Measure to cap Los Angeles hospital executive pay will head to voters

Los Angeles voters will decide on a measure that would cap pay of hospital executives.

That's after the Los Angeles City Council voted June 21 to put the initiative on the ballot next spring, according to The Los Angeles Times

After the measure qualified for the ballot, the council had 20 days to either place the measure on a future special election or regular election ballot or adopt the measure. The city's next regularly scheduled primary nominating election is in March 2024.

The measure, backed by Service Employees International Union-United Healthcare Workers West, would cap hospital executive pay at the compensation of the U.S. president, or $450,000 per year. The president's compensation includes $400,000 annually with an expense allowance of $50,000. 

Pay for Los Angeles hospital executives "is often excessive, unnecessary, and inconsistent with the mission of providing high-quality, affordable medical care for all," the ballot measure states, arguing that executives "can be reasonably compensated without receiving more than" $450,000 per year in compensation.

The California Hospital Association filed suit challenging the measure, arguing the U.S. president earns more when factoring in travel expenses, discretionary funds and residence in the White House. The CHA argued the alleged mismatched numbers constitute "calculated untruths" that misled voters who were asked to sign the petition. In April, a Los Angeles judge denied the hospital association's challenge.

"This measure won't do anything to reduce healthcare costs or improve the quality of care in the community," the hospital association said in a statement shared with Becker's. "On the contrary, it will only make it more difficult to recruit qualified hospital leaders, including physicians and nurse leaders. Sadly, this union has a long history of filing politically motivated measures as a tactic to exert pressure on hospitals."

The union shared the following statement with Becker's: "The last few years have put enormous pressure on healthcare workers, causing an exodus of workers from the industry due to burnout and wages that don't keep up with the cost of living. Our healthcare system isn't working as well as it could or should for most people, as chronic understaffing in medical facilities has created a patient care crisis, while hospital executives' pay has been allowed to grow unrestrained. The primary concern of our major health providers should be serving the community, not enriching individuals."

The measure would apply to executives, managers and administrators of privately owned hospitals and other healthcare facilities in Los Angeles. Its cap includes salary, paid time off, bonuses, incentive payments and lump-sum cash payments. It would not apply to medical staff who primarily provide patient care, the Times said.

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