Anthem, Dignity Reach Agreement: Deal Runs Through April 2025 Rates Dispute Left One Million Californians in Limbo, By Jondi Gumz

COMMUNITY NEWS Anthem, Dignity Reach Agreement

Deal Runs Through April 2025; Rates Dispute Left One Million Californians in Limbo

By Jondi Gumz

On Aug. 16, a battle between two health care giants over costs that left a million Californians scrambling for doctors — many in Santa Cruz County — ended peacefully with a multiyear agreement.

The agreement is retroactive to July 15, 2021, and expires April 30, 2025, giving some peace of mind to people paying for an Anthem health plan to see Dignity Health doctors and get treatment at Dignity Health Dominican Hospital in Santa Cruz at lower “in network” rates.

Without an agreement, people paying premiums to Anthem would have had to pay higher “out of network” rates to keep seeing their doctor and access Dominican Hospital. Some had procedures cancelled; others put off doctor visits, a stressful (and not very healthy) situation for all involved.

Anthem, which is for-profit, and Dignity Health, part of the nonprofit CommonSpirit, were negotiating reimbursements to be paid to doctors and hospitals.

Anthem blamed Dignity Health, releasing a statement that Dignity rates were “almost 30 percent more expensive than other health systems,” and that “giving in” would mean higher out-ofpocket costs and premiums.

Dignity Health disputed the claim by citing a RAND study focused on 2016 to 2018 found eight other hospital systems in California have higher rates than Dignity Health.

The RAND study reported inpatient and outpatient rates combined at Dominican Hospital were 409 percent of Medicare rates, Stanford, 363 percent, Sutter Coast Hospital, 427 percent, and Sharp Chula Vista Medical Center, 461 percent.

Dignity Health also posted that Anthem exceeded Wall Street expectations when its first-quarter profit was a record $1.7 billion.

It’s hard to tell if one side gave in because neither side provided details.

Anthem’s announcement mentioned “affordability” for consumers.

“While we understand this wasn’t easy for consumers, it was necessary for us to stand firm as part of our efforts to help slow the sharp rise in health care costs,” said John Pickett, Anthem’s regional vice president of provider solutions, in a post online. “We value our relationships with providers, which are important to creating choices for our consumers and fulfilling our mission of improving lives and communities. Our members remained our No.1 priority as we worked hard and in good faith to find common ground and reach an agreement with Dignity that helps protect affordability.”

In a statement, Dr. Robert Quinn, CEO of the Dignity Health Medical Foundation in Santa Cruz, called it “a win for our patients.”

In a statement posted at KeepDignity Health.org, Dignity said, “We know these negotiations were stressful for our patients, our medical staffs, the communities we serve, and our own team. We sincerely appreciate patients’ understanding during the negotiations.”

Dignity Health acknowledged “a brief out-of-network period,” noting “the new agreement is retroactive to July 15, the date the previous contract expired, and any care received since July 15 will be considered in-network. In anticipation of reaching an agreement, we held Anthem claims, so patients should not experience any impact on their bills.”

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