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A Sutter Health hospital in Berkeley, Calif. Photo: Smith Collection/Gado/Getty Images

Sutter Health, a not-for-profit system of hospitals and physician groups in California, has agreed to pay employer health plans $575 million as part of a settlement to clear allegations that it illegally hiked prices and stymied competition by abusing its market power.

Why it matters: This case has lingered for years, and when combined with the settlement's other conditions, it is one of the most aggressive instances of law enforcement cracking down on the negotiation practices and competitive structure of dominant hospital systems.

Details: The terms of the deal were not released when a settlement was first announced in October. Overall, the employer and union plaintiffs in this class-action lawsuit aimed for almost $1 billion in damages, instead settling for $575 million. But they are also getting other stipulations.

  • Sutter can no longer force health insurers into "all-or-nothing" contracts, which require insurers and employers to include all Sutter facilities and providers in their networks regardless of whether Sutter's providers had higher prices or poorer quality.
  • There will be caps on Sutter's out-of-network rates, and Sutter's list price hikes will be "limited" for the next five years.
  • A court-appointed monitor will make sure Sutter complies with all settlement terms for the next 10 years, and possibly another three years thereafter.

The big picture: Hospital systems like Sutter have grown over the years due to heavy consolidation, which has turned many hospital markets into monopolies or oligopolies.

  • In turn, hospitals have had the power to dictate contract terms that heavily favor them and often result in higher prices and insurance premiums.

What they're saying: Sutter submitted a statement to Axios that said the system did not admit to any wrongdoing, and the settlement "enables Sutter Health to maintain our integrated network and ability to provide patients with access to affordable, high-quality care."

Go deeper: California hospital system destroyed antitrust evidence

Go deeper

UN poll: Most see climate change as global emergency amid pandemic

Swedish climate activist Greta Thunberg (C) fronts a Fridays For Future protest at the Swedish Parliament in Stockholm in September. Photo: Jonathan Nacksrtrand/AFP via Getty Images

64% of people from around the world say climate change is a global emergency, a United Nations poll published Wednesday finds.

Why it matters: It's biggest global survey on climate change ever conducted, with some 1.2 million participants from 50 countries — including the U.S. where 65% of those surveyed view climate change as an emergency.

Collins helps contractor before pro-Susan PAC gets donation

Sen. Susan Collins during her reelection campaign. Photo: Scott Eisen/Getty Images

A PAC backing Sen. Susan Collins in her high-stakes reelection campaign received $150,000 from an entity linked to the wife of a defense contractor whose firm Collins helped land a federal contract, new public records show.

Why it matters: The executive, Martin Kao of Honolulu, leaned heavily on his political connections to boost his business, federal prosecutors say in an ongoing criminal case against him. The donation linked to Kao was veiled until last week.

How cutting GOP corporate cash could backfire

Illustration: Aïda Amer/Axios

Companies pulling back on political donations, particularly to members of Congress who voted against certifying President Biden's election win, could inadvertently push Republicans to embrace their party's rightward fringe.

Why it matters: Scores of corporate PACs have paused, scaled back or entirely abandoned their political giving programs. While designed to distance those companies from events that coincided with this month's deadly siege on the U.S. Capitol, research suggests the moves could actually empower the far-right.