What is Sutter Health?
Sutter Health Corporate Structure
Hospitals & Medical Foundations by Region
Sutter Health In The News

WHAT IS SUTTER HEALTH?
Sutter Health is the largest hospital system in Northern California and one of the most profitable systems in the entire nation. Sutter currently operates 26 hospitals and numerous medical foundations, clinics, insurance companies, home health agencies, a medical equipment company, and other holdings. See Sutter Health’s corporate structure.

The Sacramento-based corporation, which has more than $5 billion in assets and 37,000 employees, earned nearly a half billion dollars in profit during 2003. Although Sutter legally is a "non-profit" corporation, the company is composed of dozens of for-profit and non-profit subsidiaries. Both the US Senate Finance Committee and the House Ways and Means Committee have launched investigations of Sutter Health as part of their examination of hospital tax exemption issues.

Sutter Health has grown rapidly, taking over 15 hospitals and more than doubling in size since 1996. Sutter’s expansion has allowed it to capture a significant share of the market in the East Bay area, Sacramento, San Francisco, Marin, San Mateo, and, to a lesser extent, the Central Valley. Sutter now controls 41 percent of non-Kaiser hospital discharges in the East Bay, and in the inner East Bay—stretching from San Pablo and Richmond in the north to Hayward and Castro Valley in the south—Sutter controls nearly 60% of the inpatient hospital business and roughly 70% of hospital-based outpatient visits. i Sutter Health also is actively expanding its market share in other business lines, including physician groups, outpatient facilities, and insurance products. Sutter Health plans to allocate more than $5.7 billion over the next ten years to continue expansion efforts and to meet seismic safety requirements. ii

As the largest healthcare corporation in Northern California, Sutter Health plays an important role in Northern California's health care delivery system. In 2003, Sutter hospitals treated more than 725,000 patients in their emergency rooms and discharged nearly a quarter million hospital patients - more than any other hospital system in the region. Sutter Health's practice and policies affect more than one hundred Northern California communities that rely on its facilities for medical care.

Moreover, because Sutter Health has established a key presence in most Northern California healthcare markets, virtually all major health plans and most physicians groups operating in the area must contract with them. Purchaser groups, such as the California Health Care Coalition, have suggested that Sutter has used its market position to compel purchasers and payers to pay higher prices that are not justified by higher quality standards. This follows the California Public Employees Retirement System's decision to eliminate 13 Sutter Health hospitals from its Blue Shield HMO network because they did not meet CalPERS' price and quality standards. Some physicians, too, recently have reported growing concerns about Sutter Health's efforts to replace traditional physician-hospital relationships with a model that more closely ties physicians to Sutter hospitals.

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i. OSHPD, Hospital Annual financial Data, 2003; OSHPD Patient Discharge Data, 2003. The East Bay is defined as Alameda and Contra Counties
ii. Sutter Health Website, www.sutterhealth.org/about/news/news_capital-projects.html, 9/16/03.