© 2020 CBS Interactive Inc. All Rights Reserved. Hillary Ronen is a member of San Francisco's city and county board of supervisors and sits on its budget committee. “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. This data is collected daily and the number of infected nurses and health care workers continues to … Support Times of San Diego's growthwith a small monthly contribution. (a) As of April 13, 2020, local health departments in California have reported 2,501 confirmed positive novel coronavirus (COVID-19) cases in nurses and health care workers. That money comes from the same pot of money that we use to build new homeless shelters to hire firefighters, to pave our streets, to repair our parks. Lesley Stahl speaks with  Elizabeth Mitchell, California Privacy/Information We Collect. And business taxes that they don't pay are added on top of that. And the quality isn't increasing. A temporary hospital which is been settled up by members of the California National Guard is seen in Indio, California on March 29, 2020. The layoffs are spread across over a dozen Adventist Health hospitals in California. On Thursday, another union, SEIU-United Healthcare Workers West, will be protesting a 20% pay cut at Stanford Health Care. A spokeswoman, Melissa Tizon, said Dr. Hochman would take a voluntary pay cut of 50 percent for the rest of 2020. Elizabeth Mitchell: Coordinated care is what everybody wants. Despite being the wealthiest state, California has a lower than average number of hospital beds. It's also expected to accelerate a wave of hospital mergers and acquisitions – with big hospitals buying up smaller ones. 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. Someone else might look at it and say, "Wow, that's smart business. We asked Sutter for an interview, but the hospital declined and instead sent us a statement saying, in part, that it's committed "…to high-quality, affordable care…" and that its coordinated health care network "delivers healthier patient outcomes at a lower total cost of care," something that "…has proven even more critical during the COVID-19 pandemic.". For once in their life the insurance company is not the worst actor in the room, it's Sutter. Copyright © 2021 CBS Interactive Inc.All rights reserved. Lesley Stahl: Sutter's a not-for-profit hospital--. “My rationale is they’re going to go on unemployment, and then we turn around and pay someone else,” Wood said. In all, he says, the average cost of in-patient care in Northern California is 70% higher than in Southern California. If so, Sutter will admit no wrongdoing, but will pay $575 million and agree to stop blocking patients' access to less expensive hospitals and requiring "all-or-nothing" contracts. Very sophisticated. They are also blocked? 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. So there's kind of this second-order effect: that this type of behavior leads to much higher prices across the board. It’s an ironic twist to the pandemic: When the healthcare system seems to need workers the most, it can’t afford to keep them all. Elizabeth Mitchell: This is happening in Maine. That's just a fraction of the real total. Now that sounds reasonable. Lesley Stahl: --which suggests that they're not out for financial gain. Xavier Becerra: They were gobbling up hospitals. The state accused Sutter of using its "windfall" from its "excessive pricing" to finance the acquisition of new hospitals and physicians groups. An injection of cash from the state could help hospitals avoid or reduce pay cuts and layoffs, she said. Glenn Melnick: If Sutter is able to raise their prices by improving quality, value, and service, that's fine. She’ll be working partial hours until patient visits pick up again, she said. ", Lesley Stahl: Now they control the maternity care in Northern California--. It-- it's unbelievable. We're not getting better outcomes. 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. Lesley Stahl: But what about this idea of coordinated care? She didn’t take it. Most alarming, she says, hospitals across the country have been following Sutter's lead. Gavin Newsom announced the California’s Health Corps, whose members would tend to coronavirus patients in alternate care facilities. On Monday, David Lubarsky, CEO of UC Davis Health, alerted hospital employees that some of their colleagues had been infected. Let's push.". Xavier Becerra: That's why this investigation took years, because you have to eliminate all the other reasons that might be out there. Adventist Health's other layoffs hit across the state, including at Adventist locations in Los Angeles and Northern California. But that applies only to his base … Others may not be as fortunate. Sutter Health is in the midst of a lawsuit for business practices that drove up health care prices for Californians. 