Clinic Group Sues to Block Union Ballot Measure on Healthcare Spending
TL/DR –
The California Primary Care Association and Open Door Community Health Centers have filed a lawsuit to stop the Service Employees International Union-United Healthcare Workers West from putting an initiative on the November ballot. The initiative would dictate how clinics spend their money, requiring them to spend 90% of revenue on services for low-income and underserved populations. The clinics argue that the initiative, which has already gathered double the number of needed signatures, would interfere with federal laws and regulations and could force hundreds of community health centers to close.
Union Ballot Measure Challenged by Clinic Group
Community health clinics across California, represented by the California Primary Care Association (CPCA) and Open Door Community Health Centers, are suing to stop the Service Employees International Union-United Healthcare Workers West (SEIU-UHW) from placing an initiative on the November ballot that would mandate how they spend their funds.
The lawsuit, filed in the U.S. District Court for the Northern District of California, argues that the union’s measure interferes with federal laws and regulations that enforce strict spending requirements on nonprofit health clinics serving low-income patients.
The “Clinic Funding Accountability and Transparency Act,” as the union’s initiative is known, gathered more than 1 million signatures, nearly twice the required number, this month.
The proposed measure mandates federally qualified health centers to spend 90% of their revenues on services that fulfill their mission to provide primary and preventive care to underserved, low-income populations. Clinics that fail to adhere to this spending formula could face penalties, with their funds placed in a state-operated account that might later be used for worker training and staffing programs.
Union leaders and members argue that clinics spend too much money on executive pay and administrative overhead and too little on patients. Some clinics, they claim, use only half of their revenue on direct patient care. Clinics have disputed these allegations.
The clinic association warns that the initiative could lead to the closure of many community health centers by stripping nearly $2 billion from health systems. Tory Starr, CEO of Open Door Community Health Centers, warns the measure could lead to layoffs, reduced services, and closures, especially impacting rural patients.
The initiative is one of three measures the union has submitted to the ballot. Others include a proposal to limit healthcare executive pay at $450,000, and SEIU-UHW is also backing the controversial “billionaire’s tax.”
Despite collecting enough signatures, the “Clinic Funding Accountability and Transparency Act” still has to have their validity confirmed by the Secretary of State’s office to make it to the ballot.
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