"Sutter is a sprawling health care system that's the largest and most dominant provider in Northern California.

Xavier Becerra: They're like the bully on the block. They were able to bully everyone else to conform; it was my way or the highway.

The state's attorney general, Xavier Becerra, filed a civil lawsuit against Sutter in 2018. We interviewed him before the pandemic and before he was nominated for secretary of Health and Human Services.

Xavier Becerra: They were gobbling up hospitals. They were gobbling up physicians through these physician practices. They were just munching away, getting bigger and bigger.

Till they amassed a conglomerate of 24 hospitals, 12,000 physicians, and a string of cancer, cardiac and other health care centers.

Xavier Becerra: Sutter got big enough that it could use its market power to dominate, to dictate. It was abusing of its power.

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.

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.

Lesley Stahl: I actually heard that it costs more to deliver a baby here in Sacramento than anywhere else in the entire country.

Xavier Becerra: Why Sacramento should be the most expensive place to have a baby-- there's no way to explain it.

Caring for a premature baby in Northern California, for example, costs about $605,000. In Southern California: $343,000. In all, he says, the average cost of in-patient care in Northern California is 70% higher than in Southern California.

Lesley Stahl: When you did the investigation, did you look at other variables that might have been the reason for the higher prices? Quality might have been better? Maybe equipment was better? Did you take all that into consideration?

Xavier Becerra: That's why this investigation took years, because you have to eliminate all the other reasons that might be out there. And you can't explain it away by the cost of living, cost of labor.

Lesley Stahl: Or quality of care?

Xavier Becerra: Or quality of care.

Lesley Stahl: It's just Sutter hiking prices.

Xavier Becerra: It's domination of the market. "