California Gov. Gavin Newsom on Thursday approved new transparency requirements for the state's dominant health system, Kaiser Permanente.
It's a major win for a prominent health workers union that sponsored the bill amid an ongoing fight with the health system. Each of Kaiser's 35 California facilities will need to disclose its profits and its insurance arm will need to publish the reasons for any planned rate increases.
The bill's author, Democratic state Sen. Richard Pan, said the new law "arms employers and others with the information they need to fully understand why the cost of their health insurance with Kaiser Permanente may be rising."
Kaiser in a statement said it has always been "very transparent with the state," following all disclosure laws, and that under the new legislation state administrators will "receive even more detailed financial data from Kaiser Permanente."
"We look forward to working with the (Office of Statewide Health Planning and Development) to implement the new law," the statement said.
In a statement last week, Kaiser Permanente disputed the claims of Pan and the unions that they are exempt from disclosures that are mandated from other hospitals. The health system had asked for delayed implementation for the new quarterly reporting. However, according to Kaiser, the author and sponsor "inexplicably" rejected their request.
The bill's sponsor was the Service Employees International Union California, a powerful union that repeatedly pushes legislation and ballot initiatives in the state to target hospital profits.
The SEIU has engaged in a protracted dispute with Kaiser after a major labor rift last year pushed the union out of contract negotiations. The group then filed a complaint with the National Labor Relations Board. SEIU-United Healthcare Workers West, which falls under SEIU California, also launched and then withdrew a prospective ballot initiative to cap Kaiser's health plan premium increases.
Unions have also criticized the $11 billion in profits tax-exempt Kaiser has reported since 2017, and the $16 million salary of CEO Bernard Tyson.