Editorial: No on F, Yes on E | September 21, 2018 | Palo Alto Weekly | Palo Alto Online |

Palo Alto Weekly

Spectrum - September 21, 2018

Editorial: No on F, Yes on E

No, no, no on Measure F

Initiative to give city oversight over health care pricing deserves overwhelming defeat

It is difficult to imagine a more poorly conceived idea to present to voters than the Measure F health care initiative pushed by the union representing health care workers throughout California, including Stanford Hospital employees.

The state Service Employees International Union (SEIU) United Health Workers (UHW) is attempting similar initiatives across the state. In Palo Alto the union turned in more than 3,500 signatures in late May, leaving the city scrambling to meet the deadline for either adopting the proposal as presented or placing it on the ballot for voters to decide this November. The council unanimously voted to put it on the ballot and, subsequently, to oppose it. A nearly identical measure appears on the ballot in Livermore.

The proposal is a wolf in sheep's clothing.

Not only will it fail to help consumers and create perverse incentives for medical centers to cut staffing levels, but it will also saddle the city with the need to hire a staff of experts to analyze and oversee the charges being made by almost all medical professionals, including individual practitioners, dentists and orthodontists practicing in Palo Alto. No city is equipped to regulate health care providers, and it is hard to conceive of any court upholding the constitutionality of local control over what local health care providers can charge for their services.

The stated purpose of the initiative is to rein in medical costs by limiting the prices charged to 15 percent above "the reasonable cost of direct patient care." Under the proposal, the city would be responsible for reviewing billing data every year and any provider found to have exceeded the threshold would be directed to rebate the difference to the payee, which would normally be the patient's insurance company.

Critics of the measure say the real motive of the union's aggressive attempts to place these initiative measures on local ballots is to intimidate non-union hospitals to consent to unionization in exchange for the union not using the initiative process to impose price controls. The union denies that is its strategy and says its goal is to improve patient care and control out-of-control health care costs.

Palo Alto is the wrong place for the union to try and sell a proposal for health care price controls administered by a new department of city employees with health care administration experience.

We're confident that voters will recognize that attempting to reform health care pricing on a city-by-city basis is a bad idea even if the proposal offered a reasonable regulatory framework, which it does not. It would do nothing to either improve patient care or reduce patient costs and would impose unreasonable and expensive burdens on local government and taxpayers.

Help keep such measures from being pursued by the union in other cities by voting "no" on Measure F.

Yes on Measure E hotel-tax increase

We reluctantly recommend voters support the city of Palo Alto's proposal to raise about $2.5 million a year in new city revenue by increasing the transient-occupancy tax from 14 to 15.5 percent. If it passes with the required simple majority vote, it would be the third increase in the last 11 years and will make Palo Alto's hotel tax the highest in the state.

Raising the cost of an already expensive hotel room by a few dollars is an easy sell to voters. It won't cost residents a dime but will benefit them by providing funds for the city's general fund.

Although there are no restrictions on how the money is used, the commitment being made by the city is that it will be spent on priority infrastructure projects, including the long-sought new public-safety building, renovations to old fire stations and a new parking garage serving the California Avenue area. There is a bit of false marketing of this measure in the official ballot description, which incorrectly implies that the city's 911 system is vulnerable without these new funds and doesn't even mention the public-safety building. Earlier polling showed citing the 911 system and omitting the word "infrastructure" would attract the most voter support — hardly the proper way to craft ballot language.

City staff and the council didn't do their best work on this proposal, and we would have preferred a more honest description and the use of other funding sources with a greater nexus to the infrastructure projects to be funded, such as a business tax or bond measure. But further delay in addressing the accumulated capital projects will only make these necessary projects more expensive.

Comments

39 people like this
Posted by Greg
a resident of Old Palo Alto
on Sep 21, 2018 at 10:33 am

I haven't followed the union vs hospital battle too closely, but I do know that I was charged 2x the US median annual wage for a ~2h procedure at Stanford. I get that this may not be the way to solve the problem of grossly inflated costs, but I might vote yes purely to express my disappointment at how broken the system is.


21 people like this
Posted by JimBaer
a resident of Downtown North
on Sep 21, 2018 at 10:44 am

JimBaer is a registered user.

I am proud of Palo Alto Weekly's forceful no vote recommendation for F.