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. And they figured out, "Wow, this really works! Lesley Stahl: When you did the investigation, did you look at other variables that might have been the reason for the higher prices? Palomar Health, which runs three medical centers in northern San Diego County, recently instituted 21-day temporary layoffs of 221 employees. And at one hospital alone they're avoiding $20 million a year. One of America's most recognized and experienced broadcast journalists, Lesley Stahl has been a 60 Minutes correspondent since 1991. Elizabeth Mitchell: Well, that is true in every other industry. And the prices continually grew faster and faster than other comparable hospitals. ... 2020, 2:40pm PST From March 1 to March 25, 139 companies in California reported laying off 18,998 employees. Her organization has been protesting these layoffs. 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. Coyle said hospitals have done their best to keep their staff, but furloughs and layoffs have begun. A recent survey of more than 3,200 physicians by the California Medical Association, for example, found that 49% of practices have had to lay off or furlough staff. Glenn Melnick: So we called it the "Sutter effect," where if you have a large, dominant system like this, they raise their prices high, all their competitors can raise their prices higher. So they have monopoly powers in a number of these counties, right? Good for them!". The coronavirus pandemic has unleashed more than a flood of disease in this country. They were the first one to do it. Lesley Stahl: So here you have these giant companies. On Wednesday, she returned to the San Ramon practice after her employer qualified for a Paycheck Protection Program loan. 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 … Lesley Stahl: They can't fight either? As of Tuesday, only five patients were being treated there. Elizabeth Mitchell: We have seen the data. In Southern California: $343,000. COVID-19 cases top 200 at hospital as layoffs announced. Lesley Stahl: It's just Sutter hiking prices. And their prices went up. So--. They are just charging more for the same thing. For the record: 5:41 PM, May. We've got some facilities that are behaving the same way. You think of them as being all-powerful. Coronavirus, layoffs and cutbacks have nurses at Baystate Noble Hospital concerned about future Updated Mar 11, 2020; Posted Mar 11, 2020 Nurses Dennise Colson and … That means canceling surgeries and procedures and more,” she said. KQED in northern California laid off 20 people and reduced hours for other employees. In late April, Gov. Elizabeth Mitchell: They could not. 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. The hospitals have much in common. Did you take all that into consideration? Laying off and furloughing staff is a “recipe for disaster,” said Stephanie Roberson with the California Nurses Association. Elizabeth Mitchell: And sometimes they would have to include hospitals that were in regions that the employers didn't even have employees in. That sentiment is shared by one of the state's largest labor unions, the United Food and Commercial Workers, as well as many of the state's large employers that belong to the Pacific Business Group on Health headed by CEO Elizabeth Mitchell. Hillary Ronen:  Sutter avoids tens of millions of dollars a year in local property taxes. Assemblyman Wood said he believes the pandemic is “going to be a breaking point for some offices and clinics.” He said he is concerned about the loss of primary care doctors, especially in rural districts like his that already struggle to attract and retain them. CalMatters is a nonprofit, nonpartisan media venture explaining California policies and politics. With coronavirus spread, California layoff notices surge … And so we can't comparison shop. That they use their size to reduce their prices. That's- that's really clever. injuries. 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. Hillary Ronen: They are. The rest are being used to staff nursing homes that need temporary or emergency support. Lesley Stahl: So who are some of these big companies? They can reduce duplication and they can cut costs. Glenn Melnick: They really pioneered this model of reducing competition to raise prices. The more hospitals they acquired, the more physicians they employed, the more leverage they had in the market. “But as we begin to assess the damage, the toll is enormous.”. Martha Bellisle, Associated Press. Hospitals Lose Money During Pandemic; Healthcare Workers Face Layoffs, Cut Hours Faced with lost revenue from canceled elective procedures, hospitals laid off … 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 … Attorney general Becerra and Sutter are waiting to see if the tentative, out-of-court settlement they reached is approved. So, if there was a specialty, say maternity, that they knew every employer would need, they created a monopoly around maternity. Of these Health Corps members, 233 are on call to staff the Sleep Train Arena, the former Sacramento Kings playing venue which was prepped for up to 400 patients with mild or moderate cases of COVID-19. Meghan McCarty Carino Dec 31, 2020. Xavier Becerra: I think it's a game changer. 