The proposed initiative, submitted to the state on Friday, would limit compensation packages for executives, administrators and managers at nonprofit hospitals, hospital groups and affiliated medical entities to no more than $450,000 per year. That’s what the U.S. president gets.

 

This looks like a measure SEIU-United Healthcare Workers West dropped 18 months ago when it signed a partnership agreement with the California Hospital Association to settle differences and work on a joint campaign to fix Medi-Cal.

 

That deal also halted SEIU initiatives to regulate hospital prices and the level of charity care nonprofit hospitals provide. In exchange, the union appeared to get better access to hospitals for organizing purposes. Both partners agreed to a code of conduct about labor management relations.

 

Union spokesman Steve Trossman said the partnership agreement and labor management agreement remain in place. He said the union had not decided whether to also revive ballot measures on charity care and pricing.

Tactic ‘does nothing’ to increase hospital access

The filing of the initiative language with the Secretary of State’s Office isn’t necessarily a sign this is a serious proposal, but it’s certainly a serious message going into 2016 that the SEIU will continue to fight its battles through all available avenues. It triggered a sharp reaction from California Hospital Association CEO C. Duane Dauner and CTA Vice President for External Affairs Jan Emerson-Shea:

[The] decision by SEIU-UHW (UHW) to file a harmful ballot measure that will negatively impact the operations of hospitals throughout California is an abuse of the state’s initiative process and violates a May 5, 2014 agreement negotiated between the California Hospital Association (CHA) and UHW. Artificially imposing a cap on compensation will result in a loss of qualified executives and undermine the ability of hospitals to meet the challenges ahead.

 

Since signing the May 5, 2014 agreement, CHA has worked with UHW to address a myriad of issues facing California’s health care delivery system, most specifically the need to improve access to care for low-income children, seniors and the disabled. These efforts have raised the awareness among state lawmakers, stakeholders and the public about the importance of creating a stable source of funding for the Medi-Cal program, which provides coverage to more than 12 million Californians. While progress is being made, much work remains to be done.

 

This is the third time UHW has attempted to use the initiative process to further its organizing agenda. As was the case in 2011-12 and 2013-14, the measure filed today does nothing to fix Medi-Cal or increase access to hospital services.

State SEIU branch also pushing another ballot measure

The SEIU’s California branch has 700,000 members in California and has worked to raise its profile in recent years. Earlier this month, it announced plans to sponsor another 2016 ballot measure that also may be more of a leverage play to goad business interests to cooperate with the Legislature on raising the minimum wage than a serious effort. This is from the East Bay Express:

A coalition of low-wage workers and the Service Employees International Union of California filed a ballot proposition yesterday with the California Attorney General that would raise the statewide minimum wage to $15 by 2020, and adjust it upward each year thereafter at the rate of inflation. It would also mandate that employers provide workers with a minimum of six paid sick days per year.

 

Backers of the initiative said they will begin gathering signatures to put it on the ballot starting in January 2016. If they succeed in gathering the 365,880 necessary signatures, voters could decide on the proposal in the November 2016 presidential election.

This ballot measure is more generous than a rival ballot proposal to raise the minimum wage sponsored by one of the SEIU’s largest member unions, the United Healthcare Workers West. The Sacramento Bee reported earlier this month that the state SEIU may end up working with the hospital union on one measure to avoid confusing voters and wasting union dollars by launching two separate efforts.

A dozen health care experts blamed rising costs on a variety of factors:

• State-mandated hospital staffing ratios result in labor shortages.
• Health care workers receiving the highest industry wages in the country.
• Some prescription drugs cost $1,000 per pill or more.
• Increased consolidation has led to a lack of competition.
• A lack of transparency in pricing.
• Governmental under-reimbursement for Medi-Cal and Medicare patients is shifting costs to private insurance.
• California’s aging population results in more illness and expensive end-of-life care.

The largest cost for California hospitals is labor, which accounts for 58 percent of expenditures, according to Anne McLeod, senior vice president for the California Hospital Association.

The problem is getting worse. Employee compensation increased twice as fast in California hospitals compared to all private industries from 2001-10, according to McLeod. Hospital employees in Northern California comprise the top 10 highest paid geographical areas in the country – with New York City at number 11.

As a result, Northern California health care prices are 38 percent higher than in Southern California, according to Jim Araby, executive director of the UFCW Western States Council.

Better pay

Committee Vice Chair Janet Nguyen, R-Garden Grove, said she’s shocked that Northern California hospital workers are paid better than those in Southern California, especially when the cost of housing in Sacramento is much cheaper than in Orange County.

McLeod responded there are fewer trained health care workers in Northern California, resulting in some nurses being better paid than primary care physicians.