Measure F is not about what may be best for our future medical care.

This is a losing ploy for improved union management for health care workers. That is the only true
goal - unionization of Stanford Health Care. Elect better, capable union representatives and end
this nightmarish false legislation,

I am not opposed to good unions, I am opposed to scurrilous complex legislation that substitutes for
better union leadership

Vote NO on F.


47 people like this
Posted by NegativeVotesAreBad
a resident of Palo Verde
on Sep 21, 2018 at 11:06 am

NegativeVotesAreBad is a registered user.

Greg et al,
Voting for something that you know is wrong but you do because you are frustrated that the sysmte is broken is not a good way to solve a problem (as evidenced by our national political quagmire).
Instead, vote 'no' (or not 'yes') and spend some time/money to find a path to a solution that you can support.


29 people like this
Posted by Jackson
a resident of Downtown North
on Sep 21, 2018 at 11:59 am

@Greg - If you are unhappy with Stanford and their pricing, the answer is to go elsewhere next time. This measure is not specific to Stanford and affects all local care providers. The extra costs and bureaucracy of having to deal with this will just drive away Stanford competitors, leaving us all with fewer options/alternatives. At the end of the year if they are found to overcharge, the insurance company is the one that gets the rebate. Not us. How crazy is it that we are considering a measure to make the insurance companies even richer?

Also, medical charges are not real, meaning that the price that is charged is not what is actually paid. Insurance will only pay a fraction of what the charge is so in order to get a higher reimbursement, hospitals "charge" more, knowing they won't actually get paid that amount. These rates are all negotiated with insurance companies, each one reaching different agreements. That's why there is no price transparency because the charge for a test/procedure is not the same for everyone. If insurance companies weren't trying to reject and deny services all the time, hospitals wouldn't have to play these games.

The median home cost in the country is $220K. That is not even a down payment in this area. Medical centers have employees they need to pay so they can afford to live and work here. They have rent, overhead, etc... It's not surprising that
charges here are higher than the rest of the country.


35 people like this
Posted by jh
a resident of Evergreen Park
on Sep 21, 2018 at 1:21 pm

jh is a registered user.

Whatever you think of the healthcare aspects, to compel Palo Alto to finance and administer a completely new bureaucracy on any scale is completely unworkable. Palo Alto does not have the expertise to run a health insurance department for the general public. Would you even want every healthcare decision you and your doctor make being reviewed and vetted by someone at city hall?

At a recent presentation both for and against, the representative for measure F told us that Palo Alto has a spare $20M it could tap to run this new department. Anyone familiar with the city's budgeting will know that wherever this number is taken from is completely erroneous and self serving.

The city has hundreds of thousands of dollars in unfunded pension debt that will come due. Rapidly rising year on year. The Council's Finance Committee, council member Filseth in particular, is currently working on putting into place a long range plan to put the city on a solid financial footing with respect to its future pension payouts. This year working to reduce the budget by $4M, and the following year another $4M, which will involve cuts to services and strictor prioritizing in future years.

I suspect the Measure F people proponents chose to target Palo Alto because it assumes the residents are affluent and can afford to be the fall guys. However, this simplistic view of the city's finances is either ignorant or deliberately misleading the voters, probably both.


14 people like this
Posted by Marie
a resident of Midtown
on Sep 21, 2018 at 8:10 pm

Marie is a registered user.

Even if this passes, I'm almost sure it will be ruled unconstitutional by the courts. So I plan to vote yes, purely as a protest vote to the lack of transparency in medical charges by all hospitals and doctors. Just try to find out what a procedure will cost, gross, net or from your pocket. I don't believe in regulating costs - just making them transparent so that patients can choose the right alternative for them.


8 people like this
Posted by CrescentParkAnon.
a resident of Crescent Park
on Sep 21, 2018 at 8:43 pm

Measure F can be likened to BREXIT ... as a way to send a message. I think the BREXIT vote in the UK should be either reverse or re-done since there was only misinformation available for the original vote, and for such an important vote it was a majority poll. Send the message that the people of Palo Alto, CA or the US are sick and tired of this current rip-the-people-off version of healthcare ... especially after President Trump claimed so loudly that he was going to make healthcare better, cheaper and covering all, very quickly - and then nothing of the sort happened.

