Imaging costs highlighted in probe of California’s Sutter Health

August 20, 2010

Imaging costs were front and center in an investigative review of Sutter Health pricing practices conducted by Bloomberg News.

Imaging costs were front and center in an investigative review of Sutter Health pricing practices conducted by Bloomberg News.

The review, published online Aug. 19, explored how the nonprofit Sutter Healthcare system had become a dominant player in the markets it serves and, as a consequence, had the power to set prices that were often much higher than those charged by competitors.

Imaging costs were among the examples:

  • Sutter charged $1271 for an MRI to check for a torn knee ligament. The same MRI at one of the local imaging centers owned by Radiological Associates of Sacramento would have cost $696-45% less-the article reported.

  • In San Francisco, Aetna pays Sutter’s California Pacific Medical Center in a range with a midpoint of $4700 for an abdominal CT scan, compared with $3200 at St. Francis Memorial Hospital, which is owned by Catholic Health Care West, the article said. For colonoscopies, Aetna’s midpoint price is $3200 at Sutter’s flagship CPMC and $2800 at St. Francis Memorial.

  • Sutter’s Novato Community Hospital north of San Francisco charged $319 for an emergency room x-ray for a child’s suspected fractured clavicle. The same scan would have cost $85 at Radnet’s imaging center in nearby Santa Rosa, the article said.

The article quoted insurance executives for Aetna, Health Net, and Blue Shield of California as saying Sutter can charge higher prices because it has acquired more than a third of the market in the San Francisco-to-Sacramento region through more than 20 hospital takeovers. The executives asked not to be named because their agreements with Sutter ban disclosure of prices, the article said.

Sutter’s chief executive officer Patrick Fry defended the network, saying Sutter Health doesn’t have market power, given the choices that employers can make.

Federal investigators in five states-Connecticut, Massachusetts, Ohio, Pennsylvania, and New Hampshire-are probing proposed hospital takeovers or contracting practices for evidence of antitrust problems, Bloomberg reported. A Sutter spokesman said it knows of no federal or state antitrust investigations into its conduct.