Calif. Union Seeks To Limit Health Care Costs With Two Ballot Measures

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Wilfredo Lee / AP

A California labor union is collecting signatures for two ballot measures. One would limit the amount hospitals could charge patients to 25 percent above actual costs. The other would cap CEO salaries at non-profit hospitals at $450,000 dollars.

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Friday, February 21, 2014

UCLA health care economist Dylan Roby says the charge cap would only help the uninsured, because insurers typically negotiate charges down.

"The ability to have more transparency in pricing will be much better," Roby says. "But it still won’t reign in any other part of health care spending because typically that 25 percent cushion they’re getting is more than Medicare, Medi-Cal and private insurers are paying in the first place.”

Roby says average pay of non-profit hospital CEOs is about $600,000 nationwide. He says capping salaries wouldn’t necessarily bring health care savings.

“I do think limiting hospital pricing could bring down health care costs. It’ just that I don’t think making people set the charge master at 25 percent over actua," says Roby costs doesn’t necessarily fix hospital pricing.”

The Service Employees International Union’s Dave Regan says hospitals are the biggest driver in health care spending.

“There’s a culture of pricing, and doing business that has just lent itself to driving the cost of care up,” says Regan.

But hospitals say capping hospital charges could force cutbacks in staff and services. And Jan Emerson Shea at the California Hospital Association says the CEO salaries are justified.