A proposal by a union of health care workers to impose caps on how much Palo Alto's medical providers can charge patients and insurance companies was emphatically rejected by local voters on Election Day on Tuesday.
The proposal, known as Measure F, would have placed City Hall in charge of regulating the health care costs of most local medical providers to ensure that none are charging their patients more than 115 percent of the cost of "direct patient care," which excludes administrative salaries. The Service Employees International Union-United Health Workers (SEIU-UHW) had argued that the measure is necessary to curb Stanford's exorbitant costs and ensure that Stanford devotes more resources to reducing its high rate of hospital-contracted diseases.
With 93 percent of the results counted, the measure was trailing by a huge margin, with 77.03 percent of the voters opposing it and 22.97 percent supporting it. Of all the votes cast, 10,702 went against Measure F while 3,192 went for it.
Duane Dauner, former president of the California Hospitals Association, had told the Weekly over the course of the campaign that the measure, if adopted, would force medical providers to reduce salaries and forego buying modern medical equipment.
The union had countered that hospitals will still be able to invest as much as they need to in patient care, as long as they don't charge patients more than 115 percent of that investment. The additional burden that the measure would place on medical providers and on the city is a fair price to pay for Palo Alto residents having confidence that they are being charged a reasonable amount.
The vote capped a bitter and expensive battle between the union and the California Hospitals Association, which collectively poured more than $7 million into the campaigns in Palo Alto and in Livermore, where voters rejected similar proposal known as Measure U. Officials from major hospitals, including Stanford and the Palo Alto Medical Foundation, had argued over the course of the campaign that the proposal would do nothing to actually curb health care costs and raised the prospect of small medical practitioners leaving Palo Alto to avoid the new regulations.
The City Council had also unanimously opposed the measure, which would have required the city to incur a costly new regulatory role. An analysis in Livermore indicated that the city would have had to incur about $2 million in new staffing costs to fulfill the measure's requirements. Shortly after the measure qualified for the ballot, Palo Alto City Manager James Keene publicly acknowledged that the city is "not equipped to handle this" and Mayor Liz Kniss, a retired nurse, said it would "put a substantial burden on our city."
Dauner said the emphatic defeat of Measure F suggests that the voters recognized the proposal as a "cynical attempt by one special interest group to gain personal advantage."
"Measure F's resounding defeat sends a clear message that the ballot box should never be politicized for personal gain or used to jeopardize a person's access to medical care," Dauner said.
Despite the defeat at the polls, the union said
that it had upheld its goal to "hold healthcare corporations accountable." In a statement on behalf of the union, Chuck Fonseca said the SEIU-UHW is also proud to have "exposed the excessive profits of Stanford Health Care."
"We already know that healthcare costs 30 percent more in the Bay Area than elsewhere in California," Fonseca said. "We're proud to expose the excessive pricing by Stanford Health Care and other healthcare corporations, who are taking advantage of patients and driving up healthcare costs for everyone."