Fight unfolds over measure to cap pay of LA hospital executives

A Los Angeles ballot measure backed by SEIU-United Healthcare Workers West would cap pay for hospital executives at the compensation of the U.S. president, or $450,000 per year. The California Hospital Association is challenging the measure, arguing that the president earns more. 

The proposed limitation would apply to any executive, manager or administrator at privately owned hospitals in Los Angeles, as well as skilled nursing facilities, residential care facilities and all facilities within integrated health systems. The $450,000 cap is inclusive of all compensation, including salary, paid time off, bonuses, incentive payments and lump-sum cash payments. 

Federal code states that the president is paid $400,000 annually with an expense allowance of $50,000. 

"The compensation paid to chief executive officers, executives, managers, and administrators of hospitals and other healthcare facilities is often excessive, unnecessary, and inconsistent with the mission of providing high-quality, affordable medical care for all," the measure states, arguing that $450,000 per year in compensation will leave city hospitals "more than able to attract and retain effective executive leadership."  

The California Hospital Association has filed suit challenging the measure, arguing that the U.S. president earns more than $450,000 per year when travel expenses, discretionary funds and residence in the White House are factored in, according to the Los Angeles Times. The hospital association cited calculations by a consultant who concluded that the total compensation tops $1.2 million. 

The alleged numerical mismatch means the ballot measure petition contained "calculated untruths" that misled voters who were asked to sign it, the CHA argues. It is calling for the courts to block the initiative from appearing on the ballot. A court hearing is scheduled for April 4. 

Supporters of the ballot measure have called the CHA's counter-calculation a "tortured explanation" in a court filing, according to the Los Angeles Times

This isn't the first time SEIU-United Healthcare Workers West has moved to cap Los Angeles hospital executives' pay. The union has proposed and abandoned a similar measure but at the state level in the past, and in 2019, it proposed the same ballot measure for the November 2020 election.

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