California Limit on Prices Set by Private Hospitals (2012)

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A California Limit on Prices Set by Private Hospitals Initiative (#11-0082) had been approved for circulation in California as an initiated state statute. To earn a spot on the state's 2012 ballot, sponsors of the initiative would have had to collect 504,760 signatures.

SEIU, the primary sponsor of the initiative, announced in early May 2012 that they had reached a deal with California's hospital industry and as part of that deal, they had agreed to drop this initiative.[1]

If the initiative had qualified for the ballot and the state's voters had approved it, it would have:

  • Limited hospital charges to 125% of the hospital's good faith reasonable estimate of actual cost of service or item provided.
  • Required hospitals to give refunds when total charges for the year exceed 125% of total patient care expenses.
  • Adjusted charge limits as needed to account for hospital's losses from treating uninsured and low-income patients.
  • Required hospitals to provide new annual patient care expense and revenue reports.
  • Exempted children's hospitals, public hospitals, certain hospitals operated by health care plan providers, and certain nonprofit hospitals considered part of safety-net health system.
  • Authorized penalties for non-compliance.

The act, if approved, would have "sunset" after five years.[2]

11-0082's sponsors referred to it as the "Fair Healthcare Pricing Act of 2012."

Text of measure

See also: Ballot titles, summaries and fiscal statements for California's 2012 ballot propositions

Ballot title:

Limits on Hospital Charges. Initiative Statute.

Official summary:

"Limits hospital charges to 125 percent of hospital's good faith reasonable estimate of actual cost of service or item provided. Requires hospitals to give refunds when total charges for the year exceed 125 percent of total patient care expenses. Adjusts charge limits as needed to account for hospital's losses from treating uninsured and low-income patients. Requires hospitals to provide new annual patient care expense and revenue reports. Exempts children's hospitals, public hospitals, certain hospitals operated by health care plan providers, and certain nonprofit hospitals considered part of safety-net health system. Authorizes penalties for non-compliance."

Fiscal impact statement:

(Note: The fiscal impact statement for a California ballot initiative authorized for circulation is jointly prepared by the state's Legislative Analyst and its Director of Finance.)

"It is the opinion of the Legislative Analyst and Director of Finance that the measure could result in a substantial net change in state or local finances if adopted, given the magnitude of the changes proposed in this measure."

Support

Supporters

United Healthcare Workers West (a branch of the SEIU) sponsored the petition drive to qualify this initiative for the ballot.[3] The same group sponsored the collection of signatures to qualify an initiative that would have Mandated Charity Care by Non-Profit Hospitals.[3]

Arguments in favor

  • Dave Regan, president of the sponsoring organization SEIU-UHW, said, "Three quarters of the hospital industry pays no taxes. Companies that operate tax-free should not be permitted to overcharge consumers."[4]

Motivation

Randy Shaw, a progressive journalist, argued that "the likelihood of UHW qualifying and then passing these measures next November is virtually nil." Shaw believes that the SEIU-UHW's sponsorship of the initiatives is not intended to bring about victory for the initiatives; rather, it is intended to re-brand the union.[5] He writes:

"By appearing to place UHW in the vanguard of limiting health care costs and expanding health access, the measures refute charges that the union is too chummy with hospitals. And when the measures are described as part of a larger campaign that will 'recruit and train 250,000 more healthcare workers,' and 'deploy 10,000' of such workers in a 'massive statewide public education and action campaign,' UHW is trying to create the impression that it is building a mass movement for improved health care. But don’t expect to see these 10,000 UHW activists on the streets anytime soon...It’s hard to see how UHW can 'join' with hospital giants at the same time it is allegedly building a mass campaign to cut into their profits. But it is easy to see UHW dropping the initiatives as part of an overall 'deal' with hospitals, and then claiming it has won a huge victory for consumers. California’s future depends on voter approval of key initiatives on the November 2012 ballot to rebuild the state’s tax base and revenue stream. SEIU-UHW could be focusing on working with other unions on these broader goals, rather than squandering resources on what will be a failed attempt at union rebranding."[5]

According to the Los Angeles Times on March 10, "Unspoken in the public pitch was the fact that the measures, backed by the Service Employees International Union and aimed at private hospitals, would have a major effect on facilities the union has tried unsuccessfully to organize, while exempting those where many of its members work. Dignity Health, the state's largest hospital chain, and Kaiser Permanente, the largest HMO, would not be subject to the proposals. The measures would prohibit their private competitors from charging more than 25% above the actual cost of providing care and require nonprofits to devote at least 5% of their patient revenue to free care for the poor. The union represents nearly 60,000 workers in those two systems."[6]

Opposition

Jan Emerson-Shea, a spokeswoman for the California Hospital Association, said in March 2012, "This is really about a union using the initiative process to try to get targeted hospitals to buckle to their union demands."[6]

Path to the ballot

See also: California signature requirements

External links

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References