Dive Brief:
- Supporters of the Charitable Hospital Executive Compensation Act of 2016 are attempting to cap the annual compensation of healthcare executives at $450,000 to match it to the level of the office of the president of the United States, in an effort to reduce the cost of hospital care, reports My News LA.
- The backers have been given authorization from California Secretary of State Alex Padilla to start collecting signatures. They would need 365,880 registered voters to sign on by July 25 if the measure is to qualify for the November ballot.
- A previous attempt was made in 2014 with a similar measure, but it was withdrawn from circulation before qualifying for that year's ballot.
Dive Insight:
The initiative has created controversy between the Service Employees International Union-United Healthcare Workers West, which backs it, and the California Hospital Association (CHA), who opposes it.
When the measure was filed in November 2015, the CHA responded with a statement it would negatively impact hospitals throughout the state. "Artificially imposing a cap on compensation will result in a loss of qualified executives and undermine the ability of hospitals to meet the challenges ahead," it wrote.
In addition, an analysis by the Legislative Analyst’s Office and Department of Finance finds if the measure passes it will result in annual state administrative costs in the millions for enforcement, and will give the state the authority to recover those costs by assessing fees on specified hospitals, My News LA reports.