October 2019 Volume 21 Issue 10
Providing Current Information on

Health Insurance Industry Issues and Legislation

Sutter Suit Has National Implications
Self-funded employers and union trusts in California have sued Sutter Health claim
the hospital giant ($13 Million in operating income in 2018) for violating antitrust laws
by leveraging its market power to drive out competition and overcharge patients.
The case, originally brought in 2014, had been joined with a similar suit brought by
California's Attorney General last year. According to the suit, Sutter has exploited
its marketing clout by employing an "all-or-none" strategy when contracting with
insurance companies. The outcome could have a major impact on large hospital
systems using similar negotiating tactics and on healthcare prices nationwide.
Why Healthcare is So Expensive and What to do About it?
Dr. Marty Makary, M.D. of Johns Hopkins tackles that question in his new book, The
Price We Pay: What Broke American Healthcare-and How to Fix it. One of his major
conclusions is that price gouging and predatory billing practices by hospitals is one
of the major charges His research team found bills marked up as much as 23 times
the amount the hospitals accept from Medicare for the same services. Based on his
research, hospitals are on target for their highest profit margin in history in 2019.
He says Wall Street and healthcare companies are part of the problem, too. As an
example he cites United Healthcare recently reporting its earnings increased 25%.
The book not only addresses the causes of the problem, but offers a wide range of
potential solutions.
Controlling the Medical Spend
Indeed, many providers submit bills that are too high, sometimes outrageously
high. We know, because for the last 25 years we've been successfully negotiating
with providers nationwide. We know who the decision makers are and how to get to
them, what to say to them and how to say it so they accept our proposals and send
us signed agreements to seal the deal. Importantly, we do it in a way that enables us
to come back to the providers again and again to get them to negotiate with us and
accept the appropriate amounts we offer for the services they provide.
Value Based Care Report Card
In 2018, Medicare achieved its goal of making 90% of payments to hospitals and
physicians based on a measure of quality. However, whether value-based pricing has
achieved its cost savings, quality of care and patient satisfaction objectives is still in doubt.
Initial analyses suggested the program reduced hospital admissions saving Medicare
billions of dollars. However, more recent studies have found these reports overstated the
benefits of value-based pricing, with readmissions being reduced by less than 1% while
possibly being associated with an increased risk of death. Two other approaches, "bundled
payments" and "accountable care organizations" are proving to be better options for
reducing costs while maintaining quality of care and patient satisfaction.
Three Star Preferred Provider Program Additions
MEI Chiropractic PC
Chicago, IL 60616

MVES Boardman
Cleveland, OH 44194

Michael D. Chidester, M.D., P.A.
Palm Beach Gardens, FL 15987

Boca Raton Center for Oral, Facial &
Implant Surgery, LLC
Boca Raton, FL 33431

Cleveland Eye and Laser Surgery Center
Fairview, OH 44126

Michigan Counseling Group LLC
Elkhart, IN 46516

Stacy Renee Fuller, DC
Merrillville, IN 46410