sutter Health is California’s priciest large hospital system. An average day’s worth of care cost 37 percent more than the state average, even more than the University of California hospitals, which see more of the sickest patients. Catholic Healthcare West, another nonprofit chain that is one of Sutter’s main competitors in many Northern California markets, was paid 4 percent below the state average.

A few employers are trying to stop the upward march of hospital prices. CalPERS, the state pension fund, estimates it has saved $252 million over five years by kicking some of the costliest hospitals and doctors — including some of Sutter’s — out of several of its HMO networks in 2005. The savings amounted to about 3.1 percent of premiums, CalPERS says.

....Les Schlaegel, Stanford University’s associate vice president for benefits.....says so many employees like to see doctors at the Palo Alto Medical Foundation, a doctors’ organization affiliated with Sutter with a clinic right across the Stanford campus, that the university feels obliged to keep offering insurance networks that include Sutter.

"Sutter basically has a stranglehold on Northern California," says Schlaegel. "They are strategically situated, both for hospitals and medical groups. They know purchasers need them. When you are strategically located, you can say ‘this is our price and you can pay it.'"

Why does Dr. Rico defend Sutter in such a kneejerk manner? "It is only income taxes they don't pay." Wouldn't we all like to say the same while feeding at the money trough at the same time? No, actually, many of us see paying our fair share in taxes as a civic responsibility, along with being generous with our fellows.

You see, Sutter doesn't do "just as any other business would." Let's gain "an in depth understanding of the issues":

Sacramento Bee, "Many Capital CEO's got 2009 pay hikes":

"...Sutter Health, one of the nation's largest health care systems, paid 14 of its executives $1 million or more in total compensation in 2009, according to Sutter's tax filings with the IRS.

CEO Patrick Fry was the region's highest-paid CEO with a compensation package valued at $3.99 million, a 41.3 percent increase from the year-earlier period.

Sutter officials cautioned that $1.7 million of Fry's pay came in the form of deferred compensation.

The deferred pay would be paid at a later date if the company hits future performance targets, said Andy Pansini, chairman of Sutter's board.

For 2009, the nonprofit company reported that its total income rose more than 270 percent to $697 million."

The Fiscal Times, "California Hospitals: Prices Rising Rapidly, But Quality Varies":

"...Sutter Health is California’s priciest large hospital system. An average day’s worth of care cost 37 percent more than the state average, even more than the University of California hospitals, which see more of the sickest patients. Catholic Healthcare West, another nonprofit chain that is one of Sutter’s main competitors in many Northern California markets, was paid 4 percent below the state average.

...Les Schlaegel, Stanford University’s associate vice president for benefits...says so many employees like to see doctors at the Palo Alto Medical Foundation, a doctors’ organization affiliated with Sutter with a clinic right across the Stanford campus, that the university feels obliged to keep offering insurance networks that include Sutter.

"Sutter basically has a stranglehold on Northern California," says Schlaegel. "They are strategically situated, both for hospitals and medical groups. They know purchasers need them. When you are strategically located, you can say ‘this is our price and you can pay it.'"

"It is only income taxes they don't pay." Wouldn't we all like that status while feeding at the money trough? Actually, no; many of us see paying our fair share of taxes as our public responsibility, along with treating our fellows with generosity and compassion.

Sutter doesn't behave "as any other business would". Let's gain "an in depth understanding of the issues".

Sacramento Bee, "Many capital CEO's got 2009 pay hikes":

"...Sutter Health, one of the nation's largest health care systems, paid 14 of its executives $1 million or more in total compensation in 2009, according to Sutter's tax filings with the IRS.

CEO Patrick Fry was the region's highest-paid CEO with a compensation package valued at $3.99 million, a 41.3 percent increase from the year-earlier period.

Sutter officials cautioned that $1.7 million of Fry's pay came in the form of deferred compensation. The deferred pay would be paid at a later date if the company hits future performance targets, said Andy Pansini, chairman of Sutter's board.

For 2009, the nonprofit company reported that its total income rose more than 270 percent to $697 million."


The Fiscal Times, "California Hospitals: Prices Rising Rapidly, But Quality Varies":

"...Sutter Health is California’s priciest large hospital system. An average day’s worth of care cost 37 percent more than the state average, even more than the University of California hospitals, which see more of the sickest patients. Catholic Healthcare West, another nonprofit chain that is one of Sutter’s main competitors in many Northern California markets, was paid 4 percent below the state average.

...Les Schlaegel, Stanford University’s associate vice president for benefits...says so many employees like to see doctors at the Palo Alto Medical Foundation, a doctors’ organization affiliated with Sutter with a clinic right across the Stanford campus, that the university feels obliged to keep offering insurance networks that include Sutter.

"Sutter basically has a stranglehold on Northern California," says Schlaegel. "They are strategically situated, both for hospitals and medical groups. They know purchasers need them. When you are strategically located, you can say ‘this is our price and you can pay it.'"

"It is only income taxes they don't pay." Wouldn't we all like that status while feeding at the money trough? Actually, no; many of us see paying our fair share of taxes as our public responsibility, along with treating our fellows with generosity and compassion.

Sutter doesn't behave "as any other business would". Let's gain "an in depth understanding of the issues".

