Focusing on Affordability.

Affordability Matters – To Everyone

Controlling healthcare costs and delivering high-value care is an important focus at Sutter. It’s important to us because it benefits our patients, their families and the broader healthcare system.

Sutter’s approach to affordability consists of two core pillars: reducing the average total cost of care by driving better health outcomes and streamlining care and services to reduce costs in ways that support our commitment to quality. Both are made possible by the unique benefits of our integrated system and help keep our costs to both patients and payors down, all while making care more affordable over time.

Controlling Costs & Improving Care

Sutter’s integrated network is able to scale best practices across multiple care sites, allowing for investments in innovations and technologies that save lives, deliver efficient care and shorter stays while helping our patients experience better outcomes and, ultimately, more affordable healthcare.  

Our efforts include:

Investing in Life-Saving Innovation: Making long-term investments in innovation and technology across the Sutter Health network has expanded patient access to the newest and best life-saving techniques, such as our e-ICU system, tele-stroke program and obstetric care best practices.

Spreading Best Practices: Applying best practices across the network helps reduce treatment variations and promotes high-quality care.

BEST PRACTICES:

Sutter rapidly scaled best practices to care for COVID-19 patients systemwide, reducing hospital stays from an average of 20 days early in the pandemic to just eight days today.

CREATING EFFICIENCIES:

Saved $30 million in two years by applying clinical best practices across our integrated network.

Focusing on Total Cost of Care: Sutter's relentless focus on efficiency and affordability is yielding results. Total cost of care, or how much it costs to treat a patient’s entire medical condition, is one way we measure healthcare affordability. And Sutter’s focus on delivering high-value care reduces medical complications, unnecessary procedures and hospital stays which, in turn, helps lower total cost of care.

A Medicare expenditure analysis of our acute care sites shows that our focus on lowering total cost of care is working:

Providing Cost Transparency

While independent analyses like this one have reported Sutter’s charges to be competitive and comparable to the market, it’s important for consumers to have access to meaningful, actionable cost information that can help them make decisions about their healthcare. This includes helping them to understand their potential out-of-pocket costs for anticipated healthcare services. That is why we offer tools such as the Sutter Healthcare Cost Estimator, which can be used to estimate the individual costs of more than 200 frequently used medical services provided by Sutter physician organizations.

Targeting Population Health

Sutter is actively focusing on population health, which is an approach that employs holistic healthcare to empower communities and drives equitable health outcomes for all. Our goal is to reach patients before they enter our hospital walls—advancing whole-person health that is personalized to the individuals we serve.

Promoting Efficiencies & Streamlining Services

Sutter’s integration allows us to carefully manage resources across the network, helping us to identify and deliver on opportunities to streamline services, reduce costs, and promote efficiencies.

Saved $473 million over a five-year period through coordinated resource management like vendor consolidation.

Embracing Value-Based Care Models

Sutter Health supports a value-based approach to care in many areas. This approach means providers and payers align to focus on health outcomes and efficiency rather than volume of care. These kinds of care models support higher quality care and better patient outcomes and reduce medical complications and unnecessary procedures – therefore helping to lower the total cost of care.

Focusing on Our Region

Northern California is home to a thriving healthcare region with more than a dozen hospital systems and a unique set of cost drivers for healthcare providers.

Our region has:

Factors driving up hospital costs throughout the region include:

Despite these factors, Sutter’s average overall rate increases to health plans have been held to low single digits annually since 2014.

Because of the unique challenges of operating in Northern California, including areas that have the highest labor costs in the country, and because we have kept our overall rate increases to insurance companies to a minimum, Sutter has seen its operating margin steadily decline over the past four years and has operated at a loss for the past two years.

Looking forward, Sutter Health is prioritizing continued work across our integrated network to lower the total cost of care for our patients. This focus will allow us to continue delivering high-quality, affordable healthcare that focuses on prevention and wellness while addressing some of the factors that impact costs for patients – and the nation’s broader healthcare system – over time.


[1] This data includes hospital systems as defined by OSHPD, healthcare organizations that define themselves as a health system and independent hospitals.