Sutter Health responsibly manages our resources, including a focus on efficiency and innovation to help control costs and improve affordability. Our integration and emphasis on best practices helps reduce medical complications, unnecessary procedures and hospital visits, which helps to lower cost of care for our patients and employers.
Making healthcare less costly and more convenient requires innovative thinking and tenacity. That is why Sutter Health is combining big and small measures across our system to help drive savings for Sutter and our patients.
Applying best practices across our integrated network helps reduce treatment variations and promotes high-quality care. These efforts saved $30 million in just two years.
Sutter’s careful resource management – consolidating vendors, streamlining services and creating administrative efficiencies – saved $473 million in operating costs over a five-year period.
These are just a few of the hundreds of measures that help drive savings for Sutter Health and our patients.
Learn more about how Sutter is driving affordability across our integrated network.
One of the main underlying cost drivers in the Northern California region is high wages as the region is home to 11 of 12 of the nation’s highest hospital wage index values. Sutter Health proudly provides well-paying jobs with generous benefits so that our employees are compensated for the value they contribute. At Sutter, labor costs represent more than 60% of total operating expenses.
Costs in many areas are steadily increasing, including seismic upgrades, regulatory requirements, facility upgrades and lifesaving technology investments.
Despite external factors that are impacting costs, Sutter Health’s integrated network is working to hold the line on costs.
Sutter Health has held average overall rate increases to health plans to less than 3% annually since 2014, despite actual expenses for labor, facilities and technology increasing by an average of 6% each year.
U.S. government statistics show average costs for care at Sutter are 7% lower than comparable Northern California hospitals and 17% lower than peer physician groups nationally.
1. The Dartmouth Institute for Health Policy and Clinical Practice; The Dartmouth Atlas Data; Medicare spending per decedent during the last two years of life https://atlasdata.dartmouth.edu/static/eol_chronic_illness
2. 2016 CMS Quality and Resource Use Reports for Sutter Health Foundations in Northern California.