Budget leaders announce support to reduce hospital costs, salaries in California

[Feb. 6, 2014] SACRAMENTOTwo prominent members of the California legislature, Senate Budget Committee Chairman Mark Leno and Assembly Budget Committee Chairwoman Nancy Skinner, are throwing their support behind two ballot initiatives that will rein in healthcare costs and reduce excessive CEO and executive salaries in California hospitals.

Leno (D-San Francisco) and Skinner (D-Berkeley) believe it’s time to put limits on hospital pricing and million-dollar-plus salaries that are putting healthcare out of reach for many Californians. They join nearly a dozen state legislators who have endorsed the measures in the past few days, with more on the way.

“High healthcare costs affect everyone, whether they have insurance, are uninsured, or are covered by Medicare or Medi-Cal,” Leno said. “We can do better, and these initiatives will bring down hospital costs, increase access to care, and make Californians healthier. It’s a win win.”

The two initiatives are sponsored by members of SEIU-United Healthcare Workers West, the state’s largest union of hospital and other healthcare workers. More information is available at www.HealthCareCosts2Much.org.

The initiatives are:

  • Charitable Hospital Executive Compensation Act of 2014: Prohibits nonprofit hospital executives in California from receiving more than $450,000 in annual compensation – the same amount received by the President of the United States. Many top executives in the state’s non-profit hospitals make more than a million dollars a year.
  • Fair Healthcare Pricing Act of 2014: Prohibits hospitals from charging more than 25 percent above the actual cost of providing patient care. On average, California hospitals charge 320 percent more than the actual cost of providing care in their facilities.

According to the Office of Statewide Health Planning and Development, California hospitals subject to this ballot initiative charged $233.8 billion in 2012 – even though their operating expenses were only $54.5 billion.

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 Paid for by Yes for a Healthy California, sponsored and major funding by Service Employees International Union, United Health Care Workers West. Additional major funding by State Council of Service Employees Issues Committee.

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