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. At the outset of the pandemic, the state asked hospitals to prepare for a surge and make room for about 40,000 more patients at once. They merge and then they use their market leverage to increase prices. ", Lesley Stahl: You might look at that and say, "That's monopolistic." Hillary Ronen:  Are added on top of that. 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. And it was able to prevent Blue Shield from telling the city what Sutter's hospitals would charge for individual procedures. And I'd say millions of Americans because I think you're gonna see other states take what we did and say, "Ah-hah. 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 … Lesley Stahl: You called this case a "big effing deal." Hiring is based on need and geography, according to the agency. 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: I actually heard that it costs more to deliver a baby here in Sacramento than anywhere else in the entire country. Lesley Stahl: Sutter says that when you have a system as big as theirs, what they can offer is coordinated care. And to pay its outgoing CEO $13 million in 2016, and a year later, paid its new CEO $6 million. Updated 4:53 pm EST, Thursday, December 17, 2020 Elizabeth Mitchell: Collectively our members spend $100 billion a year purchasing health care on behalf of 15 million Americans. In the midst of a public health crisis, Paulson and other healthcare workers are learning they aren’t immune to layoffs, furloughs and pay cuts. 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Broadcast associate, Claire Fahy. It was abusing of its power. (Photo by Apu Gomes/AFP via Getty Images) Both are at medical schools and serve as regional safety nets. 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. Xavier Becerra: This settlement is gonna change the life for hundreds of thousands of Californians. California finally acts to protect virus-threatened hospital workers California’s new goal is to COVID-test hospital workers. Xavier Becerra: Sutter got big enough that it could use its market power to dominate, to dictate. Lesley Stahl: The insurance company, Blue Shield? Out of the approximately 94,000 people who have applied to the state’s backup medical reserve, 551 have been accepted into the program. It's happening across the country, the largest health systems are buying up everything. We're not getting, you know, healthier people. 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. They were just munching away, getting bigger and bigger. Lesley Stahl: Wow. Lesley Stahl: I understand that the City and County of San Francisco spends roughly $800 million a year in health costs. This consolidation, economists say, is one of the main reasons the cost of health care in this country is going through the roof. She called her patients, many of whom followed her from her previous workplace, and told them she hoped to be back by June. But as of last week, UMass Memorial Medical Center … In late March, Gov. “This will hasten the retirement of some folks, or the closing of practices,” he said. 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. The Appeal-Democrat in Marysville told readers it … But that surge in anticipated volume hasn’t occurred and these facilities across the state remain mostly empty. 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. Hillary Ronen: That's right. It was all or nothing and no employer could do without all of the Sutter system. 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. Hillary Ronen: At any way you look at it, any path you look, we are getting screwed. Lesley Stahl: So you think this-- what you did'll become a model. And they do it because they can. Associate producers, Magalie Laguerre-Wilkinson and Mirella Brussani. In the lawsuit, evidence showed that Sutter's quality of care, while well-regarded, was generally comparable to other hospitals in California, and that its higher prices have been contagious. (LAUGH). And some of these counties are 1,000 square miles. 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 … Caring for a premature baby in Northern California, for example, costs about $605,000. Elizabeth Mitchell: As an example, they control the maternity care. 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.”. He found, for instance, that in 11 counties of Northern California... Glenn Melnick: They're either the only one hospital, or one of two hospitals. And they did this very strategically. Maureen Zeman was a registered nurse for 29 years at a hospital in San Jose, California, before she was laid off with dozens of other nurses – amid the coronavirus pandemic. And they're not providing more services. Elizabeth Mitchell: Walmart, Boeing, Cisco, Intel, really the biggest companies in the world. But some hospitals, especially smaller ones or those in rural areas, are already in a deep hole. Wow. 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. It's hospital prices. The state's attorney general, Xavier Becerra, filed a civil lawsuit against Sutter in 2018. COVID-19 Hits Some Health Care Workers With Pay Cuts And Layoffs : Shots - Health News As the health industry focuses on COVID-19, there has been a … 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. The next year, they went up even faster. 