Sacramento-based Sutter Health has asked a San Francisco Superior Court judge to delay approval of its $575 million antitrust settlement with California’s attorney general's office.
Adam Steinhauer, editor of the Sacramento Business Journal, spoke with CapRadio morning news anchor Steve Milne about the settlement.
On what prompted the antitrust lawsuit
This started with a private lawsuit filed in 2014 by a group of self-insured health plans. They accused Sutter of using its market dominance in Northern California to raise health care costs essentially and the state attorney general's office joined later. They reached the settlement agreement late last year.
The situation has changed since the settlement was announced. With the pandemic, the approval of the settlement was delayed as the courts were shut down.
And in the meantime, Sutter reported the first quarter loss of more than $1 billion largely related to the expenses of preparing for the wave of COVID-19 cases that the health care system was expecting. That involved ramping up capacity and also shutting down optional health care procedures that the health system relies on for profit.
On Sutter’s financial situation in light of the lawsuit.
Basically they are talking about possibly having to close some facilities or repurpose them. In their court filing, they outlined some financial stress that they're facing.
This basically calls into question their ability to comply with the terms of the settlement, including the provisions that would prevent them from raising costs. They say they have costs to recoup from having to prepare for the pandemic.
On a new development in Folsom
If you've spent time in old Folsom, you've probably seen the distinctive round building at the end of that area. It's finally being occupied next month by a Scott's Seafood and another business called Willamette Wineworks is open.
Basically that when this project started way back in 2006, this was intended to be phase two of a four-phase project. But that ended up being completed first.
Developer Jeremy Bernau is now moving on to start construction, hopefully by the end of the year, on a $10 million, three-story phase of lofts and retail space.
On why the developer didn’t start with the Granite Station portion, which includes building new lofts.
This project has a long history. It's been delayed. It was delayed by the Great Recession and it was delayed by the end of our redevelopment agencies in California.
And, that development, as we understand it, made it harder for Bernau to get a hold of the property up for this phase that was going to include the housing. So basically, he moved forward on that restaurant phase first.
This interview has been edited for brevity and clarity.
Editor’s Note: Sutter Health is a major donor to CapRadio.
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