Union Shelves Hospital Ballot Initiatives

Two ballot initiatives that would have capped both what not-for-profit hospitals could charge patients and how much they can pay its executives were officially shelved by their sponsor earlier this week in lieu of a closer alliance with the California Hospital Association. 

The Service Employees International Union-Healthcare Workers West had been gathering signatures for the two initiatives, which were due to the Secretary of State's office later this month, to place them on November's ballot.

But at a joint press conference Tuesday whose tone was more resigned than optimistic, SEIU-UHW President Dave Regan said that joining forces with the CHA made more sense than continuing to engage in an adversarial relationship, which he termed a “zero-sum game.”

Regan, whose union sponsored a successful 2012 ballot initiative to place salary caps on executives with the district-owned El Camino Hospital, said such an alliance made more sense in a time of dwindling union membership, and that it would provide more job security for his union's 150,000 members, of whom about 60% are in California.

Regan refused to say how the two initiatives had been polling with voters. “It's moot now,” he said in light of an agreement having been reached.

Sources indicated that the CHA, which represents a large majority of the state's hospitals, had prepared to spend at least $62 million to oppose the patient charge initiative. That would have prohibited acute care facilities from charging no more than 25% above their actual cost. 

If passed and implemented, such a cap was estimated by CHA to cut at least $12 billion a year from hospital revenues and likely lead to significant job cuts.

Sources said the CHA was apparently prepared to spend less on the salary cap initiative because officials with the lobbying group were confident that if approved it would be overturned in court (the El Camino salary cap remains in stasis due to ongoing legal battles). 

But both Regan and CHA President C. Duane Dauner indicated that at least $100 million would have been expended by election day if the initiatives went to voters.

"If we moved forward with the initiative war it would have been a catastrophe for both organizations," Dauner said.

It's not the first time both sides have tried to make amends after the union sponsored ballot initiatives. 

In 2012, the SEIU-UHW agreed to drop a pricing initiative similar to the one it was pushing this year, and another that would have required hospitals to spend a minimum of 5% of its revenues on charity care after the CHA agreed to lend a hand in the union's organizing efforts.

Both Regan and Dauner said the latest agreement was more significant than the 2012 pact because hospitals have to pledge their support individually this time around.

Although the latest agreement was kept under seal, both sides disclosed that it included a “code of conduct” expected to civilize dialogue between the two parties. Several news outlets also suggested that it would make it marginally easier for the SEIU-UHW to organize and collectively bargain with the hospitals that signed on to the agreement, although Regan and Dauner did not disclose any details regarding organizing on the hospital level.

The pact also includes establishing a $100 million “joint advocacy fund” that would be used to lobby for increases in Medi-Cal payments. 

California's providers currently receive the second-lowest reimbursements in the nation from the Medicaid program to care for their patients. in the nation. “This will be accomplished by identifying new resources and financing approaches at the federal and state levels, including educational activities, legislative and regulatory efforts, a ballot initiative, or other strategies,” a statement issued by the CHA and union said.

CHA will likely qualify for the November ballot an initiative that would extend a hospital bed tax to leverage greater Medi-Cal payments indefinitely. Both Regan and Dauner said they would jointly pursue an initiative for the 2016 ballot if necessary in order to continue to preserve or beef up Medi-Cal payments.

Dauner also said the two sides would engage in greater efforts regarding the pricing and affordability of healthcare to California's consumers. However, he bristled when reminded of the CHA's past attempts to block or criticize price transparency initiatives. 

In 2008, the CHA lined up against a bill that would have eliminated the use of “gag clauses” that keep pricing arrangements between health plans and hospitals confidential. And the CHA was also critical of the federal government’s decision last year to release Medicare pricing and payment data for individual hospitals, saying it might confuse the public.

“The CHA has opposed any (transparency initiative) that does not give consumers meaningful information,” Dauner said, adding that hospitals currently are required to publicly file their chargemaster lists with the Office of Statewide Health Planning and Development. Chargemasters are not reflective of what commercial and government payers such as Medicare actually reimburse hospitals for services, and media figure Steven Brill concluded in a landmark Time magazine article last year that they were generally useless for consumer use.

Meanwhile, the new pact was blasted by the National Union of Healthcare Workers, a smaller but rival organization to the SEIU-UHW that also has backing from the California Nurses Association, considered a hard-nosed negotiator for its members, and the AFL-CIO.

“This agreement will undermine the rights of workers and will eliminate the union's watchdog role on behalf of patients,” said NUHW President Sal Rosselli,

who also criticized the pact’s confidentiality. surrounding the pacts. “The details would show that in return for adding new members to their rolls, SEIU agreed to become a company union. Moving forward, SEIU will quietly collect dues, but will do little to raise questions.”