A temporary hospital which is been settled up by members of the California National Guard is seen in Indio, California on March 29, 2020. So, if there was a specialty, say maternity, that they knew every employer would need, they created a monopoly around maternity. She didn’t take it. Last month, for instance, about 150 registered nurses in San Jose and San Diego were temporarily laid off because of department closures and the cancellation of elective procedures, Roberson said. Lesley Stahl: So you think this-- what you did'll become a model. Lesley Stahl: They can't fight either? And some of these counties are 1,000 square miles. (LAUGH). Good for them!". Xavier Becerra: It's domination of the market. She’ll be working partial hours until patient visits pick up again, she said. They are just charging more for the same thing. Gavin Newsom allowed hospitals to resume some elective surgeries, which is the bread and butter for many facilities. Support Times of San Diego's growthwith a small monthly contribution. May 26, 2020 Registered nurses at 15 HCA hospitals in six states will participate in actions Thursday and Friday to protest demands by the nation’s largest hospital chain for widespread layoffs and economic cuts that nurses say will also put patients in danger. And business taxes that they don't pay are added on top of that. According to the lawsuit, Sutter used its leverage to force the big companies and their insurers into what are called "all-or-nothing" contracts, meaning that they had to include all 24 of Sutter's hospitals in their health plans. “And that is because 60 percent of hospital spending is for labor,” she told lawmakers. This week, the Legislature’s Latino Caucus sent a letter to the Newsom administration also warning that many of the state’s health centers will not be able to remain open much longer “without significant financial support from the state.”. And so we can't comparison shop. Citing a revenue drop of 60 percent due to the COVID-19 pandemic, Rutland City, Vt.-based Rutland Regional Health System has furloughed 150 employees, according to WCAX. Lesley Stahl: Wow. Palomar Health, which runs three medical centers in northern San Diego County, recently instituted 21-day temporary layoffs of 221 employees. – The new field hospital with 125 beds will help ease the burden on the local hospital system amid the growing COVID-19 Coronavirus crises. 11 California employment law changes for 2020 Employers in the state may need to brush up on recent changes and prepare for those still to come. Lesley Stahl: So who are some of these big companies? And they could not control Sutter? Now providers and state lawmakers are searching for ways to keep hospitals, clinics and private practices afloat and its workers employed — or face the prospect of a deeper medical jobs shortage months or years from now. © 2020 CBS Interactive Inc. All Rights Reserved. Let's push.". Produced by Richard Bonin. Lesley Stahl: --which suggests that they're not out for financial gain. Elizabeth Mitchell: Walmart, Boeing, Cisco, Intel, really the biggest companies in the world. This week, California hospitals are planning to ask the state for $1 billion before June 30 to help with immediate revenue losses, said Carmela Coyle, the CEO of the California Hospital Association. Attorney general Becerra and Sutter are waiting to see if the tentative, out-of-court settlement they reached is approved. So--. The California Department of Health and Human Services confirmed that currently laid off workers are not prioritized for these jobs. A nurse in a primary care office or one who specializes in orthopedic care, for example, perhaps wouldn’t be the best fit to care for a coronavirus patient on a ventilator, she explained. Someone else might look at it and say, "Wow, that's smart business. There's a lawsuit over this in COVID-ravaged California, with the state attorney general claiming that Sutter Health, a hospital chain based in Sacramento, got so big it had essentially become a monopoly. We've got some facilities that are behaving the same way. Democratic Assemblyman Jim Wood of Healdsburg said it makes more sense to look at laid off workers first for Health Corps jobs, rather than hire people who need to be retrained and recredentialed. But some hospitals, especially smaller ones or those in rural areas, are already in a deep hole. The Appeal-Democrat in Marysville told readers it … They can reduce duplication and they can cut costs. The state's attorney general, Xavier Becerra, filed a civil lawsuit against Sutter in 2018. (Photo by Apu Gomes/AFP via Getty Images) So there's kind of this second-order effect: that this type of behavior leads to much higher prices across the board. The coronavirus pandemic has unleashed more than a flood of disease in this country. It's happening across the country, the largest health systems are buying up everything. Caring for a premature baby in Northern California, for example, costs about $605,000. They are also blocked? They were the first one to do it. Lesley Stahl: When you did the investigation, did you look at other variables that might have been the reason for the higher prices? Martha Bellisle, Associated Press. “And we did that, we answered that call. It is