Sacramento Bee, "Many capital CEO's got 2009 pay hikes":

"...Sutter Health, one of the nation's largest health care systems, paid 14 of its executives $1 million or more in total compensation in 2009, according to Sutter's tax filings with the IRS.

CEO Patrick Fry was the region's highest-paid CEO with a compensation package valued at $3.99 million, a 41.3 percent increase from the year-earlier period.

Sutter officials cautioned that $1.7 million of Fry's pay came in the form of deferred compensation. The deferred pay would be paid at a later date if the company hits future performance targets, said Andy Pansini, chairman of Sutter's board.

For 2009, the nonprofit company reported that its total income rose more than 270 percent to $697 million."


The Fiscal Times, "California Hospitals: Prices Rising Rapidly, But Quality Varies":

"...Sutter Health is California’s priciest large hospital system. An average day’s worth of care cost 37 percent more than the state average, even more than the University of California hospitals, which see more of the sickest patients. Catholic Healthcare West, another nonprofit chain that is one of Sutter’s main competitors in many Northern California markets, was paid 4 percent below the state average.

...Les Schlaegel, Stanford University’s associate vice president for benefits...says so many employees like to see doctors at the Palo Alto Medical Foundation, a doctors’ organization affiliated with Sutter with a clinic right across the Stanford campus, that the university feels obliged to keep offering insurance networks that include Sutter.

"Sutter basically has a stranglehold on Northern California," says Schlaegel. "They are strategically situated, both for hospitals and medical groups. They know purchasers need them. When you are strategically located, you can say ‘this is our price and you can pay it.'"

"It is only income taxes they don't pay." Wouldn't we all like that status while feeding at the money trough? Actually, no; many of us see paying our fair share of taxes as our civic duty, along with treating our fellows with generosity and compassion.

Sutter doesn't behave "as any other business would". Let's gain "an in depth understanding of the issues".

Sacramento Bee, "Many capital CEO's got 2009 pay hikes":

"...Sutter Health, one of the nation's largest health care systems, paid 14 of its executives $1 million or more in total compensation in 2009, according to Sutter's tax filings with the IRS.

CEO Patrick Fry was the region's highest-paid CEO with a compensation package valued at $3.99 million, a 41.3 percent increase from the year-earlier period.

Sutter officials cautioned that $1.7 million of Fry's pay came in the form of deferred compensation. The deferred pay would be paid at a later date if the company hits future performance targets, said Andy Pansini, chairman of Sutter's board.

For 2009, the nonprofit company reported that its total income rose more than 270 percent to $697 million."


The Fiscal Times, "California Hospitals: Prices Rising Rapidly, But Quality Varies":

"...Sutter Health is California’s priciest large hospital system. An average day’s worth of care cost 37 percent more than the state average, even more than the University of California hospitals, which see more of the sickest patients. Catholic Healthcare West, another nonprofit chain that is one of Sutter’s main competitors in many Northern California markets, was paid 4 percent below the state average.

...Les Schlaegel, Stanford University’s associate vice president for benefits...says so many employees like to see doctors at the Palo Alto Medical Foundation, a doctors’ organization affiliated with Sutter with a clinic right across the Stanford campus, that the university feels obliged to keep offering insurance networks that include Sutter.

"Sutter basically has a stranglehold on Northern California," says Schlaegel. "They are strategically situated, both for hospitals and medical groups. They know purchasers need them. When you are strategically located, you can say ‘this is our price and you can pay it.'"

"It is only income taxes they don't pay." Wouldn't we all like that status while feeding at the money trough? Actually, no; many of us see paying our fair share of taxrs as our civic duty, along with treating our fellows with generosity and compassion.

Sutter doesn't behave "as any other business would". Let's gain "an in depth understanding of the issues.

Sacramento Bee, "Many Capital CEO's got 2009 pay hikes":

"...Sutter Health, one of the nation's largest health care systems, paid 14 of its executives $1 million or more in total compensation in 2009, according to Sutter's tax filings with the IRS.

CEO Patrick Fry was the region's highest-paid SEO with a compensation packeage valued at 3.99 million, a 41.3 percent increase from the year-earlier period.

...For 2009, the nonprofit company reported that its total (net) income rose more than 270 percent to $697 million".

The Fiscal Times, "California Hospitals: Prices Rising Rapidly, But Quality Varies":

"...Sutter Health is Caifornia's priciest large hospital system. An average day's worth of care cost 37 percent more than the state average, even more than the University of California hospitals, which see more of the sickest patients. Catholic Healthcare West, another nonprofit chain that is one of Sutter's main competitors in many Northern California markets, was paid 4 percent below the state average.

...Les Schlagel, Stanford University's associate vice president for benefits...says..."Sutter basically has a stranglehold on Northern California"..."They are strategically situated, both for hospitals and medical groups. They know purchasers need them. When you are strategically located, you can say 'this is our price and you can pay it'."

The government takes in revenues, when non profits pay less of those revenues like on property taxes, income taxes then we have to make that up, we pay more. Frank have you looked at your income and property taxes lately.

Sutter made in excess of $600 million, where is it?

Stop carrying Sutter's water, Frank.

It's time for an attorney general investigation of sutter's non-profit status.

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