Californians Denied Vote on Limiting Excessive Pay for Hospital Executives

[June 30, 2016] OAKLAND, Calif. – Healthcare workers denounced hospital CEOs for denying millions of Californians the chance to vote on a ballot initiative to limit excessive hospital executive compensation, after workers were forced by an arbitrator to withdraw the measure that received 650,000 voter signatures and was about to officially qualify for the Nov. 8 ballot.

“Hospital executives initiated legal proceedings to order us to withdraw from the ballot the initiative you signed – before you had a chance to vote on it,” the workers of SEIU-United Healthcare Workers West (SEIU-UHW) said in an ‘open letter’ to voters published today in the Los Angeles Times and Sacramento Bee. “Yes, one person can deny the will of 650,000 people and prevent a vote by more than 17.9 million people, all in the name of protecting multimillionaire CEO salaries. It’s outrageous.”

Workers pledged to keep speaking out on the corrupting effects of excessive executive compensation in the healthcare system, and to bring a similar initiative to the November 2018 ballot. They pointed to Cedars-Sinai Medical Center in Los Angeles as a prime example of hospital excess:

  • Cedars is a non-profit, charitable facility that doesn’t pay taxes yet charges nearly $40,000 for a night in the Intensive Care Unit;
  • Cedars had an operating margin (otherwise known as profit) of 10.1 percent in 2014;
  • Cedars put $337 million in profits in the bank in 2014; and
  • Cedars’ CEO, Tom Priselac, received $4.7 million in compensation in 2014.

“These executives are running charitable institutions, yet they are lining their pockets with millions that could go to providing quality care to patients or lowering health costs for the people of California,” said Dave Regan, president of SEIU-UHW. “They not only don’t want to give up their multi-million-dollar salaries, they desperately want to keep the people of California in the dark about their out-of-control pay and perks.”

The Hospital Executive Compensation Act of 2016 would have limited any executive, manager, or administrator at hospitals, hospital groups, hospital-affiliated medical foundations and physicians groups, or health care districts from receiving more than $450,000 in annual salary and benefits. The figure is the same amount of salary and expenses allowed for the president of the United States.

If approved by voters, California would have become the first state to hold hospital executives accountable to taxpayers, who contribute $38 billion annually to California hospitals through the government health programs Medicare and Medicaid, and millions more through tax breaks.

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