SEND THE MESSAGE, fix it later.


11 people like this
Posted by not a good idea
a resident of Crescent Park
on Sep 21, 2018 at 10:10 pm

"I plan to vote yes, purely as a protest vote to the lack of transparency in medical charges by all hospitals and doctors".


Insurance companies are equally, if not more to blame. What a hospital or doctor charges is directly related to what they have negotiated with the insurance company. Your insurance plan has negotiated different reimbursements with various hospitals for the same service. They have this info and yet if I need a surgery and ask them for the cheapest price in the area, they won't provide it, even though they have this info. Hospitals can't tell you because they are bound by confidentiality with the insurance plan so that hospitals can't compare with one another and gain negotiating leverage. This measure is a reward for insurance companies who get paid a rebate at the end of the year.
Anything that pays greedy insurance companies more $$$ earns a "no" from me.


"President Trump claimed so loudly that he was going to make healthcare better, cheaper and covering all, very quickly - and then nothing of the sort happened."

I don't think he very much cares what happens to us. I get why people are upset but threatening to hold our breaths until we turn red in order to send a message, isn't really going do anything. This is a local measure that will only affect ourselves. Nobody in the rest of the country will care our health providers move out of town or cut back services to remain profitable.


20 people like this
Posted by Bunyip
a resident of Adobe-Meadow
on Sep 22, 2018 at 8:35 am

To the Greg's and Maria's of the world voting "yes as a protest vote", be sure to be proud of that vote when ll the health services move out of Palo Alto and relocate to other cities, be proud of that when your property taxes triple to account for this new city department, be proud of that when you invariably need health care yourself and it is no longer available.

Cut your nose to spite your face is a great strategy. NOT.

IF YOU DONT LIKE THE COST OF HELATHCARE, GET RID OF INSURANCE COMPANIES AND MOVE TO A SINGLE PAYER SYSTEM.


6 people like this
Posted by Anon
a resident of Another Palo Alto neighborhood
on Sep 22, 2018 at 8:35 am

Posted by Marie, a resident of Midtown

>> Even if this passes, I'm almost sure it will be ruled unconstitutional by the courts. So I plan to vote yes, purely as a protest vote to the lack of transparency in medical charges by all hospitals and doctors.

I think this is a really costly and self-defeating way to register your protest. Let's find another way.

>> Just try to find out what a procedure will cost, gross, net or from your pocket.

I agree, and, yes, unfortunately I have plenty of first-hand and second-hand experience on this.

>> I don't believe in regulating costs - just making them transparent so that patients can choose the right alternative for them.

It depends on what you are regulating. Cosmetic surgery can be perfectly free-market, but, ER, by its nature, requires a monopoly to treat you well. You can't shop for an ER, or, it isn't an emergency.

Posted by CrescentParkAnon, a resident of Crescent Park

Measure F can be likened to BREXIT ... as a way to send a message. [...] Send the message that the people of Palo Alto, CA or the US are sick and tired of this current rip-the-people-off version of healthcare ... especially after President Trump claimed so loudly that he was going to make healthcare better, cheaper and covering all, very quickly - and then nothing of the sort happened.

Please find another way to send the message.


SEND THE MESSAGE, fix it later.


12 people like this
Posted by Me 2
a resident of Old Palo Alto
on Sep 22, 2018 at 9:01 am

"Even if this passes, I'm almost sure it will be ruled unconstitutional by the courts. So I plan to vote yes, purely as a protest vote to the lack of transparency in medical charges by all hospitals and doctors"

So the city will have to incur legal costs as well on top of the new administrative burden? Gee thanks. That's helpful.

Your position is not well-thoughtout.

(and showing again why propositions in general are a bad idea)


16 people like this
Posted by more complicated that you realize
a resident of Evergreen Park
on Sep 23, 2018 at 10:22 am

"I haven't followed the union vs hospital battle too closely, but I do know that I was charged 2x the US median annual wage for a ~2h procedure at Stanford. I get that this may not be the way to solve the problem of grossly inflated costs, but I might vote yes purely to express my disappointment at how broken the system is".

Greg-Did you actually pay 2x the median annual wage out of pocket? My guess is that your insurance paid for it and in the process showed you how much you were "charged".

