California’s Healthcare Union Battles Over Medicaid Cuts

Federal Medicaid cuts are reigniting an ongoing conflict between California’s healthcare sector and one of its major health unions.

SEIU-United Healthcare Workers West, which represents around 120,000 members, has proposed two initiatives for the ballot. These would limit the salaries of healthcare executives and mandate that local clinics allocate a significant portion of their revenue to patient care.

In response, the California Hospital Association has put forward its own ballot measure aimed at making it tougher for unions to allocate funds for political campaigns. If unions want to spend over $1 million on statewide initiatives or more than $100,000 on local ones, they’d need the approval of their members.

This competing measure has already collected enough verified signatures to qualify for the November ballot, coinciding with rising healthcare costs becoming a bigger concern for voters.

Affiliates of the Service Employees International Union are seizing on fears about affordability by reviving a plan to cap executive pay, which they’ve tried unsuccessfully before. The new initiative garnered over a million signatures.

“This effort reflects the serious crisis we face and the reality of affordability,” remarked Vikas Saini, president of the Lawn Institute, a healthcare think tank based in Massachusetts. “It also shows grassroots frustration and the urge to take action.”

Mikey Vaughn, a certified nursing assistant at Cedars-Sinai Medical Center, expressed that, despite their reputation, hospitals in Los Angeles often struggle with supply shortages and inadequate staffing. He commented, “We hope the executive compensation initiative will help hire staff and improve patient resources.”

According to federal tax filings, Thomas Priselak, then CEO of Cedars-Sinai, is set to earn $8.8 million in the coming fiscal year, while Kaiser Permanente’s Gregory Adams is projected at approximately $13 million, and Sutter Health’s Warner Thomas at just under $12 million.

Duke Helfand, a spokesperson for Cedars-Sinai, warned that if such a bill were to pass, hospitals would struggle to recruit and retain essential medical professionals, jeopardizing healthcare services significantly.

The union’s proposal seeks to cap earnings at $450,000 annually for hospital and medical group executives, but it doesn’t clarify how the rerouted funds must be utilized.

The proposal, titled the “Healthcare Executive Compensation Act of 2026,” has drawn criticisms from influential medical industry groups. These opponents have branded it the “Medical Crisis Act.”

Carmela Coyle, CEO of the Hospital Association, described the initiative as a cynical political maneuver, asserting, “This is poor policy that will negatively impact all of California.”

Glenn Melnick, a health economist at the University of Southern California, cast doubt on whether reduced executive pay would genuinely lead to lower healthcare costs for patients.

SEIU-UHW has not disclosed an estimate of the total salary amounts that would be collected from exceeding the proposed cap.

Critics warn that the initiative may unintentionally affect medical professionals serving managerial roles, including chief medical officers and department heads.

The decision regarding which staff members may exceed the salary cap will differ by hospital or health system.

Coyle noted that the ultimate interpretation of who is subject to the cap could end up in legal disputes. “That’s why we’re putting in so much effort,” she said.

A separate SEIU-UHW initiative concerning community clinics is currently being litigated. Medical groups have filed a federal lawsuit to block the proposal ahead of the November vote.

This initiative aims to require federally designated community clinics to spend at least 90% of their income on activities aligned with care for low-income populations. If passed, most of these clinics could face $1.7 billion in fines in the first year for non-compliance and potential yearly penalties thereafter.

Louise McCarthy, president of the Los Angeles County Community Clinic Association, pointed out that vital services such as translation and transportation might not count toward the required spending.

She remarked, “They are targeting groups they view as employers while we see them as a safety net.”

The lawsuit claims that the spending requirements could disrupt the authority of federal agencies over clinics.

SEIU-UHW spokeswoman Renee Saldaña characterized the legal challenge as a desperate effort by clinics to dodge responsibility.

The union has previously advocated for various ballot measures, including salary limits for hospital executives and regulatory changes for dialysis clinics.

SEIU-UHW has invested nearly $125 million in local and state initiatives since 2012, while opposition from medical industry groups has been significantly higher, with the hospital association spending around $36 million against three dialysis-related proposals, alongside dialysis companies contributing about $302 million to counter them.

The hospital association’s proposal argues that the political activities of the union jeopardize quality healthcare access and threaten future ballot funding.

Saldaña suggested the possibility of legal action if the initiative passes, expressing doubt about its legal standing and describing it as an attempt to silence healthcare workers.

Ultimately, Saini from the Lawn Institute emphasized that the ballot initiative won’t resolve the deeper issues plaguing American healthcare. “What we really need is a thorough reevaluation and rethinking of healthcare,” he concluded.