Memorial Health System

Viewers of a story on “60 Minutes” Sunday about how a hospital system grew to gain market powers and drove up northern California health care costs has some discussing similarities with Memorial Health System’s possible affiliation with Salina Regional Health Center.

“California is different,” Harold Courtois, MHS chief executive officer, said of the “60 Minutes” program. “Especially in northern California.”

He said the proposed affiliation is not going to be a monopoly.

“Salina Regional doesn’t have that power. We’re not going to tell Medicaid, Medicare and Blue Cross what they are going to pay us,” he said. “Those payments are already decided for us. All we do is sign a contract.

“We could charge whatever we want but guess what we get paid? Whatever Medicare, Medicaid and Blue Cross say you are going to get paid,” he said. “We could say we are going to up our prices 10 percent, which we wouldn’t. What if we did? Guess what we are going to get? Whatever we get today and whatever they decide we are going to get next year. It isn’t going to change anything because we are so different than California.

He said Sutter Hospital, referred to in the “60 Minutes” segment, is a conglomerate of 24 hospitals with 12,000 physicians, which does carry a lot of weight in northern California.

The 60 Minutes program said that Blue Shield is at the whim of Sutter naming its price.

“This here is just completely a 180 of what California is,” said Courtois, who was called out of a meeting to answer questions about the proposed merger with Salina Regional. “I don’t know how you do that in Kansas. That is not something that is going to happen with Salina.

“We could charge whatever we want but we’ll only get what Blue Cross Blue Shield, Medicare and Medicaid are willing to pay,” Courtois repeated.

The California attorney general, Xavier Becerra, filed a civil lawsuit against Sutter in 2018.

“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,” according to “60 Minutes”.

By contrast, the agreement Memorial Health System is reviewing with Salina Regional is an affiliation. While details are still being worked out, it is not a merger, officials have said.

Courtois said he is aware that in northern California Sutter is one of the largest and most dominant providers of health care.

“I do know that the prices in the northern half of California are way higher than the southern half,” he said.

Courtois said the affiliation is not to increase revenue.

“Increased revenues would be up to, if we can increase our services,” he said. “We would get a lot of savings out of being with Salina Regional. As we move into global payments and quality payments, we don’t have the people to oversee that here.”

Contact Tim Horan at editor@Abilene-rc.com.

Contact Tim Horan at editor@abilene-rc.com.

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