Palo Alto’s Measure F and Livermore’s Measure U win the award for the most irresponsible initiatives before Bay Area voters this fall.
The measures were put on the ballot by SEIU-UHW, the union that represents 1,800 Stanford Medical Center workers, with the likely intent of gaining leverage in contract bargaining. The cities were targeted because Stanford has significant operations in Palo Alto and Livermore.
The measures would force every hospital and health care provider in the two cities to reimburse insurance companies and patients who are charged more than 15 percent above the industry-established cost of services provided.
That’s right. Palo Alto and Livermore would be required to take responsibility for overseeing the validity of hundreds of thousands of medical charges every year.
The initiatives present so many problems and potential unintended consequences that it’s hard to know where to begin. Suffice it to say that hospital financing and medical costs are complex issues best left to federal and state governments. A major industry medical cost overhaul with greater transparency is in order. But cities are not suited to take on the task.
Palo Alto and Livermore voters should reject the measures on Nov. 6.
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Measure F and Measure U would impact every dentist, optometrist, podiatrist and individual or group health care provider in both cities, including Kaiser and the Palo Alto Medical Foundation. But make no mistake: The union’s intended target is Stanford. It wouldn’t be the first time that SEIU-UHW has used the ballot box to try to gain leverage over an employer for the next round of negotiations.
Some doctors in Palo Alto and Livermore are already threatening to pick up and move to nearby cities if the measures pass. And no one knows what the cost would be to the cities themselves. The union claims that it’s only a matter of reviewing hospitals and providers’ audits and ordering the reimbursements. But the city of Livermore is estimating the cost at $750,000 to set up the program and $2 million a year to run it. Ouch.
SEIU-UHW officials are adamant that the measures are designed with the sole intent of lowering medical costs for Palo Alto and Livermore residents. That’s ludicrous. An organization as well versed on hospital financing and insurance company pricing as SEIU-UHW knows better.
They know that hospitals such as Stanford routinely lose money on the Medi-Cal and Medicare patients they serve. The hospitals make up for it by charging higher rates to patients with private insurance. If Stanford and other providers can’t make up that difference, they will have to reduce services. It’s clearly an imperfect system that would be more equitable if the state and federal governments offered better reimbursement rates for services incurred by Medi-Cal and Medicare patients. But Congress and the California Legislature haven’t had the political will to make it happen.
Stanford critics note that its health care operation, which is separate from the university itself, has substantial reserves. But that money shouldn’t be construed as profit. It is needed to update the facilities expected of one of the top hospitals in the nation and to expand its medical programs to take advantage of the latest advances.
Cities such as Palo Alto and Livermore are not the place for major health care financing experiments. Especially when those experiments are so ill-conceived. Vote no on Measure F in Palo Alto and Measure U in Livermore.
