Edhat Staff
By the edhat staff
Sansum Clinic, the largest health care nonprofit in Santa Barbara County, announced Friday it entered into exclusive negotiations for acquisition by Sutter Health, a large Northern California health system.
The “strategic partnership” includes signing a non-binding letter of intent with a formalized partnership expected in the coming weeks. Sutter Health will be Sansum’s new owner, although the clinic will continue to manage itself.
“We look forward to a structured integration process designed to strengthen our ability to bring more resources to meet the healthcare needs of our patients and provide them a more connected, seamless experience,” the healthcare companies stated in an open letter to the community.
Sutter Health is a Sacramento-based nonprofit that owns 23 hospitals, 33 ambulatory surgery centers, 8 cardiac centers, 11 cancer centers, and 5 trauma centers with more than 53,000 employees.
Sutter Hospital Association was founded in 1921 as a response to the 1918 flu pandemic. Named for nearby Sutter’s Fort, its first hospital opened in 1923. Later known as Sutter Community Hospitals, the organization eventually merged with several struggling hospitals in the surrounding area. Sansum Clinic itself celebrated its 100th year in operation as a nonprofit healthcare provider.
While Sutter Health is prevalent in Northern California, this will be the farthest south they’ve ventured with their next closest clinic located in Santa Cruz.
Sutter Health (courtesy)
Sansum Clinic has been looking for a new owner for the past two decades with Cottage Health being the obvious choice, although the federal government twice blocked a merger between the two local healthcare companies.
Sansum CEO Kurt Ransohoff stated the pandemic took a toll on the clinic’s finances along with Medicare reimbursements decreasing and UCLA Health moving in to offer care alternatives, reports Nick Welsh at The Independent.
“As health systems across the country face increasing industry and financial headwinds, from increasing labor and supply costs to caring for an aging population, this partnership provides us the resources necessary to invest in best serving our patients and communities for generations to come,” the joint statement said.
In 2019, Sansum’s gross revenue was just over $344 million with total salaries taking up over $87 million. The top seven administrators earned a combined annual salary of over $2.2 million, according to tax records.
Ransohoff also stated to The Independent the clinic expects to add more primary care doctors to lessen the clinic’s long wait times while Sutter has plans to spend $800 million expanding outpatient services and care throughout the state.
In 2019, Sutter Health agreed to pay $575 million in settle an antitrust lawsuit to resolve allegations of anti-competitive behavior brought by then California state attorney general Xavier Becerra as well as unions and employers.
In addition to the settlement amount, Sutter will be prohibited from engaging in several practices that the state attorney general said the hospital system used.
“It will be barred from so-called ‘all or nothing,’ agreements, which the attorney general said required insurers to include all of Sutter’s medical facilities if they wanted to include some of the system’s hospitals. And it will be required to limit what it can charge patients for out-of-network services, which the state said would prevent people from facing surprise medical bills,” according to the New York Times.
Sutter Health did not acknowledge wrong doing in this matter and also said it never required insurers to agree to “all or nothing” arrangements.
The northern California health giant reportedly earns $14 billion per year in revenue.
Still shocked that an administrator can make more than a doctor
Now I know why they pay employees so little.
I know care givers who work for Sutter Health. This merger is unhealthy for Santa Barbara! Sutter is a for profit company and pushes the limits as to care giver ratios to patients. The people in our area who use Sansum will suffer the consequences of this merger. A sad day for health care in our area. Watch and see what happens when you try to get a doctor’s appointment and you are told that one is available in several months. You saw it here first! Remember what I wrote here!
I’m a current patient with Sansum and I LOVE my PCP but it already takes several months to get an appt. The merger may actually attract more healthcare professionals to SB and ultimately improve the care in SB. You are wrong on a lot of points and your kind of paranoid comments aren’t good for anyone.
A-1683420466 remember how many misstatements you can make in one posting? Will do! Also strange is “remember what I wrote here” – you don’t even have a handle just some random number that’s always different.
Sutter Health is a not-for-profit organization, as stated on their website — https://www.sutterhealth.org/about
5:47 poster: Sutter is a non-profit. Sansum patients already wait several months for an appointment. Hard to believe it could be worse!
I am wrong! Sutter is a non-profit, but in more ways than this title. I stand behind my other comments about its sevices.
Please read this:
https://www.healthcaredive.com/news/nonprofit-break-off-drives-sutter-to-net-loss-as-system-faces-year-full-of/623330/
Mtn Driver. It already takes several months for Sansum patients to get an appointment with a Doctor, even for a routine physical. We all hope the financial strength of Sutter will help the struggling local health care operation.
Still hoping UCLA Health continues to expand up here.
UCLA is definitely continuing to expand, much larger facility coming soon with a wider range of specialties, and who knows there may even be a new hospital in Goleta.
I posted once about how UCLA works and you din’t post it.
UCLA is just as bad as Dignity, maybe Sutter etc..
There is alack of exposure around here for them, and that’s what I care about. Cottage has always been good to me so, I hope they don’t fall under the ax of some unknown consolidation.
I plan to leave Sansum Clinic and take my care elsewhere.
I’ll give them a chance – my physician reached out to me (both by phone and by message).
UCLA has just opened their second clinic here and offer a viable alternative.
Only a Native can Heal another Native..
Will Sutter pay a $20 hr minimum wage like Cottage? Wonder how much Charity work Sutter will do to support the local community?
Workers can make more at Habit Burger than at Sansum Clinic for entry level jobs.
Sansum doesn’t pay $20, the should be ashamed of what the pay office employees.
I have given up on Sansum because of the length of time it takes to get an appointment. It is the Neighborhood Clinics or nothing, mostly the latter. We over-medicate in this country. (I am lucky to have so far nothing serious.)