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Health care patient advocates have filed two class action lawsuits in Bay Area state courts against hospital conglomerate Sutter Health, asking the court to halt what they call the corporation’s “price-gouging” of uninsured patients and return “unfair” profits back to the public. 

The lawsuits were announced this week at a sidewalk press conference by a small group of attorneys, health advocates, and patients held in front of Summit Hospital in Oakland. The press conference was videotaped by two plainclothes Summit security guards standing across the street. The guards said they had “no comment” when asked why they were videotaping the press conference. 

Sutter Health is a not-for-profit health care system which serves as the umbrella organization for 26 hospitals in Northern California—including the Alta Bates Summit Medical Center in Oakland and Berkeley—and one hospital in Hawaii. The network also has a number of affiliated clinics, health care organizations, and physician medical foundations. 

Bill Gleason, a spokesperson for Sutter Health in Sacramento, said that Sutter “believes the complaints are baseless and misdirected. Practices of our hospitals around charity care charges and collections have always been consistent with the law and regulations.” Sutter Health has not yet filed answers to either lawsuit. 

At the press conference, Bill Sokol, one of the plaintiffs’ attorneys in the San Francisco-filed lawsuit, charged Sutter Health with participating in a “rapacious rip-off” and said the corporation “made $460 million in profit last year while calling itself a ‘non-profit.’” Sokol said Sutter’s profits came, in part, from $61 million in state and federal tax breaks. 

Among other things, the two lawsuits claim that Sutter “pursues aggressive collection techniques that often result in lawsuits, judgments, garnishments and bankruptcies against uninsured patients.” 

One of the lawsuits lists Nathaniel Pollack, an Albany resident and a former uninsured Alta Bates Summit patient, as a named plaintiff. The lawsuit claims that for a 10-day stay at Alta Bates Summit in 2003 for kidney failure, Pollack was charged close to $41,000 for treatment “largely consisting of...intravenous fluids to flush out his kidney.” 

Plaintiffs in the San Francisco lawsuit are represented by the Goldstein, Demchak, Baller firm and the Weinberg, Roger & Rosenfeld firm, both of Oakland, while plaintiffs in the Oakland lawsuit are represented by the Lieff, Cabraser, Heimann firm and Jenkins & Mulligan, both of San Francisco. 

Jessica Rothhaar, representing Health Access California, a statewide 501(c)(3) coaliton of more than 200 organizations advocating “quality, affordable health care for all Californians,” said that Sutter is guilty of the “outrageous practice of overcharging uninsured patients.” She said that the uninsured at Sutter hospitals are charged “three to 10 times what the privately-insured or patients in government-sponsored programs have to pay.”  

As one part of the overpayment charge, Sokol’s law firm produced what they said was a copy of a 2002 uninsured patient bill from California Pacific Medical Center in San Francisco—also owned by Sutter Health—which shows three separate $8.73 charges for single 81 mg aspirin tablets. 

Christine McMurry, Media Relations Manager at California Pacific Medical Center, said she could not confirm the accuracy of the bill. But McMurry said she did not find such a charge for aspirin “unusual.” 

“It’s easy to be shocked at a price like that, and I can understand why someone might complain,” she said. “But hospital bills do not merely reflect the actual unit price of an item; they also reflect other costs billed in that are not reflected in other parts of the bill. You won’t see a charge on a patient bill for four nurses at $60 an hour, for example, but those charges—and other operating costs for such things as technicians and janitors—are added to item charges. That’s a standard hospital billing practice, not just for our hospital.” 

Sutter spokesperson Gleason said that while he had not yet studied the two lawsuit complaints in detail, “they clearly contain information provided by SEIU Local 250, a labor union that has been waging a campaign against Sutter Health for a decade. Much of the information that SEIU has developed is wrong.” 

Gleason refuted the excess profits charge, noting that as a not-for-profit organization, Sutter Health “invests any income above expenses into new programs, new services, new facilities, and we have quite an outstanding track record in that regard.” 

He said that while Sutter hospitals “have always offered charity care to people who couldn’t afford to pay,” those charity care policies changed this year with what he called a clarification of Medicare regulations. 

“Until this year,” he said, “hospitals around the country have interpreted Medicare regulations as prohibiting them from offering discounts to patients without insurance.” He called the Medicare clarification “as a green light for hospitals to begin offering discounted pricing for people without insurance. Our hospitals were among the first to step up and begin offering discounts.” 

Gleason said that under the new charity-care guidelines, uninsured patients at 200 percent of the federal poverty guidelines or less ($37,700 for a family of four) “receive a full write-off for our services; they get free care,” while patients between 200 and 400 percent of the federal poverty guidelines (up to $75,400 for a family of four) “are entitled to a substantial discount,” paying the equivalent of what the Sutter hospitals receive from Medicare for any given service plus 20 percent.  

At the Summit Hospital press conference, Rothhaar of Health Access said that consumers would have to “wait and see” if Sutter Health care actually implemented those new charity care discount policies. She added that the two Bay Area lawsuits were part of a two-pronged effort aimed at lowering uninsured patient costs. 

The second prong is in the form of state legislation sponsored by State Senator Deborah Ortiz (D-Sacramento). SB 379, which has passed both houses of the legislature and is sitting on Gov. Arnold Schwarzenegger’s desk awaiting signature or possible veto, would require acute care hospitals in the state to develop charity care and reduced payment policies for patients unable to pay their bills. A spokesperson for the governor’s office said that the governor had not yet taken a position on the bill. The governor has until the end of September to take action. 

Sutter spokesperson Gleason said that Sutter Health has not taken a position on the Ortiz bill. “It’s somewhat of a moot point” for Sutter Health, he said, “because we have stepped up and addressed the issues that are contained in that legislation. Our charity care is probably fairly consistent with what is contained in the bill.” 

Gleason said the only substantial difference he knew about between Ortiz’ bill and the Sutter hospitals’ charity care policies was that the bill included charity discounts at “straight Medicare reimbursement rates,” while Sutter hospitals added 20 percent to that cost in their charity patient bills.