Healthcare workers submit bold voter initiative package to rein in healthcare costs, ensure charity care for the neediest

Press Release: Wednesday, November 23, 2011
Contact: Elizabeth Brennan at (213) 999-2164

California healthcare workers filed two statewide ballot initiatives with Attorney General Kamala Harris’s office Wednesday, Nov. 23 that give consumers needed transparency on hospital costs, end overcharging for hospital services, and ensure increased charity care for the neediest.

The package of initiatives was submitted by members of SEIU-United Healthcare Workers West (SEIU-UHW).

“Three quarters of the hospital industry pays no taxes,” said Dave Regan, president of SEIU-UHW. “Companies that operate tax-free should not be permitted to overcharge consumers, and they should be required to meet their charitable duty by providing a reasonable level of services for prevention, treatment and wellness to those in need.”

The initiatives will appear on the general election ballot in November 2012. They will help consumers by ensuring that hospitals live up to their commitments to the communities where they operate:

– The Charity Care Act of 2012: Sets the minimum level of charity care at 5 percent of patient revenue that nonprofit hospitals must spend on healthcare for the needy in exchange for not paying state and local taxes.

– The Fair Healthcare Pricing Act of 2012: Prohibits all hospitals from charging more than 25 percent above the actual cost of providing patient care. On average, California hospitals charge 450 percent, and as much as 1,000 percent, more than the actual cost of providing care when they treat patients in their facilities. Insurance companies and the uninsured are often left to deal with vastly inflated bills that drive up the cost of healthcare for everyone.

“As healthcare workers we want to make a difference,” said Nisa Walker, an SEIU-UHW member and healthcare worker in Sacramento. “These initiatives give consumers transparency and increase care for the needy. It is exactly what we should demand and expect from healthcare companies we exempt from taxes because they have a charitable mission.”

Taken together, the ballot measures address the root causes of annual skyrocketing premiums that average almost 10 percent. Currently health insurance costs consumers more than $15,000 each year for family coverage and exceeds 20 percent of income for Californians.

The initiatives would infuse nearly $1.7 billion into the California economy and use existing government departments for enforcement.

Currently there are no set requirements for how much charity care a nonprofit hospital must give in order to receive tax exempt status even though the non-profit hospital industry is holding more than $42 billion in reserves. The “fair pricing” measure would require all hospitals to charge patients reasonable rates based on the actual cost of providing care — putting an end to price gouging.

In 2010 California hospitals charged patients a total of $249 billion — even though all of California hospitals’ expenses amounted to just $54 billion. For example, in 2010 Olympia Medical Center, a privately-owned for-profit hospital in Los Angeles, charged patients a total of $979 million, even though the hospital’s total expenses were only $95 million that year — an average of 1,029 percent of the actual cost of providing care.

The ballot initiatives are one piece of “Let’s Get Healthy California!” Under this banner healthcare workers will negotiate contracts, introduce legislation and work with partner organizations to improve the quality of healthcare, lower healthcare costs and improve healthcare jobs.

SEIU-UHW members are committed to building a team of 10,000 healthcare workers to launch a massive education program in the state focused on wellness and preventive care, and to help prepare for the increasing healthcare demands of an aging population.

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