In 2012, SEIU United Healthcare Workers floated a ballot measure designed to limit executive compensation at a South Bay nonprofit hospital that was more motivated by contract negotiations than the public good. It passed, but was rightly ruled unconstitutional.
Now SEIU is trying to take this strategy statewide. But voters shouldn't let them. A proposed ballot measure needs 500,000 signatures of registered voters by June 2 to make the November ballot. Don't sign.
Executive compensation in many industries has gone wild over the past two decades and some hospital CEOs are lavishly paid, but the average pay for a hospital CEO in the United States in 2010 was $510,000.
This proposed measure is not about helping to cap health care costs, as its proponents suggest. If it were serious about doing that, it would limit the salaries of hospital workers as well as the CEOs. No one should hold there breath waiting for that to occur.
Instead, this measure is another bargaining ploy. It is a thinly veiled attempt to force nonprofit hospitals to make budget and operational decisions the SEIU favors.
SEIU's Measure M in 2012 started as a spur-of-the-moment tactic to force El Camino Hospital's executive to cave on contract negotiations. It apparently worked. The union got its contract -- but the measure stayed on the ballot. No one campaigned for it, but it struck a chord with voters generally miffed at executive salaries.
A companion measure also gathering signatures in California would cap hospitals' charge for a procedure at 25 percent above the actual cost of service. That sounds good, but hospitals often lose money on procedures covered by Medi-Cal, which pushes other rates higher. It's not a good system, but a simplistic formula can only make things worse.
If hospital executives meet more of SEIU's demands, the union may pull back. It has withdrawn a cost-cap measure in Oregon after hospitals agreed to join a work group to address hospital costs.
The proposed salary limit of $450,000 for California is $60,000 less than the median pay for hospital CEOs across the United States, many in less expensive areas. It's the salary of the president, but that's an absurd comparison. The president never makes as much as private-sector executives.
Being the CEO of a hospital is a tough job requiring knowledge of health care economics, medical issues and business management.
It's hard to know which would be worse for Californians -- ballot-box legislating of salaries and fees, or capitulating to SEIU demands, which may or may not be in the public interest.
Regardless, measures like this are an egregious and transparent abuse of the initiative system, and voters must stop them.