just the prices. Hillary Ronen: Sutter avoids tens of millions of dollars a year in local property taxes. The suit accuses Sutter of embarking on "…an intentional, and successful, strategy…" of cornering much of the market in Northern California, and then jacking up prices -- for example, on the price of delivering a baby. Elizabeth Mitchell: Well, that is true in every other industry. It is the largest driver of health care cost increases. Copyright © 2021 CBS Interactive Inc.All rights reserved. Lesley Stahl: And there's one or two hospitals in a thousand square miles? KQED in northern California laid off 20 people and reduced hours for other employees. Now that sounds reasonable. Lesley Stahl: I understand that the City and County of San Francisco spends roughly $800 million a year in health costs. The Kaiser Family Foundation (KFF) posted study results of CARES disbursement this spring in an analysis of 4,564 hospitals, including 3,242 short-term care facilities and 1,322 so … Meanwhile, clinics and doctors’ offices continue to struggle with a drop in revenue as patients are advised to avoid non-emergency in-person visits. injuries. Lesley Stahl: Do you think that this is the main reason that health costs are going up? An injection of cash from the state could help hospitals avoid or reduce pay cuts and layoffs, she said. An injection of cash from the state could help hospitals avoid or reduce pay cuts and layoffs, she said. Glenn Melnick: That's right. Hillary Ronen: They are. Lesley Stahl: I actually heard that it costs more to deliver a baby here in Sacramento than anywhere else in the entire country. So they have monopoly powers in a number of these counties, right? Despite being the wealthiest state, California has a lower than average number of hospital beds. Xavier Becerra: You live in Sacramento, you can expect to pay twice as much to deliver that baby here than in your hometown of New York City. ", Lesley Stahl: Now they control the maternity care in Northern California--. Xavier Becerra: This settlement is gonna change the life for hundreds of thousands of Californians. But as of last week, UMass Memorial Medical Center … Updated 4:53 pm EST, Thursday, December 17, 2020 A reason their health costs were so high, she says, is because Sutter was able to block the city and its insurer, Blue Shield of California, from steering employees to hospitals with lower prices. Lesley Stahl: Sutter's a not-for-profit hospital--. You think of them as being all-powerful. This week, California hospitals are planning to ask the state for $1 billion before June 30 to help with immediate revenue losses, said Carmela Coyle, the CEO of the California Hospital Association. Elizabeth Mitchell: This is happening in Maine. They were able to bully everyone else to conform; it was my way or the highway. Maybe equipment was better? When Aimee Paulson, a nurse practitioner, learned in late March she was being temporarily laid off from the private family practice she’d worked at for the last three years, she was disappointed but not surprised. The problem is it has not been achieved in these mergers. So if an employer would try to exclude the system, they said, "Well, you can't do that because you have to have our maternity services. Wow. Hospitals Lose Money During Pandemic; Healthcare Workers Face Layoffs, Cut Hours Faced with lost revenue from canceled elective procedures, hospitals laid off … It galls Hillary Ronen that Sutter is a not-for-profit company, meaning legally it pays no taxes even though it earned $13 billion in revenue last year. Lesley Stahl: But what about this idea of coordinated care? We're not getting better outcomes. California Sunday Magazine will go online only . Currently, claims can take up to 90 days to process, but “we need to move those dollars more quickly,” Coyle said during an Assembly budget hearing last week. An injection of cash from the state could help hospitals avoid or reduce pay cuts and layoffs, she said. On Wednesday, she returned to the San Ramon practice after her employer qualified for a Paycheck Protection Program loan. And to pay its outgoing CEO $13 million in 2016, and a year later, paid its new CEO $6 million. In all, he says, the average cost of in-patient care in Northern California is 70% higher than in Southern California. California finally acts to protect virus-threatened hospital workers California’s new goal is to COVID-test hospital workers. This week, California hospitals are planning to ask the state for $1 billion before June 30 to help with immediate revenue losses, said Carmela Coyle, the CEO of the California Hospital Association. “My rationale is they’re going to go on unemployment, and then we turn around and pay someone else,” Wood said. What they came up with is a model that allowed them to acquire market power, and get higher prices without doing any of those good things for consumers. Sutter is a sprawling health care system that's the largest and most dominant provider in Northern California. Broadcast associate, Claire Fahy. ... 