The looming impression of federal Medicaid cuts has reignited a long-simmering, expensive battle between California’s medical business and one in all its largest well being employee unions.
SEIU-United Healthcare Workers West, with roughly 120,000 members, has put ahead two poll initiatives to cap the pay of medical executives and require neighborhood clinics to spend the huge bulk of their revenues on affected person care.
The California Hospital Association has responded with its personal ballot proposal that may make it more durable for unions to spend cash on political initiatives sooner or later. It would require approval by a union’s rank-and-file membership for any spending of $1 million or extra on statewide measures, or $100,000 or extra on native ones.
The competing measures, which have drawn sufficient verified signatures to qualify for the November poll, come at a time when the rising value of healthcare is rising as a top voter concern.
The Service Employees International Union affiliate has seized upon affordability angst to resurrect a proposal for a cap on healthcare government compensation, which it has failed to realize a number of occasions earlier than. The proposed measure garnered greater than 1 million petition signatures.
“This initiative reflects the serious crisis we face and that affordability is a real thing,” stated Vikas Saini, president of the Lown Institute, a Massachusetts-based healthcare suppose tank. “I think it also reflects grassroots anger and a desire to do something.”
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Mikey Vaughn, an authorized nursing assistant at Cedars-Sinai Medical Center, stated that the Los Angeles hospital, regardless of its repute because the go-to place for the wealthy and well-known, typically lacks provides and staffing ranges that he and his colleagues have to do their jobs successfully and with out undue stress.
“The executive pay initiative would, I hope, be used to hire staff and to actually provide better resources for our patients,” stated Vaughn, a member of SEIU-UHW’s government board and political committee.
Thomas Priselac, then-president and CEO of Cedars-Sinai Medical Center, made $8.8 million in fiscal yr 2024, in response to the group’s most up-to-date obtainable federal tax submitting. Kaiser Permanente’s CEO, Gregory Adams, made nearly $13 million in 2024. Warner Thomas, head of Sutter Health, made just under $12 million.
Cedars-Sinai spokesperson Duke Helfand stated if the measure handed, the hospital can be unable to recruit and retain physicians, nurses, and specialists, dramatically impairing its capacity to supply healthcare.
“Such a scenario would be disastrous not only for Cedars-Sinai but for hospitals across Los Angeles and California,” Helfand stated.
The union desires to cap compensation at $450,000 a yr for senior hospital and medical group executives, in addition to different administrative and managerial workers. However, the initiative doesn’t stipulate how {dollars} diverted from payroll should be spent.
The union has dubbed the newest proposal the “Health Care Executive Compensation Act of 2026.” A coalition of medical industry heavyweights opposing it — hospitals, physicians, and clinics, amongst others — has rebranded it the “Health Care Endangerment Act.”
Carmela Coyle, CEO of the hospital affiliation, known as the measure a cynical political ploy. “It’s bad policy and it’s going to have bad consequences across California,” she stated.
Glenn Melnick, a healthcare economist on the University of Southern California, stated that even when the initiative had been absolutely carried out and pay cuts enacted, he doubts it will scale back the price of healthcare for sufferers.
SEIU-UHW doesn’t have an estimate of the whole quantity the initiative would claw again from pay packages that exceed the restrict.
Opponents of the initiative word that it doesn’t goal solely government pay however would have an effect on medical practitioners who’re additionally managers. That might embody chief medical officers and chief nursing officers, in addition to heads of surgical procedure, emergency rooms, oncology, obstetrics, cardiology, and different specialties, they are saying.
It can be as much as every hospital, well being system, and doctor group to report which workers members exceed the cap and by how a lot.
Ultimately, who’s topic to the pay cap “probably will have to be battled out in court,” stated the hospital affiliation’s Coyle. “That’s why we are throwing everything we can at it.”
The second SEIU-UHW poll initiative, on neighborhood clinics, is already in court docket. The California Primary Care Association, which represents clinics, filed a federal lawsuit in April in search of to invalidate it earlier than it reaches the November poll.
The proposed measure would require federally designated community clinics to spend at the very least 90% of their revenues on actions immediately associated to their mission of offering look after low-income populations. If it had been to cross, over 90% of these clinic organizations can be on the hook for penalties totaling $1.7 billion within the first yr alone and “would face similarly crippling penalties every year,” according to a report commissioned by the first care affiliation and performed by the Berkeley Research Group, a global consulting firm.
Louise McCarthy, president and CEO of the Community Clinic Association of Los Angeles County, stated many pivotal companies the clinics present — translation and transportation, for instance — would possible not be counted towards the spending requirement.
“They are targeting a group of what they see as employers and we see as the safety net,” she stated.
The lawsuit cites the hurt to clinics and claims the proposed spending requirement would intervene with federal authority.
Renée Saldaña, a spokesperson for SEIU-UHW, characterised the lawsuit in opposition to the initiative as “a really desperate attempt by the clinic industry to try and avoid accountability.”
SEIU-UHW, proud of its political activism, can be behind a controversial billionaire tax proposal that may impose a one-time 5% levy on California residents with fortunes over $1 billion to backfill the funding hole created by federal cuts coming down the pike below Republicans’ One Big Beautiful Bill Act. The regulation, handed final July and signed by President Donald Trump, is projected to squeeze over $900 billion from the Medicaid well being protection program for low-income individuals by 2034, together with as a lot as $30 billion annually in California.
The hospital affiliation, the neighborhood clinic group, and the California Medical Association, which represents physicians, oppose the wealth tax proposal. But Saldaña stated all three of the union’s poll proposals tie into an overarching technique to counter the widening healthcare disparities attributable to the federal regulation. Referring to the proposed pay cap, she stated, “We believe the primary concern of healthcare providers, including executives, should be to serve the community, heal patients, and not be in healthcare just to enrich themselves.”
Over the years, the union has submitted dozens of native and statewide poll initiatives, together with ones to cap the pay of hospital executives, regulate dialysis clinics, and lift the minimal wage of healthcare staff.
The hospital affiliation calculates that SEIU-UHW has spent practically $125 million on native and statewide initiatives since 2012. But healthcare business teams have spent much more opposing them. The hospital affiliation information reveals that the union spent practically $36 million on three poll proposals to control the dialysis business, however dialysis corporations poured in $302 million to defeat them, in response to state marketing campaign finance data.
The union’s ongoing political efforts “threaten patient access to quality health care,” in response to the hospital affiliation’s poll initiative, which might restrict how a lot unions spend on future poll measures.
Saldaña hinted at a attainable lawsuit ought to that measure cross, saying that “we don’t see the legal viability” of it. The proposal, she stated, is an try “to silence the front-line healthcare workers.”
Ultimately, a poll initiative gained’t remedy the ills that plague healthcare within the United States, stated the Lown Institute’s Saini. What’s wanted, he stated, is “an evaluation and reimagination of healthcare.”
