More than 3,500 Palo Alto voters have signed a petition supporting a ballot initiative submitted to the city for the November election seeking to prevent hospital overcharges, a health care workers union announced Wednesday.
The Palo Alto Accountable and Affordable Health Care Initiative, which was signed by 3,506 voters, would modify the Palo Alto Municipal Code governing health and sanitation, according to Service Employees International Union United Healthcare Workers West. The measure would limit hospitals, children's hospitals and medical clinics operating in the city from charging patients more than 15 percent above what it costs the facility for patient care.
Beginning Jan. 1, a hospital, medical clinic or other provider would have to issue a refund with interest and a reduction in a billed amount within 180 days of each fiscal year to payers for all charges in excess of the 15 percent, according to the initiative. A 5 percent fine of the refunded amount would be levied on facilities providing rebates to 50 or fewer patients in a fiscal year. Facilities providing rebates to more than 50 patients in a fiscal year would pay a penalty equal to 10 percent of the required rebate or reduction. The fines would be no less than $100 and no more than $1,000 per rebate or reduction. Facilities that do not issue the rebates or reductions after the 180-day deadline would accrue a new violation and fines for each day they haven't issued the refund or cost reduction.
The fines would be paid to the city's Administrative Services Department to implement and enforce city laws governing hospitals, medical clinics and other providers. Within 150 days after the end of the fiscal year, each facility would be required to submit information to the department identifying the reasonable cost of direct patient care for each patient. The ballot initiative goes on to the define some of the reasonable costs, such as salaries, wages and benefits of non-managerial staff and costs directly associated with running the facility.
In a press release, the Oakland-based union specifically called out Stanford University Medical Center for alleged overcharges. Stanford currently charges up to two, three or four times more than the statewide average for some procedures, the union claims.
"Stanford University Medical Center charges 264 percent more than the statewide average to treat a patient for alcohol or drug abuse, 141 percent more to treat a patient with chest pain and 120 percent more to treat a patient with kidney failure. Despite these higher prices, Stanford University Medical Center struggles in certain aspects of patient care when compared to other hospitals in California and across the country. The number of patients acquiring infections at the hospital is so high that Medicare penalized the facility each of the last three years," the union said in its statement.
The workers union said the measure would make health care more affordable for patients and encourage health care providers to invest more in purchasing new medical equipment, making facility improvements and improve staffing levels. The union has expressed an ongoing concern regarding staffing levels, which it claims affect patient care.
Stanford Health Care is a nonprofit system with reported operating profits last year of $234 million and reserves of more than $700 million, the union said.
The union plans to submit similar ballot measures in Redwood City and Livermore, where Stanford operates additional medical facilities, no later than May 31.
In a statement issued Wednesday evening, Stanford Health Care officials disapproved of the initiative, which they said "punishes the residents of Palo Alto in the process" and the community's access to health care "will be unnecessarily jeopardized."
"The measure's fine print reveals that it does not actually limit prices charged to patients, but instead targets local hospitals, medical clinics and doctors, and forces them to pay rebates to insurance companies without any requirement that the rebates be passed on to consumers," according to Stanford Health Care.
Stanford Health's statement goes on to claim that local government will carry the weight of enforcing the measure at the expense of taxpayers, "potentially putting other public services at risk."