California Charity Care Provided by Non-Profit Hospitals (2012)

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A California Charity Care Provided by Non-Profit Hospitals Initiative (#11-0081) 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:

  • Required nonprofit hospitals to provide free health care to needy patients in an amount annually at comes to at least 5% of their net patient revenues.
  • Exempted hospitals where minimum charity care would result in operating margin less than 1%, and hospitals that are part of certain large nonprofit health systems.
  • Required nonprofit hospitals to give annual reports to the Attorney General of California on the charity care they provided during the year.
  • Authorized penalties for non compliance, including revocation of tax-exempt status and the appointment of a representative of the state's Attorney General to the hospital's board of directors.
  • Made nonprofit director/officer liability protections inapplicable to enforcement actions.

Non-profit hospitals in California are not currently required to provide a specific amount of charity care.[2]

Text of measure

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

Ballot title:

Nonprofit Hospitals. Required Minimum Charity Care. Initiative Statute.

Official summary:

"Requires nonprofit hospitals to provide free health care to needy patients in amount annually at least 5 percent of their net patient revenues. Exempts hospitals where minimum charity care would result in operating margin less than 1 percent, and hospitals that are part of certain large nonprofit health systems. Requires nonprofit hospitals to give Attorney General annual reports on charity care provided. Authorizes penalties for non compliance, including revocation of tax-exempt status and appointment of Attorney General representative to hospital's board of directors. Makes nonprofit director/officer liability protections inapplicable to enforcement actions."

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.)

"Potential increased costs to state and local governments, at least in the millions of dollars annually through 2017, associated with potentially increased premiums for government-purchased health insurance. Potential local government savings, at least in the low millions of dollars annually through 2017, from uninsured persons accessing health care services at certain nonprofit hospitals instead of at government-funded, public hospitals."

Support

Supporters

United Healthcare Workers West (a branch of the SEIU) was the sponsor of the petition drive to qualify this initiative for the ballot.[3] The same group was sponsoring the collection of signatures to qualify an initiative that would have Limited Prices Set by Private Hospitals.[3]

Arguments in favor

  • Dave Regan, president of the sponsoring organization SEIU-UHW, said, "Companies that operate tax-free...should be required to meet their charitable duty by providing a reasonable level of services for prevention, treatment and wellness to those in need."[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

Supporters of the initiative had said in February 2012 that they expected to file the required signatures by April 1, 2012.[7]

External links

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References