The problem with this measure is that even very informed people have no idea how complex the medical system is and how money flows. I work in the medical field and even I don't understand many of the complexities. If a store has high prices, that's because the store set those prices. If a hospital has high prices, it's not because they are trying to actually collect those prices. What people don't realize is that with insurance, prices are artificial and set by insurance companies. If you told Stanford or any other hospital that you did not have insurance and were paying with cash, you would find the actual price would be much lower. Not saying it would be cheap but not as much as whatever your insurance is showing you is not real. They can say your procedure cost $200K or $500K or 5M. It's just a scam to make them seem like they are helping you out when they are the actual problem. We wouldn't have issues like this if we had a national insurance program but that has issues too. In any case, think carefully about who you think you are protesting to by voting yes. It's not the hospital or other healthcare providers that you are sending a message to. It's the penny-pinching insurance company that gets a kickback thanks to this measure.





2 people like this
Posted by Anon
a resident of Another Palo Alto neighborhood
on Sep 23, 2018 at 10:30 am

Posted by more complicated that you realize, a resident of Evergreen Park

>> Greg-Did you actually pay 2x the median annual wage out of pocket? My guess is that your insurance paid for it and in the process showed you how much you were "charged".

>> The problem with this measure is that even very informed people have no idea how complex the medical system is and how money flows. [...] They can say your procedure cost $200K or $500K or 5M.

People interested in this really need to understand your last sentence. Please, please, please read this article:

Web Link


10 people like this
Posted by thanks for the article
a resident of Professorville
on Sep 23, 2018 at 11:41 am

>>>People interested in this really need to understand your last sentence. Please, please, please read this article:<<<

This was really enlightening. Thank you for sending. My takeaway is that hospitals try to charge a certain price, insurance tries to deny the payments, hospital try to find ways to collect what they feel is due, and we get caught in the middle.

This measure was originally proposed as a way to limit hospital infection rates and it feels like it has morphed into a debate about affordable healthcare which is not what it was meant to address. This article also makes it clear that this is a battle between insurance companies and hospitals. Unlike car or home insurance, everyone will need medical insurance at some point. Thus the only way insurance companies can be profitable is to limit what they pay out. I'm not sure why anyone would vote to pay insurance companies more. The medical system is clearly broken at the national level. I don't know what the solution is but this measure is not it. The mentality of "I'm upset so let's do something we know is wrong to send everyone a message" is scary...


34 people like this
Posted by Bob
a resident of Old Palo Alto
on Sep 23, 2018 at 7:33 pm

Hi,
I’m an Old Palo Alto doc with a solo practice outside of Palo Alto.
I’ve read the initiative as if it were law and I had to comply with it. It requires me to figure out my costs and file the paperwork for the City to audit for each patient. It doesn’t say figure out my total costs and divide by the number of patients. In addition to the usual costs, I need to somehow have a large spreadsheet and keep track of how much it cost to take car of that particular patient. That’s because at the end of the year I have to document to the City that whatever I received in payment from that patient does not exceed 115% of my costs. Each patient. Individually!
I cannot know how much each patient cost me in overhead without precisely knowing how much time I and my paid staff spent with that patient, including non-contact time like medical record documentation, phone calls, lab results, supplies. Even if I wanted to know how much each patient’s “reasonable direct costs for patient care” were, this figure would not calculable with the best intentions, and the time required to even try would be very time- consuming. Actually it would be impossible.
This spreadsheet would have to be linked to patient record number, so it would be traceable in an audit by the City, but preserve patient confidentiality when submitted to the City.
So assuming I could get a direct cost number for each individual patient, I then have to compare that number to 115% of fees received in reimbursement. For the provider in solo practice, usually a professional corporation, you try to figure out what is left after expenses and pay yourself from time to time. At the end of the year your income goes into the direct cost column.
This measure has no provision for retained income for upcoming expenses as a direct cost, nowhere mentions insurance, e,g, malpractice insurance as a cost, continuing medical education expenses, medical journal subscriptions, professional society dues. These are costs involved in supporting a practice but do not count toward the 115% allowable charge to the patient.
After somehow figuring what each patient’s cost of care was, the required documentation may show that payment received was more than the lower limit of $20. Then the ordnance finds me guilty of a misdemeanor and in addition to the rebate that I must return to my patient within 150 or 180 days, fines me at least $100/day per patient for every day that the patient does not receive the rebate. If it turns out that I “overcharged”, as determined by someone at the city agency interpreting or disputing my calculations, then I owe the City 500 x $100=$50,000/day for every day that th patient does not receive their rebate. I can also be taken to court for damages for failing to timely pay the rebate by any of those 500 patients and have to cover attorney’s for each case. This goes on every year I practice in Palo Alto.
When a doctor sees an ordnance with this kind of wording, it seems that someone just wants to be mean, and that nothing solving is going on.
The record- keeping is insanely unreasonable, virtually impossible without ruinous expense, and the “gotcha” for non- compliance is extremely disrespectful of the people who are trying to take of other people, doing their jobs as physicians.
If you look at your EOB and compare the “charges” to what is paid, I as a patient myself feel sorry for the doctor who got so little for taking care of me. That reduction because of the insurance contract happens fo the hospitals and the individual providers. Everyone is frustrated by what medical care costs, and the finger gets pointed at whoever thinks they have found a guilty target. I think this ordnance is a horrible, mean-spirited exercise that as the responses above show, is trying to play on everyone’s frustration and desire to do something, like vote yes, to make a statement.
That doesn’t always work out so well as I personally feel happened in our last national election.
Please, your neighbor is asking you to vote no on this one. Wait for something better to come along, preferably at the state or national level. This would be so bad for Palo Alto.


