Dive Brief:
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The California Hospital Association is preparing to go to battle with the state's largest healthcare union as the union moves to introduce a ballot initiative that would cap the prices hospitals there can charge.
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The initiative backed by the union, the Service Employees International Union (SEIU) United Healthcare Workers West, would ban hospitals from charging more than 25% above the actual cost of providing care. The SEIU is also seeking to cap not-for-profit CEO salaries at $450,000.
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The CHA, for its part, estimates that a price cap would cost hospitals in the state about $12 billion per year and result in 50,000 lost jobs.
Dive Insight:
If this initiative makes it onto the ballot, much less gets approved, it should sends shockwaves through the hospital world. Hospital financial executives would find it extremely difficult to structure their prices in a reasonable way if the state sets limits across the board. That being said, with hospital prices varying so radically across the U.S. and within California, leveling them out might have some benefit for consumers and other stakeholders. Things are going to get pretty nasty here regardless of who wins.