02, 2020 This article has been updated to clarify that Stanford Health Care cook Sarah Jane Von Wettberg chose a … Gavin Newsom allowed hospitals to resume some elective surgeries, which is the bread and butter for many facilities. Workers are taking turns as needed, according to the state’s Department of Health and Human Services. Hillary Ronen: Sutter won't allow us to see how much they charge for their services. 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. – The new field hospital with 125 beds will help ease the burden on the local hospital system amid the growing COVID-19 Coronavirus crises. Elizabeth Mitchell: That's right. California hospitals so far have received $3 billion in aid from the federal government, she added. Layoffs involving excluded (supervisory, managerial, and confidential) employees and rank-and-file employees in nearly all bargaining units are based on the employees' total State service. “And we did that, we answered that call. And they keep naming their price, and I feel like I'm handcuffed to do anything about it. 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. We emptied California’s hospitals to make way. On the eve of the trial, Sutter tentatively agreed to a settlement that's awaiting a judge's approval. Patient visits in the San Ramon office had gone down by almost 80% as the coronavirus outbreak kept people at home. Glenn Melnick: That's right. This bill would define “injury,” for a hospital employee who provides direct patient care in an acute care hospital, to include infectious diseases, cancer, diseases and musculoskeletal injuries, post-traumatic stress disorder, and respiratory diseases. Xavier Becerra: It's domination of the market. 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. We interviewed him before the pandemic and before he was nominated for secretary of Health and Human Services. And they could not control Sutter? They were able to bully everyone else to conform; it was my way or the highway. Why? Edited by Jorge J. García. “It is a weird dichotomy,” said Joanne Spetz, associate director of research at the Healthforce Center at the University of California, San Francisco. Quality might have been better? Lesley Stahl: Do you think that this is the main reason that health costs are going up? Blue Shield is as at the whim of Sutter naming its price as we are. Produced by Richard Bonin. 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. Hospitals have also asked that health insurance plans accelerate payments for claims within 30 days during the pandemic. And yet the opposite has been true in health care. It is the largest driver of health care cost increases. I think that was one of the reasons that these mergers were allowed to happen. And you can't explain it away by the cost of living, cost of labor. Maybe equipment was better? Till they amassed a conglomerate of 24 hospitals, 12,000 physicians, and a string of cancer, cardiac and other health care centers. It is just the prices. Meanwhile, clinics and doctors’ offices continue to struggle with a drop in revenue as patients are advised to avoid non-emergency in-person visits. And the more we're paying on employee health care, the less we're paying on the toughest entrenched problems we're trying to fix in San Francisco. “And that is because 60 percent of hospital spending is for labor,” she told lawmakers. It's happening in Texas. Sutter is a sprawling health care system that's the largest and most dominant provider in Northern California. Hillary Ronen: We have so many difficult problems in San Francisco that we're trying to fix. An injection of cash from the state could help hospitals avoid or reduce pay cuts and layoffs, she 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. Xavier Becerra: They're like the bully on the block. Lesley Stahl: And there's one or two hospitals in a thousand square miles? Lesley Stahl: Sutter was forcing big companies to cover hospitals in places where nobody worked for the company lived? Glenn Melnick is a health care economist at the University of Southern California who consulted on the lawsuit and was one of the first researchers to document Sutter's strategy of making itself indispensable. The problem is it has not been achieved in these mergers. Xavier Becerra: Why Sacramento should be the most expensive place to have a baby-- there's no way to explain it. 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. >> Subscribe to Times of San Diego’s free daily email newsletter! An injection of cash from the state could help hospitals avoid or reduce pay cuts and layoffs, she said. 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. An injection of cash from the state could help hospitals avoid or reduce pay cuts and layoffs, she said. The California Department of Health and Human Services confirmed that currently laid off workers are not prioritized for these jobs. At the same time, hospitals have had to pour resources into protecting both its employees and incoming patients from COVID-19 infection, Ku said. 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