When the state finally released a long-awaited report last week showing more than a third of California hospital buildings and more than half locally could collapse in a major earthquake, it seemed to bolster industry claims that public funding is needed to help rectify the public safety issue.
But the hospital industry, facing a 2008 state deadline to strengthen the buildings or close them down, looks instead to have a major battle on its hands.
Health care unions are mobilizing in Sacramento to oppose the $4 billion to $5 billion bond measure and additional tax credits that the hospital industry is seeking to help it pay for the retrofits.
The opposition led by the powerful Service Employees International Union, the largest hospital union in the state is demanding that any public funding be linked to such things as how much charity care a hospital provides. To provide state financing without strings would be tantamount to a “public bailout,” union officials insist. And they have allies in the Legislature.
“There should be no public bailout without accountability and a fair return to taxpayers,” asserted Maura Kealey, health care coordinator for SEIU Local No. 399, which represents 25,000 nurses, technicians and other hospital workers in Southern California. “Who has more at stake than the patients and the community that has to rely on the hospital standing and functioning after an earthquake?”
In anticipation of the state’s report on hospitals’ seismic safety, the union hit hard, with a Northern California union local taking out a full-page ad in the West Coast edition of the New York Times. In it, the union accuses the industry of manufacturing a financial crisis while pocketing profits.
But hospital industry representatives say the charges are bogus, maintaining that more than 60 percent of the 470 general acute care hospitals statewide are in the red and would be unable to shoulder the industry’s $14 billion estimated cost for retrofitting or rebuilding.
The deadline was established in a law passed in the wake of the Northridge earthquake, which caused 23 L.A.-area hospitals to suspend some or all of their services. It includes an even stricter 2030 deadline requiring hospitals to remain functional after a major earthquake, which the industry estimates could cost another $10 billion to comply with.
“We as an industry absolutely support the underlying premise of the law, but there is a public policy issue here. Money that is spent on bricks and mortar is money not spent on patient care services,” said Jan Emerson, spokeswoman for the California Healthcare Association, the hospital trade group. “If we decide as a society that we want hospitals to be as safe as structurally possible, then we believe this has to be a public-private partnership.”
The battle lines are being drawn in the form of competing pieces of legislation. The industry is sponsoring SB 926, a bill by Sen. Joe Dunn, D-Garden Grove. It would provide for the bond issue to assist nonprofit hospitals, without any SEIU-like strings attached.
Another, SB 677, a bill, by Sen. Bruce McPherson, R-Santa Cruz, provides for an as-yet-undetermined amount of tax credits for profit-making hospitals, but a McPherson spokesman said the plan now is to fold it into the Dunn bill.
Meanwhile, the SIEU is supporting AB 1156, a bill by Assemblywoman Dion Aroner, D-Berkeley, that would provide for a bond issue, but link it to indigent care and whether a facility provides “safety net services.”
“If you are going to get public dollars, there should be some public benefit,” said Hans Hemann, legislative director for Aroner, who served as an SEIU local president 30 years ago.
The hospital industry looks to be in for a particularly tough fight on the tax credits, where the union is taking a harder stance.
“The public should look very skeptically at a for-profit hospital looking for public money,” Kealey said. “Being a for-profit, they have a very high burden of proof.”
Elena Lopez-Gusman, an aide to Dunn, said that despite all the rhetoric she is optimistic that the union and industry can come to a compromise over the level of financial assistance and how it would be distributed.
“We don’t see this as a fight. Part of doing this legislation is to create a forum for a serious policy debate about this,” Lopez-Gusman said. “There is rarely a bill that is signed into law in the same form it was introduced. This building (the state Capitol) is all about compromise.”
Even so, the debate is further clouded by another bill, SB 842, that Sen. Jackie Speier, D-San Francisco, introduced in February. It would eliminate the 2008 deadline entirely, but leave the 2030 deadline in place.
