In November 2013, Service Employees International Union-United Healthcare Workers West (SEIU-UHW) filed two anti-hospital ballot initiatives. The first initiative would limit not-for-profit (NFP) hospital/health systems executives’ total compensation (salary, bonus, pension, etc., excluding health and disability insurance) to $450,000 per year. The second initiative would cap for-profit and NFP hospitals’ (excluding children’s hospitals) prices to every patient at 25 percent above the cost of services or items rendered to the patient, and annually, would cap revenues from every payer at 25 percent above cost. Retroactive recoupment payments from hospitals would be required for each patient where revenue (usually from a third-party payer) exceeded 25 percent above cost. Needless to say, these initiatives are devastating to NFP hospitals (both initiatives) and to for-profit hospitals (pricing initiative).

This is nothing more than a union power play. As major news outlets have reported, these measures represent a new type of “corporate campaign” whereby one labor union is attempting to leverage hospitals in order to serve its own self-interest — to increase union membership — not to serve the public’s interest. SEIU is seeking neutrality-based elections in targeted hospitals for 100,000 non-union employees. SEIU organizing campaigns would be conducted under a Code of Conduct that governs the actions of both parties (hospital and SEIU).

The magnitude of this two-front campaign cannot be understated. If the initiatives are approved by the voters, hospitals could not operate as they do now. It would be necessary for hospitals to restructure their business model and services provided. Additionally, hospitals would be faced with unprecedented decisions — “Which services must be eliminated or cutback?”; “How can the hospital operate without departmental cross-subsidization?”; and “How can strategic planning be conducted in a world of oppression and uncertainty?”

CHA has launched its own counter-initiative website, www.stopinitiativeabuse.com. The coalition sponsoring the hospitals’ opposition campaign is “Californians Against Initiative Abuse.”

If the pricing/revenue initiative passes, it will cause private (NFP and for-profit) hospitals to lose up to $12 billion annually in current revenues. This represents nearly a 20 percent cut in NFP and for-profit hospitals’ annual net patient revenue. Such a cut is intolerable. Consequences include: loss of thousands of jobs; reduction or closure of hospital services; restrictions on access to services; deferral, reduction or elimination of capital projects (forcing closures due to seismic compliance deadlines); downgrades in hospitals’ bond ratings or ability to access capital; loss of stock value and ability to access capital; defaults and bankruptcies; higher costs because of capital and investment market responses; and loss of community hospital services to all Californians.

Hospitals have reported that more than $8 billion of construction projects would be halted or delayed. This could mean the loss of approximately 40,000 construction jobs representing billions of lost wages in California’s economy.

The executive compensation initiative is so restrictive that superior executives will leave California, creating a management crisis. Hospital organizations will suffer and patient care will be compromised. The interests of Californians will not be well-served.

Hospitals have no choice. Losing our opposition campaign is not an option. Otherwise, hospital care in California will become a wasteland if the pricing initiative passes. The aftermath will be felt for decades.