Union seeks salary and pricing limits for Calif. not-for-profit hospitals

A union representing California healthcare workers is seeking to put two initiatives on next year's November ballot that would restrict salaries at not-for-profit hospitals and limit how much those hospitals can charge patients.

The proposed petitions were filed Friday with the state attorney general's office.

One would prohibit hospitals from charging more than 25% above their cost of providing patient care. The union, SEIU-United Healthcare Workers West, says state hospitals charge an average of 320% more than their actual cost, driving up costs throughout the healthcare system.

The second initiative would cap annual salaries for not-for-profit hospital executives at $450,000, the amount paid to the president of the United States. The union says the annual pay for the 10 highest paid not-for-profit hospital executives in California averaged $2.6 million in 2011, with one executive drawing more than $7.8 million.

Jan Emerson-Shea, a spokeswoman for the California Hospital Association, said the association is disappointed that the initiatives were filed.

"They put a cloud over the accomplishments that have been mutually beneficial to healthcare workers, hospitals and patients," she said in an emailed statement.

The union contends the two initiatives, if approved by voters, would reduce hospital prices in California by at least $2.5 billion a year.

Union spokesman Sean Wherley said the initiatives target not-for-profits, and not all hospitals, because the not-for-profits have an obligation to serve their communities.

"In return, they don't have to pay taxes, and yet they're acting with little regard for the communities they're supposed to serve," Wherley said.

The proposed petitions will receive a title and summary from the attorney general's office before they are submitted to the secretary of state's office and the unions can begin gathering signatures.

SEIU is acting after another union-driven attempt to restrict charges by not-for-profit hospitals fizzled this year in the state Legislature.

AB 975, sponsored by the California Nurses Association, would have required a not-for-profit hospital to show why it should keep its not-for-profit status if its revenue exceeded spending by more than 10%. The bill by Democratic Assemblymen Rob Bonta of Oakland and Bob Wieckowski of Fremont fell short in a 28-38 Assembly vote in May.

Not-for-profits can be granted an exemption from paying state corporate income tax and local property taxes based on factors that include how its earnings are distributed.

Private not-for-profit hospitals are required to review their community's needs every three years and report annually on how they attempt to meet those needs. But a state audit last year found that nearly 7% did not submit the required annual report.