2020, 2:40pm PST “So you have furloughs happening in community health centers and in certain departments of hospitals, while at the same time there is concern about a surge and we’re hearing these calls for things like a health corps,” she said. Workers are taking turns as needed, according to the state’s Department of Health and Human Services. Click here, Hospital Layoffs Rising in California as Few Elective Procedures Are Performed, New Data Shows How San Diego County Compares Nationally in the Pandemic, California Highway Patrol Placed on 'Tactical Alert' in Case of Violence Ahead of Inauguration, San Diego Residents 65+ Are Next in Line for Vaccine, But Supplies Still Limited, San Diego Leaders Plan for Quiet Inauguration Day, Remote Meetings, San Diego County Reports 2,695 COVID-19 Cases, 32 Deaths, Opinion: Santee’s Dustin Trotter Should Resign as Backer of D.C. Insurrectionists, MarketInk: Prolific Announcer Hangs Up Microphone After 2,000 Games Over 35 Years, First Vietnamese American Judge Joins San Diego’s 4th District Court of Appeal, San Diego Weekend Guide: Jan. 15-17 – MLK Day Edition, Governor Activates 1,000 California National Guard Troops to Protect State Capitol. Hospitals have also asked that health insurance plans accelerate payments for claims within 30 days during the pandemic. She called her patients, many of whom followed her from her previous workplace, and told them she hoped to be back by June. ", Lesley Stahl: You might look at that and say, "That's monopolistic." Gavin Newsom announced the California’s Health Corps, whose members would tend to coronavirus patients in alternate care facilities. Laying off and furloughing staff is a “recipe for disaster,” said Stephanie Roberson with the California Nurses Association. Xavier Becerra: Why Sacramento should be the most expensive place to have a baby-- there's no way to explain it. And it was able to prevent Blue Shield from telling the city what Sutter's hospitals would charge for individual procedures. And they keep naming their price, and I feel like I'm handcuffed to do anything about it. How a hospital system grew to gain market power and drove up California health care costs Sutter Health is in the midst of a lawsuit for business practices that drove up health care … And the quality isn't increasing. Lesley Stahl: So here you have these giant companies. An injection of cash from the state could help hospitals avoid or reduce pay cuts and layoffs, she said. Lesley Stahl: Sutter was forcing big companies to cover hospitals in places where nobody worked for the company lived? 02, 2020 This article has been updated to clarify that Stanford Health Care cook Sarah Jane Von Wettberg chose a … Her organization has been protesting these layoffs. This data is collected daily and the number of infected nurses and health care workers continues to … A group of Palomar Health employees lined the sidewalk along Pomerado Road in front of Palomar Medical Center Poway on Monday morning to object to a 21-day layoff of 221 district employees. Sutter's quest to dominate the market, Attorney General Becerra says, began in the 1990s with a campaign of mergers and acquisitions that enabled it to grow from two hospitals into the behemoth it is today. And I'd say millions of Americans because I think you're gonna see other states take what we did and say, "Ah-hah. They were gobbling up physicians through these physician practices. But this is, even at this stage, a landmark case because it pulled back the curtain on what has rarely been seen or so thoroughly documented before: how and why hospital prices have been skyrocketing. Cash-strapped hospitals lay off thousands of health workers despite COVID-19 staff shortages ... 2020 2:00PM (UTC) ... it would lay off at least 300 workers at a Detroit-area hospital … On the eve of the trial, Sutter tentatively agreed to a settlement that's awaiting a judge's approval. COVID-19 cases top 200 at hospital as layoffs announced. Most alarming, she says, hospitals across the country have been following Sutter's lead. We interviewed him before the pandemic and before he was nominated for secretary of Health and Human Services. Hillary Ronen: Sutter won't allow us to see how much they charge for their services. Elizabeth Mitchell: That's right. Both are at medical schools and serve as regional safety nets. Hillary Ronen: That's right. FILE - In this March 19, 2020, file photo, an employee walks near an entrance to Western State Hospital in Lakewood, Wash. As coronavirus cases top … Hillary Ronen is a member of San Francisco's city and county board of supervisors and sits on its budget committee. They merge and then they use their market leverage to increase prices. It-- it's unbelievable. Did you take all that into consideration? California Health Care Workers Test Positive In What Experts Predict Will Be ‘First Of Many’: Staff members of the UC Davis Medical Center, including one emergency room nurse, have tested positive for COVID-19. The most recent report from the Bureau of Labor and Statistics showed the health care workforce lost 43,000 jobs in March 2020, but at that time this was primarily due to job losses in dental offices and private physician offices, not layoffs from large healthcare institutions. The state accused Sutter of using its "windfall" from its "excessive pricing" to finance the acquisition of new hospitals and physicians groups. 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