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FOUNDATION HEALTH: SUTTER HEALTH DEMANDS UNREASONABLE RATE INCREASES FOR SERVICES TO FOUNDATION MEMBERS

 SACRAMENTO, Calif., Nov. 25 ~PRNewswire~ -- Foundation Health today issued the following statement:
 Foundation Health (NYSE: FH) today challenged Sutter Health to accept responsibility for controlling its rising hospital costs and negotiate reasonable increases for Foundation Health.
 A contract proposal was rejected by Foundation Health when Sutter refused to lower its demands for price increases up to 60 percent for inpatient services and outpatient surgery to Foundation Health. Sutter Health is one of the most expensive hospital systems in the area and its proposed increases would make it even more difficult to control health care costs.
 "Foundation Health is a managed care company that takes very seriously its mission to provide high-quality care and keep health care costs down, not drive them up as Sutter is demanding," said Garry Garrison, vice president of Health Affairs. "We would like to reach an agreement with Sutter, but we are in a recession, times are tough and we cannot in all conscience ask our members to shoulder premium increases due to Sutter's outrageous price increase demands.
 "We believe Sutter is already a high-cost operation and they need to become more efficient," Garrison said. "There is no need for Sacramentans to pay more for a day at Sutter and reward their management's expansion tactics and inefficiencies with higher and higher reimbursements. Sutter wants to be reimbursed for its costs and receive a profit. Their costs are already too high and they receive tax benefits by being not-for-profit. Sutter has incurred enormous capital costs in recent years due to an expansionary profile. A significant part of their expansion has been away from its core Sacramento service area," Garrison said.
 For the past several years, Foundation Health has had a contract with Sutter for hospital services. That agreement expires on Dec. 31, 1992, and a new agreement has been under negotiation for the past several months. Sutter has refused to lower its rate increase demands of up to 60 percent, despite the fact that they are far beyond increases in the overall medical cost inflation rate.
 If no contract agreement is reached before the end of the year, Foundation Health members will continue to be able to receive uninterrupted, high-quality care at Mercy Hospitals and the many other facilities with which Foundation has excellent provider relationships.
 "Our mission at Foundation Health is to provide care to our 160,000 Sacramento area members that is not only high-quality, but affordable as well," said Garrison. "We have a responsibility to our members to keep health care costs down, and that means maintaining a posture that Sutter as well as other providers have to control their costs as well.
 "Foundation takes its role of providing high-quality, cost- effective, accessible care very seriously," Garrison added.
 Sutter Health made tens of millions of dollars when it sold its shares of Foundation Health Corp. stock, allowing Sutter to buy interests in hospitals and medical groups up and down the state.
 -0- 11~25~92
 ~CONTACT: Kurt Davis of Foundation Health, 916-631-5288~
 (FH)


CO: Foundation Health Corp.; Sutter Health ST: California IN: HEA SU:

SG-GT -- SF013 -- 1716 11~25~92 20:38 EST
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Publication:PR Newswire
Date:Nov 25, 1992
Words:519
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