Voters File Ballot Initiative Limiting Hospital CEO Pay in L.A

Voters File Ballot Initiative Limiting Hospital CEO Pay in L.A

[April 17, 2019] LOS ANGELES – Voters seeking to hold Los Angeles hospital executives accountable filed a citywide ballot initiative that would limit their annual compensation to no more than the amount paid to the President of the United States.

“At a time when healthcare costs are soaring, one way to hold the hospitals accountable is by capping their executives’ excessive compensation,” said Marsha Richardson, a healthcare worker in Los Angeles. “This is especially true for hospitals that operate as non-profits and receive huge tax breaks, which are the majority of hospitals in the city. As long as taxpayers are subsidizing these hospitals, they need to answer to voters and better serve local residents.”

Under the initiative proposed for the November 2020 election, executive compensation at private, non-profit facilities in Los Angeles would be limited to $450,000 annually and adjusted if the salary of the U.S. president increases. It is estimated that at least 15 CEOs at Los Angeles hospitals would be affected, along with many other hospital executives.

Cedars-Sinai Medical Center is an example of a non-profit hospital that does not pay property taxes or income taxes in return for operating in the public interest. However, despite its tax status, Cedars-Sinai reported profits of $452 million in 2017, its CEO received $4.3 million in compensation, and the facility spent only two percent of its net income providing care for low-income patients.

At the same time, state records show Cedars-Sinai charges considerably more than other California hospitals for some services. For example, it charges nearly $112,000 more than the statewide average to treat a patient with septicemia, $88,000 more to treat a patient with psychoses, and nearly $79,000 more to treat a patient with heart failure.

Earlier this month, healthcare workers posted a series of billboards calling out Cedars-Sinai Medical Center’s excessive profits and executive pay. The billboards will appear for the month of April at seven locations – all within 1.5 miles of the hospital – on Melrose Avenue, Beverly Boulevard, Fairfax Avenue and Third Street.

More than 1,800 Cedars-Sinai employees are members of SEIU-United Healthcare Workers West (SEIU-UHW), and their contract with the hospital expired March 31, 2019.