SEIU Seeks Hospital Price and Salary Caps on West Coast

The Service Employees International Union has threatened to introduce ballot measures in California and Oregon in an effort to cap hospital prices and executive salaries.

SEIU officials filed petitions with the respective states’ attorneys general early in November to add ballot initiatives to the November 2014 general election. The California initiatives would cap executives’ salaries at $450,000 per year, equal to the salary of the President of the United States, and would limit hospitals’ ability to upcharge for services to 25 percent above cost. SEIU claims that current charges are approximately 320 percent above cost. Hospitals would also be required to report their costs and expenses and would face fines for improper billing statements or failure to disclose that information.

The initiatives are the same in Oregon, with different specific caps: executive pay would be capped at 15 times the salary of the lowest-paid hospital employee, and service prices would be capped at 30 percent above cost. In addition, the Oregon ballot measures would include a requirement for non-profit hospitals to spent at least five percent of their revenue on charity care or community health. Both states’ proposed measures include a requirement to publicize the actual cost of routine procedures.

While the SEIU claims that these measures would improve the quality of care and reduce healthcare costs, hospital officials argue that they would not adequately address healthcare costs but would instead cut revenue and negatively impact the quality of care provided. The SEIU has offered to withdraw the petitions in both states if hospital industry executives will work with them. Any such arrangement would possibly include a neutrality agreement that would allow the union to organize hospital employees without interference from the hospital.

The Supreme Court is currently reviewing the validity of such neutrality agreements, and they are set to decide whether they violate labor laws regulating the exchange of “thing(s) of value” between businesses and unions. In the meantime, hospital administrators and SEIU representatives will prepare to throw millions of dollars into a possible ballot battle.

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