16 people like this
Posted by Bob
a resident of Old Palo Alto
on Sep 24, 2018 at 9:50 pm

Bob here,
some clarification on some typos/omissions above: say I “overcharged” two patients/day or ten a week by $5 over the $20 limit, that would be 500 patients in a year. As the ordnance says, I would then owe the City of Palo Alto $50,000 in fines (100 minimum per patient) in addition to the rebate, and $50,000/day for every day I failed to pay the rebate. What if the City audited me and decided two months later that my calculations were incorrect and that 500 patients that I thought I had not overcharged were overcharged by their calculations. Then multiply 60 days x $50,000, and little old doc me would owe the City of Palo Alto $3,000,000. Take my house, I’m moving to Mountain View. Who are the evil genius/imbeciles (are you listening SEIU) who presented this to the people of Palo Alto as a way of reducing infection rates at Stanford Hospital?


Posted by Gary
a resident of Menlo Park

on Sep 25, 2018 at 10:15 am


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6 people like this
Posted by Bill Ross
a resident of College Terrace
on Sep 26, 2018 at 8:23 pm

Very good forceful editorial. Where was the Weekly when the matter came before the City Council? Why did not the City refuse to put the matter on the ballot like other cities? Even a liberal review of the powers of a Charter City do not reveal a "home rule" power that could reasonably construed to claim that the City has the power of review sought by Measure F, if it is in fact not pre-empted by federal law. The cost of the ballot measure being on the ballot and the related litigation costs are
City General Fund monies that could be better spent for bringing back motorcycle policemen for public safety or increased relocation benefits to existing residents that are, or will be displaced by increased Office development.


6 people like this
Posted by Paul
a resident of Stanford
on Sep 26, 2018 at 11:56 pm

Although most people probably realize how disastrous this bill would be to our community, the Stanford Undergrad Senate recently decided to endorse this bill. In a recent op-ed in the stanford daily, they state their main gripe is that the stanford insurance product is too expensive and doesn't give them enough options. What is ironic, is that they don't realize that the university insurance plan is not run by the hospital and when the bill states that the "payer" will get the rebate, that rebate will go back to the Cardinal Care stanford insurance plan.

The op-ed ends with "you have nothing to lose but your premiums" which sadly, is true because the 16K+ students do not pay taxes to support schools, emergency services, infrastructure, etc... Most will also likely not be living here longterm, so there is no incentive to worry about future finances of the city. I wouldn't be surprised if many students vote to support this measure. Many students are not happy with their healthcare plan. At a glance, the union has done a great job of pitching this as a way to promote affordable healthcare. Who can argue against that?


11 people like this
Posted by Annette
a resident of College Terrace
on Sep 27, 2018 at 10:29 am

Annette is a registered user.

