Reining in Healthcare Costs and Expanding Care Questions & Answers on the SEIU-UHW Ballot Initiatives
Healthcare workers are taking the lead on reining in healthcare costs and improving the healthcare system for all Californians. We’re working to pass two ballot initiatives that take on the biggest healthcare problem in California: high cost. Together, these intitiatives ensure fair hospital pricing and limit excessive executive salaries in hospitals so that money can go to improve care and make healthcare affordable. They will have a bold impact on how healthcare is delivered for the majority of Californians.
Based on data from the California Office of Statewide Health Planning and Development (OSHPD) and other sources, the fair pricing and executive compensation initiatives will lower the prices that hospitals in California charge by at least $2.5 billion a year.
In 2012, California hospitals billed patients a total of $249 billion – even though all of California hospitals’ expenses amounted to just $54 billion. Family health insurance premiums in California went up 52 percent between 2003 and 2010 and now exceed 20 percent of income, according to an analysis by the Commonwealth Fund, a philanthropic research group, released in November 2011.
Why is SEIU-UHW doing this?
California is a leader when it comes to bold, important change, and healthcare workers in California want to help show America how to provide higher quality, lower cost healthcare to more people. The 150,000 healthcare workers in SEIU-UHW have made a fundamental and long-term commitment to improving the healthcare system for everyone.
The SEIU-UHW Executive Board has consistently recognized that the healthcare system as it is right now is on an unsustainable path. The Board has made a commitment to put SEIU-UHW on a track to transform the union to improve the lives of members and the health of all Californians, and ensure our healthcare system is built to produce better results at a lower cost.
Isn't this just about enhancing your contract bargaining?
No. We are perfectly capable of negotiating new union contracts and over the last four years have successfully bargained contracts for members across California. The initiatives are about healthcare workers taking responsibility for the collective health of Californians. But contract negotiations are an opportunity to engage the industry in a forward-looking plan to transform healthcare in our state.
We are focused on building the healthcare system of the future and we are using these initiatives, contract bargaining and other strategic ideas to achieve that goal.
What do you expect the industry reaction to be?
The healthcare industry will fight tooth and nail to preserve the status quo, but the status quo is not helping Californians live healthier lives, save money or increase coverage. The industry will make a lot of claims, but the bottom-line is that healthcare companies are not delivering what the public needs: They are overcharging and paying executives as much as $8 million a year, while millions of Californians get priced out of affordable healthcare
Healthcare is a huge and growing industry. The California hospital industry is in better shape now than any time in recent history. According to data from OSHPD, the hospital industry had net income of more than $4.1 billion in 2010. Its operating margins in 2010 were more than 575 percent higher than 2006, before the Great Recession. Additionally, hospitals in California hospitals have reserves of more than $42 billion – an amount equivalent to more than half the state’s general fund budget.
Your proposals will take billions out of healthcare, one of the few growing parts of our economy. Won't this be a jobs killer?
No. By 2030, the state's population will grow by 10.2 million and the number of people over age 65 will more than double. As California's population grows bigger and older, the growth in healthcare jobs will continue. The initiatives take on the a major problem in healthcare by reducing what hospitals charge so that more people have access to affordable care. Regardless, healthcare is a growing field in need of hundreds of thousands of new healthcare workers over the next ten years to account for turnover, retirement and newly created healthcare jobs.
Many of the changes that will soon go in to effect as a result of Obamacare were aimed at expanding coverage and reducing costs. Are these initiatives even necessary?
The Affordable Care Act expands coverage to nearly all Californians, but even optimistic projections say only about 2 million of California's 7 million uninsured will get coverage in the first few years, and millions of undocumented residents are ineligible for Obamacare altogether. These initiatives would help protect the insured and uninsured from high healthcare costs and ensure greater access to high quality and affordable care. Obamacare expands coverage, and these initiatives working in tandem will make the California system work even better for the consumer.
Why ballot measures and not legislation?
The hospital industry is very content with the status quo and it wields a great deal of influence in the legislature. We believe the only way that consumers will have any voice is through the ballot initiative process.
Additionally, to ensure there no unintended consequences, the legislature can amend these initiatives.