LOS ANGELES (CNS) - Los Angeles voters in March will decide the fate of a proposed ordinance seeking to impose a $450,000 cap on annual compensation for health care executives.
The Los Angeles City Council voted 11-0 Wednesday to place the initiative on the March 5 ballot.
Councilman John Lee recused himself from the vote because his wife works in the health care industry. Councilwoman Monica Rodriguez and Councilman Curren Price were absent from Wednesday's council meeting.
The initiative ordinance, proposed by the Service Employees International Union Healthcare Workers West, or SEIU-UHW, would impose salary limits on health care executives, contending the compensation paid to them is "often excessive, unnecessary and inconsistent with the mission of providing high-quality, affordable medical care for all."
The ordinance, if enacted, would also impact health care administrative professionals with executive, managerial or administrative duties at privately owned health care facilities in the city of Los Angeles.
SEIU-UHW argued in the initiative that executives, managers, and administrators of hospitals and other health care facilities can be "reasonably compensated without receiving more than the president of the United States of America, currently $450,000 per year."
At that rate of compensation, L.A. hospital and health care facilities will be more than able to attract and retain "effective executive leadership," according to the proposed ordinance.
SEIU-UHW submitted the initiative petition in February, then collected the required number of signatures to put the measure before the City Council. Pursuant to the city charter section 452, when a certified initiative petition is presented the council must take one of three actions within 20 days -- adopt the proposed ordinance outright, call for a special election or submit the proposed ordinance to a vote at the next regular city/statewide election.
According to the clerk's office, a special election would have been the most expensive option, costing the city approximately $28.7 million.
The Hospital Association of Southern California, which represents 176 member hospitals and 31 health systems, sent a letter to the council urging the council to place the proposed ordinance on the ballot for voters to decide rather than adopting it without a public vote.
"We firmly believe this measure would create significant disadvantages for local communities and ultimately compromise the quality and affordability of health care in the city," the letter read.
The letter further detailed a concern of the organization that the proposed ordinance would target some hospitals while exempting others and excluding hospitals in neighboring communities.
"This exclusionary approach will create an uneven environment and impede the ability of targeted hospitals to retain and recruit top talent in the city of Los Angeles," the letter read.
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