Contributing to the problem are what McLeod called “arbitrary” state-mandated minimum staffing ratios. “If they were relaxed and more in line with the national average, that would free up a large portion of the workforce immediately,” she said.

A California HealthCare Foundation study concluded that the ratios, which vary depending on the type of care unit, had “no significant impact on the quality of patient care.” But attempts to reduce or eliminate the staffing requirements would face strong opposition from unions like the California Nurses Association and National Nurses United, which are pushing for minimum staffing ratios in the rest of the country.

Although prescriptions drugs account for just 10 percent of health care costs, the high price of medicine dominated the committee’s discussion. The focus was on the new Hepatitis C drugs: Sovaldi, which costs $1,000 per pill, and Harvoni at $1,125 per pill. A 12-week treatment costs $84,000 for patients taking Sovaldi and $94,500 for Harvoni.

Pricing

The attack on expensive drugs was led by Dr. Sameer Awsare, associate executive director in adult and family medicine for Kaiser Permanente. “Nothing is of more concern to Kaiser Permanente than how the pharmaceutical industry has priced specialty drugs,” he said. “That is extremely concerning to us.”

The cost of specialty drugs in the United States is projected to quadruple to $402 billion in 2020 from the $87 billion spent in 2012, Awsare said. Specialty drugs currently account for 25 percent of total drug spending, despite comprising just 1 percent of drug prescriptions. By 2020, specialty drugs will account for 50 percent of total drug costs.

In reference to the Hepatitis C drugs, Awsare said, “The pricing actually stands in the way of patients getting benefits from this medication. If this drug was actually used to treat all 3 million patients that have Hepatitis C in the United States, the list price would be about $300 billion. And this is actually the total amount of money we spend on every other drug in this country.”

This is resulting in rationing of medicine only to the sickest patients.

“People understand that we have limited resources in this country,” said Awsare. “And what some of the professional guidelines are suggesting is that you actually … prioritize how you would treat patients. And this is a really odd situation to put a physician or clinician in.

“This would be a tough conversation to have with your patient. You have to say to them, ‘You know, you’re not really sick enough to get this medication at this point.’ The Liver Society guidelines actually tell you to prioritize for people who have really severe cirrhosis. Yet when patients have just the early part of Hepatitis C, they can get this drug and be cured 95 to 99 percent of the time.

“If we’re going to tell them, ‘Why don’t you wait a little bit until you’re sicker, then maybe you can have this medication,’ as a clinician I find this a very difficult conversation to really have with my patient.”

Awsare dubbed Sovaldi “the canary in the pipeline.” Cancer drug prices are increasing 10 percent per year with 11 priced over $100,000 for a year’s supply. “This is absolutely outrageous,” he said. “The drug makers simply need to do the right thing by pricing their products appropriately and fairly without bankrupting the system. I think we have a looming crisis ahead. The status quo is unacceptable.”

Industry defense

Gregg Alton, executive vice president for Gilead Sciences, which manufactures Sovaldi and Harvoni, defended his industry. He pointed out that drug manufacturers have transformed HIV/AIDS from a death sentence 20 years ago to a managed illness today. Patients who formerly had to ingest a 20-drug cocktail every day now have to take only one pill to manage their condition.

Similarly, Hepatitis C, which infects approximately 200 million people worldwide, 3.2 million Americans and 600,000 Californians, has also been brought under control, according to Alton.

“We have been working on Hepatitis C since the late ’90s – it’s been a long road,” he said. “At that time the only treatments available, and this was up to a year ago, were very toxic … really making those products unacceptable and actually unusable to many patient populations. We were able to cure about half to two-thirds of patients who were actually willing and eligible to undergo that type of therapy.

“Today we can now cure Hepatitis C with one pill a day without all of the horrible side effects. For about 45 percent of the patients, we can do that with eight weeks of therapy. For about another 45 percent of patients, we can do that with 12 weeks of therapy.” The remaining 10 percent requiring longer therapy and formerly had no chance for a cure at all, he added.

Pricing factors

Alton discussed the factors that went into the pricing of Sovaldi and Harvoni at $1,000 or more per pill.

“We price those really on the clinical benefit of those products, the economic and public health values of those,” he said. “We really emphasize the value of a cure. These are not drugs that patients take for the rest of their lives. I think that’s a very important difference when you’re comparing it to drugs that you have to take annually every year.

“We compared it to the cost of existing regimens that were out on the market at that time. Existing regimens were just about $96,000. The cost of treating Hepatitis C with Sovaldi or Harvoni is substantially less than what it cost to treat Hepatitis C a year and a half ago. Some of the studies have shown that we actually reduced the cost from roughly $180,000 per cure to roughly $110,000 per cure.”

