With steady jobs, plentiful insurance coverage, and high levels of payment reform and clinical integration, California’s capitol has long been a reliable market for health industry stakeholders. Providers are the most powerful drivers in the Sacramento healthcare market, where health systems are highly consolidated and operate tightly integrated networks of physicians. However, the rapid spread of COVID-19 has presented providers with new financial challenges. Sutter, one of the market’s biggest systems suffered $321 million in operations losses in 2020 due to a drop in patient service revenue and increased staffing costs amid. At the same time, California sued Sutter for anti-competitive practices and is being forced to change the way it contracts with insurers, leveling the playing field for rival systems. This could bring about a seismic shift in Sutter’s position as a dominant health system and UC Davis Health System could make gains.