Sutter Health’s revenues and costs continue to be scrutinized in a federal trial over whether Northern California’s largest hospital system imposed anticompetitive contracts on health insurers, reported Courthouse News.
Sutter executives took the stand Friday to defend Sutter’s practices and their so-called pro-competitive benefits, touting the hospital system’s quality and efficiency.
Sarah Krevans, who recently retired as CEO, said Sutter tried to reduce costs and curb rising prices for inpatient hospital services by consolidating non-patient care services throughout its system; for example, processing payroll and paying vendors from one location rather than at each individual hospital.
By 2011, she said, the hospital system had saved $340 million, making significant progress toward its goal of cutting costs by $700 million.
“We were able to take advantage of modern technology that you wouldn’t be able to do at individual locations,” she said. “That effort alone saved several hundred million dollars.”
She also said Sutter was under tremendous financial pressure as more Californians joined the Medi-Cal rolls after the passage of the Affordable Care Act.
“We serve a disproportionate share of people from disadvantaged backgrounds. Every year we serve more patients who are governmental patients than people who are commercial patients,” she said, referring to Medicare and Medi-Cal, California’s version of the federal Medicaid program that pays a portion of healthcare services for low-income adults and children.
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