Obamacare

But while drug prices are a growing problem, a larger cost driver may be government-run health care, including the Affordable Care Act (also known as Obamacare).

“Most policy makers and observers of the health care industry fail to recognize that the implementation of the ACA is costing California hospitals more than $22 billion for the first 10 years since its enactment,” said McLeod. “And this is through cuts in the Medicare program. It’s anticipated that by 2019, annual losses California hospitals will experience in treating Medicare patients will top $9 billion a year.

“The chronic and severe underfunding of government programs creates a cost shift to the commercial market. There’s no getting around that. Government funding will continue to worsen, as we see with the ACA cuts, and the cost-shift will grow.

“What’s most alarming is Medi-Cal reimbursement to hospitals. Medi-Cal is estimated to cover up to one in three Californians when the ACA is fully implemented. That means one in three Californians will pay hospitals a rate that is up to 40 percent negative margin for that hospital to provide care.”

McLeod added that, despite the gloom and doom prognosis for California’s health care future, the state is actually doing better than the rest of the country.

“I think we have a lot to be proud of in California,” she said. “California actually delivers care on a per capita basis that is 8 percent below the national average. Why? Primarily due to our expertise in care delivery and care management. This has resulted in some of the lowest hospital utilization rates in the nation.”

The informational hearing was the second in a series, according to committee chair Sen. Ed Hernandez, D-West Covina. The date for the next one has not been set.

The Ebola virus has yet to hit California, but it’s likely coming, according to state health officials. They say the state is prepared, but nurses on the health care front lines aren’t so sure.

“Given the spread of Ebola in West Africa and world travel, we should not be surprised if sometime in the near future a person in California is suspected of Ebola. And California needs to be prepared,” Assemblyman Richard Pan said in his opening remarks as chairman of a Nov. 18 Assembly Health Committee informational hearing on Ebola.

“Certainly the public is concerned about this disease,” said Pan, who is also a pediatrician at a Sacramento clinic. “In the past months I personally have been asked about Ebola while walking in the community, at meetings and in my clinic. People want reassurance that California is ready, that we will contain the disease and keep their families safe.”

State health officials are monitoring people in California who have traveled to the four main Ebola-infected countries: Liberia, Sierra Leone, Guinea and Mali.

“As of Nov. 17 there are 26 returning travelers being monitored in 12 counties across California, including two returning health care workers,” said Gil Chavez, the California Department of Public Health chief epidemiologist. A total of 58 people have been monitored since the early detection effort began several weeks earlier. “We have reached a steady state where the number of new returning travelers is roughly equal to the number passing the 21-day monitoring period,” he said. “The great majority of returning travelers continue to be in the low-risk category.”

‘Largest in history’

Department of Public Health Director Ron Chapman said “the outbreak we are seeing now is the largest in history.” But he assured the committee that state officials “are working very hard” with both local and national public health agencies to keep tabs on suspected Ebola patients. “We are receiving very, very small numbers of travelers compared to states on the East Coast,” he said. “There’s no suspected or confirmed cases to this point in California.”

But it may be only a matter of time before that changes, according to Bela Matyas, representing the Health Officers Association of California.

“From a strictly pragmatic standpoint, given the size and duration of this outbreak in Africa, the risk of Ebola virus disease in California is real,” he said. “Ebola can be imported to California through a visitor from one of the impacted countries, a returning health care worker, or a person infected by Ebola elsewhere in the U.S. If a case of Ebola occurs in California, limited local transmission is possible. Although, obviously, we would do everything we can to prevent that. But sustained transmission of Ebola in California is highly unlikely.”

When those Ebola patients do arrive, hospitals will be ready, according to Cheri Hummel, vice president of disaster preparedness for the California Hospital Association, which represents 400 hospitals in the state. “I can attest to them being prepared and ready for an Ebola case,” she said. “California hospitals are required on an ongoing basis to prepare for a variety of emergencies, including infectious diseases. They have well established plans for infectious disease control.”

The primary care facilities for Ebola patients in California are the five UC medical centers in Davis, Irvine, Los Angeles, San Diego and San Francisco.

“[The] medical centers have been engaged in probably one of the most extraordinary planning and training endeavors that I’ve been involved in 41 years in health care,” said Carol Robinson, chief patient care services officer for the UC Davis Medical Center. “To date we have conducted more than 1,200 hours of training … for safely donning and doffing PPE [personal protective equipment]. And it’s being conducted in 90-minute sessions, eight hours a day, five days per week.

“We have been listening to our nursing staff as they have participated in the selection and training of our equipment. We are also consulting with our infectious disease experts for recommendations to provide a safe, sufficient protection; and it’s based on science and evidence. Nurses, for example, provided crucial insights in this protective equipment as they have practiced putting it on and taking it off. Our donning and doffing process is probably the most critical. And the nurses have to be expert at it.”