No doubt all readers and everyone they know can cite an example of an outrageous medical bill. And difficulty getting a timely appointment. And the feeling of getting the bum's rush once at an appointment. Not only will this measure NOT FIX any of those problems, it will likely aggravate each one. Vote NO.

If the problems Measure F supporters want addressed are not at least improved, something similar to this measure will return b/c something's gotta give. Perhaps the next measure will be well-written and sensible. And maybe supporters can advise steps we can all take to lobby insurers and legislators to make at least some of the needed changes.


8 people like this
Posted by Me 2
a resident of Old Palo Alto
on Sep 27, 2018 at 8:50 pm

"Although most people probably realize how disastrous this bill would be to our community, the Stanford Undergrad Senate recently decided to endorse this bill."

Didn't know that critical thinking wasn't required for admission into Stanford....

(Go Bears! :-))


8 people like this
Posted by Margarita
a resident of another community
on Oct 4, 2018 at 4:07 pm

People who think that "Yes" will work as a protest vote learned nothing from 2016 elections or the quagmire that is Brexit. In both cases, people are still suffering because someone did no read the fine print and felt like protesting instead of working on real solutions.


6 people like this
Posted by Anne Thurston
a resident of Greenmeadow
on Oct 18, 2018 at 8:04 am

To vote yes as a protest on this measure is not a good idea.


Like this comment
Posted by Aletheia
a resident of Green Acres
on Oct 22, 2018 at 10:51 am

Aletheia is a registered user.

C'mon Palo Alto! You should be all in for F given your propensity for affordable housing. You want to force developers to offer housing below market values which is a market distortion. Same here with measure F folks. We don't want to be called hypocrites, do we? (Please, nobody mention banning cannabis dispensaries...)


Like this comment
Posted by Al
a resident of Charleston Gardens
on Oct 25, 2018 at 6:35 pm

One of the great things that made America a powerhouse of freedom and economic prosperity is our free market system. Here is another example of socialist central planning idea and price controls. They never work.

I was in the waiting for MOHS surgery yesterday and ended up in a discussion with a Polish woman about her life in Poland under socialism. The streets were very clean but you had to wait two years to get a car. Food was scarce and the police demanded she document every price of whatever she bought in her store and who and how much she sold it for.

That is what F is.
Please reject the idea of price controls every time it appears.
The free market works. It is the best way to control prices.

Here in America we have the greatest choice of goods and services.
Let's keep it that way.


2 people like this
Posted by spock
a resident of Duveneck/St. Francis
on Nov 3, 2018 at 9:28 am

spock is a registered user.


There are some inaccuracies in this editorial. Example:
// The stated purpose of the initiative is to rein in medical costs by limiting the prices charged to 15 percent above "the reasonable cost of direct patient care."

This is not accurate. It's 115 percent, not 15 percent.

1. There is no doubt that certain health systems in Palo Alto charge a lot more compared to other health systems in the vicinity - in some cases 2X to 3X or more. Example: An MRI scan in a hospital in PA will be billed a lot more than

2. Why is 115 percent "above" cost medical service not sufficient? Do read the ballot to understand what is considered as "cost" - practically everything related to what it takes to provide a medical service.

3. Although charges are billed to the Insurance companies and adjudicated by claims process, they ultimately result in higher premiums that we consumers have to pay. Runaway healthcare costs are OUR problem.

4. Read the book 'American Sickness' to understand how messed up our HC system is.

I'm voting Yes.




Like this comment
Posted by Perspective
a resident of Los Altos Hills
on Nov 3, 2018 at 3:49 pm

Not a Palo Altan, but in medical care for 40 years..what a nightmare for patients this would be! And, btw, no Spock, it is not 115% above the cost, it is 115% OF the cost..ie 15% above the cost.How would you like to be forced to earn only 15% more than you spent building your business? Would you stay and provide the business, with all the risks of losing it all or losing money in any given year?


2 people like this
Posted by Vane
a resident of Stanford
on Nov 6, 2018 at 6:25 pm

Healthcare shouldn’t be for profit. People shouldn’t have to die when there is many healthcare professionals. Yes on F this country and Palo Alto seems like a for profit institution looks more like neoliberalism to me.


Like this comment
Posted by ignorantunions
a resident of Palo Alto High School
on Nov 6, 2018 at 10:28 pm

[Post removed.]


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