Palo Alto voters may have a chance next year to put a cap on how much Stanford Health and other health care providers can charge patients for medical care under a ballot initiative being advanced by the health care union.
The Service Employees International Union-United Healthcare Workers West (SEIU-UHW), which represents about 93,000 employees, filed ballot initiatives last week in four Bay Area cities that have Stanford Health medical facilities: Emeryville, Livermore, Pleasanton and Redwood City. On Thursday, the union plans to do the same in Palo Alto, home of the network's flagship facility, Stanford University Medical Center.
Union spokesman Sean Wherley said the union decided to pursue the initiative in the five cities after learning that Stanford University Medical Center has been experiencing higher infection rates than other hospitals in the Bay Area while at the same time charging some of the highest rates for patient care. The union includes about 1,800 Stanford University Medical Center employees.
The measure would effectively bar Stanford from charging patients more than 15 percent above the actual cost of providing services. In a news release, the SEIU-UHW pointed to a report from the California Office of Statewide Health Planning and Development showing Stanford significantly exceeding the statewide average for various treatments.
For alcohol and drug abuse treatment, the statewide average was reportedly $27,621, according to the union. Stanford charged $100,557, more than both University of California, San Francisco ($76,230) and California Pacific Medical Center's St. Luke's Campus ($86,828), the union alleged, pointing to the data from the state agency.
The union also highlighted data showing that Stanford charges almost $60,000 more than the state average for treatment of kidney failures and more than $45,000 above the state average for chest pain treatment.
In addition, the union alleged that the medical center scored far worse in 2013 and 2014 than the national benchmark for patients acquiring Clostridium difficile, a contagious infection that causes severe diarrhea. Wherley told the Weekly the union is concerned about this combination of higher costs and poor quality at Stanford Health.
"Now that you have Stanford expanding into (the) East Bay, there's real concern that problems that exist in Palo Alto -- the overcharging and high infection rates -- will be brought to other communities," Wherley said.
In response to the union's announcement, Stanford Health released a statement saying that while it hasn't seen the ballot language, "we would be disappointed if these efforts moved forward."
"All hospital charges reflect the complexities of the national healthcare system as well as multiple other factors ranging from local and regional market conditions to the level of care being provided," Stanford's statement read. "We take this seriously and we certainly want to respond on behalf of our patients and the communities we serve once we see the proposed language."
The proposed ballot language states that the purpose of the ballot measure is to "provide for the orderly regulation of hospitals and other health facilities" by providing "minimum standards and regulations regarding their operation."
"The prices charged to patients and other payers have far-reaching effects on consumers purchasing health care services and insurance, as well as taxpayers supporting public and welfare programs," the ballot statement reads. "Investments in quality of care improvements can benefit patients and caregivers, and ultimately result in lower overall health costs."
If approved by the voters, the new cap would take effect on Jan. 1, 2019. It would require hospitals and clinics to calculate its health care costs and compile, for each patient, a list of information that includes the total amount received in payments; the "reasonable cost" of the provided care; and, where applicable, the amount by which the former has exceeded the latter.
The new law would require that payments made by patients to the hospital not exceed 115 percent of the "reasonable cost of direct patient care," unless the hospital successfully petitions the city's Administrative Services Department for a waiver. A waiver would only be granted if the city finds that requiring such a rate would be "confiscatory or otherwise unlawful as applied to that hospital, medical clinic or other provider."
Even if the city grants such a petition, the waiver would offer only limited leeway. The ballot language specifies that the city would only be able to adjust the "115 percent" number by the "lowest whole number such that the resultant acceptable payment amount would not be unlawful."