Kaiser ready

Earlene Person, a nurse at Kaiser Permanente in Oakland, believes her hospital is ready.

“In all my years as a health care provider, I haven’t seen the public as concerned about a health issue since the outbreak of AIDS in the 1980s,” she said. “I share their concern. I want to be safe. I want my family to be safe. And I want my patients in my community to be safe. And as health care workers we have the right to get the training and the equipment we need to protect ourselves from Ebola.

“The good news is that there have been no reported cases of Ebola in California. We hope it remains that way. We are the largest state in the nation, and a case of Ebola could arrive on our doorstep any day. So we have to be ready. I am happy to report that if an Ebola patient were to arrive at my hospital tomorrow, we have the proper training, equipment and procedures in place to keep everyone safe. That means patients, workers in the community. At Kaiser we consistently receive updates on new information and safety preparation.”

But not all nurses are so confident. Ten of them spoke during the public comments period at the end of the meeting to voice their concerns. Many were grateful for Cal-OSHA’s new guidelines for protecting hospital workers’ safety when dealing with Ebola patients. Those guidelines were issued, they said, in response to their complaints about inadequate safeguards.

“Upon seeing the lack of optimal personal protective equipment and lack of response from our facilities, we went to the governor demanding action,” said Kathy Donahue. “He listened intently, heard the nurses’ reports of how deeply unprepared and resistant hospitals were. And he moved to protect the public, the nurses and other health care workers. Absent scientific consensus that a particular risk is not harmful, especially one that can have catastrophic consequences, the highest level of safeguards must be adopted. That’s a sharp contrast to the profit principle that has guided the response of most hospitals.”

Nurses

Malinda Markowitz, a co-president with the California Nurses Association, is not confident adequate protections are in place to monitor potential Ebola patients in the community. “Isn’t it true that we are not always keeping track of patients that have tuberculosis and they fall out of contact?” she asked. “So how are we to assume and be assured that an Ebola patient would be any different than patients that have tuberculosis? How can they assure that an Ebola patient won’t be the same, and we would lose the contact and they would be out in the public possibly infecting the community?”

Zenei Cortez, another CNA co-president, noted how easily Ebola can be spread. “All it takes is just one drop or one splash of vomit to infect the health-care worker or the nurse,” she said. “I urge you not to allow the industry to water down the mandated regulations so that our hospitals, our employers, would be responsible for all the workers. They can very well afford the personal protective equipment that we need to take care of our patients. The nurses are relentless, and we will make sure that all patients, the public and all workers are safe. And not one more life will be wasted and not one nurse will be infected.”

Katy Romer, a nurse at Kaiser Permanente in Oakland, doesn’t believe hospitals are ready. “It is crucial that you listen to the people on the front lines that actually know what’s happening in the hospitals,” she said. “Kaiser Oakland is saying they are completely prepared right now. The reality is that they are not completely prepared right now. There is tremendous variability from facility to facility. But even within my facility there is tremendous variability within department.

“If you’re not training with the highest level of equipment, you’re not prepared to deal with this disease. You’re going to be putting yourself, the patients and the community at risk. If you go in the hospital and you’ve had an exposure and then you have a nurse that’s not prepared to care for you, you’re in danger. And your whole community and your family is in danger. We don’t want that to happen to anyone.”

Concerns

Pan concluded the two-hour hearing by acknowledging the nurses’ concerns. “I do take to heart that we do need to surely know what’s really going on on the front lines that can be a little different than what the policy makers think,” he said. “I’ve experienced that already in this position as a front-line doctor. So I think that’s an admonition well taken.”

In his opening remarks, Pan noted Ebola is not the only contagious disease worthy of increased attention and precautions.

“The influenza pandemic of 1918 actually killed more people worldwide than all the soldiers and sailors that died in World War I, just to give you some context here,” he said. “But infectious diseases are not a problem of the past; they are problem in the very present. In fact, here in California this year we are going through another pertussis epidemic.

“We have faced record numbers of measles and West Nile Virus infections. Valley Fever continues to be a significant problem in the Central Valley. And last flu season, as we are about to approach another flu season, 404 people died of the flu who were under 65 years of age of influenza. We actually don’t track people who are over 65.”

At the same time, however, California’s health care spending has not kept up, he said.

“Last February this committee held a hearing on California’s public-health infrastructure and our state’s preparedness to halt the growing threat of contagious diseases,” said Pan. “That hearing revealed the local public health departments and state laboratories had suffered significant cuts during the economic downturn. In Sacramento County alone, 135 public health positions were eliminated between 2005 and 2010. And support for identification surveillance and emergency response were particularly vulnerable because they depend primarily on discretionary funding in government budgets.”