California: The Golden State for healthcare financial cynicism

I've spent a long time--perhaps too long--as a journalist, so I have the diminished expectations department pretty well covered. Until last week.

That was when I attended by telephone a press conference held by the heads of California's largest hospital lobby and healthcare employees union. So much world-weary cynicism oozed through the receiver that if my phone could actually speak, it probably would have asked me if it could take a shower.

C. Duane Dauner, president of the California Hospital Association (CHA), and Dave Regan, his counterpart with the Service Employees International Union-United Healthcare Workers West, might as well have carried signs saying "Nothing To See Here. Move Along."

Regan's union recently pulled the plug on qualifying two voter initiatives for the November ballot that proposed capping non-profit hospital chief executives pay at $450,000 a year and limiting charges to 25 percent above the cost of actually delivering the care. The union worked out some sort of backroom deal instead. The two parties spent the entire press conference trying not to discuss it. Dauner, at times sounding imperiously irritated, declared the details should remain confidential. An exhausted and defeated-sounding Regan sounded like he could use a nap.

Regan said this deal, whatever it might be, was the only way to protect jobs. He added that the traditional job of unions--which when they were a force to reckon with included butting heads with management and occasionally striking-- was a "zero-sum game."

It's not the first time the SEIU-UHW used a bait-and-switch on ballot initiatives. Just two years ago it pulled initiatives on salary caps and charity care mandates for another ambiguous pact with the CHA.

The most salient detail that came out this time around was that both sides agreed to a "code of conduct" that I guess will put an end to one party trying to pass a ballot initiative without the consent of the other. They also agreed to work together to increase funding for Medi-Cal, the state's Medicaid program, although they did not discuss how that would benefit labor.

I think the initiatives would have had a pretty decent chance of passing if they had made it to the ballot. Voters in 2012 passed the union's bid for a salary cap at El Camino Hospital in Northern California, which is governed by a local healthcare district. And it would have shined a huge--if not national--spotlight on two healthcare finance issues of vital importance to consumers. The first is that most non-profit hospitals grossly overcharge patients for care. The second is that healthcare organizations use those inflated prices in part to pay the often seven-figure salaries many CEOs receive.

It would have been a messy electoral battle--my sources tell me the CHA planned to spend millions to defeat the charge capping initiative (the lobbying group was more confident it could overturn the salary cap in court). But it would have been so costly for hospitals from a money and public relations perspective that they might have actually heeded concerns about how they take in and spend their revenues. Instead, both sides pledged to increase healthcare affordability and transparency--without discussing any details.

So I asked Dauner why the CHA was suddenly in support of increasing transparency for consumers, since it has been against virtually every effort to do so over the past decade. "The CHA has opposed any (transparency initiative) that does not give consumers meaningful information," was Dauner's response.

As a memory refresher, California Healthline reported in 2008 that CHA was against a bill that would have required insurers to disclose to consumers what they pay to hospitals for their care --just one of many such efforts it opposed. And when the Centers for Medicare & Medicaid Services released specific hospital pricing data last year, Dauner suggested  in a statement that it would mislead the public.

Dauner's example of transparency: Hospitals must submit their chargemasters to state regulators, which then publish the information. I assume he is the only healthcare executive in the country yet to read Steven Brill's Time magazine article "Bitter Pill," where he concluded that "no hospital's chargemaster prices are consistent with those of any other hospital, nor do they seem to be based on anything objective--like cost."

I was cut off before I could pose that follow-up question.

Although I have had a fairly cordial relationship with the CHA, in recent years it has become more apparent that it  is inflexible when it comes to protecting the vested interests of its constituents. A great example of this is the organization's recent opposition to a bill requiring hospitals to formulate plans to protect its employees from workplace violence-- legislation triggered by the stabbings of two nurses on the same day last month at L.A.-area hospitals.

Apparently during the deal-cutting process Regan neglected to ask the CHA to at least keep mum on this bill. He was overtired, I guess. - Ron (@FierceHealth)

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