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SEIU drops ballot initiatives, joins hospital group in Medi-Cal lobbying effort

Posters about Obamacare are posted on a window during a healthcare enrollment fair at the Bay Area Rescue Mission on March 31, 2014 in Richmond, California. SEIU-United Healthcare Workers West (SEIU-UHW) held the fair to help people sign up for free and low-cost health coverage through Medi-Cal or Covered California on the final day before the sign-up deadline.
Justin Sullivan/Getty Images
SEIU-United Healthcare Workers West is joining with the California Hospital Association in a $100 million effort to strengthen Medi-Cal.

The state’s largest healthcare workers union is abandoning two ballot measures aimed at curbing hospital costs and executive salaries, and instead is teaming up with the California Hospital Associationin a $100 million lobbying effort to strengthen Medi-Cal.

The Association and SEIU-United Healthcare Workers Westcreated a $100 million joint advocacy committee that will lead the effort.  The three-year agreement was finalized Monday, said union president Dave Regan.

While the joint committee will strive to improve labor relations, its first priority is to "fix" Medi-Cal, according to the hospital group and the union. 

"We begin from the premise that SEIU-UHW and the hospital association can do more to improve and enhance the hospital system more together than we can do separately," Regan said. "We believe that if we are going to be successful going forward that we have to see the big picture."

The committee will seek legislative and regulatory steps that will improve the reimbursement rate for doctors who treat Medi-Cal patients, said C. Duane Dauner, president and CEO of the Hospital Association.

Medi-Cal, which serves the state’s lowest-income families, has the second worst reimbursement rates in the United States, according to the Association.

If the efforts to address the issue through legislation and/or regulatory change fail, the two groups said they might pursue a ballot initiative.

The organizations did not disclose how much of the $100 million each side is contributing to the effort. They also declined to release the text of their agreement. They did say that it includes tenets for a code of conduct to govern conversations between union and hospital representatives. 

RELATED: Union launches effort to cap hospital pricing

One of the ballot initiatives the union had been pursuing would have limited hospital pricing, and the other would have capped executive pay.

Before Tuesday's deal was announced, the union had been on the verge of filing more than 500,000 signatures it had collected for the initiatives. It was gathering political endorsements, and had launched a media campaign, including radio ads asserting that some hospitals charge as much as $21 for an aspirin and $21,000 for a few stitches, while compensating executives with millions of dollars.

Now, the union and the Association say part of their joint effort will include addressing the hospital pricing and executive compensation issues.

The union's shift away from the initiatives represents a move from pursuing consumer-oriented changes to focusing on benefits for the union’s workforce, said Paul Ginsburg, Topping Professor at the Schaeffer Center for Health Policy and Economics at the University of Southern California.

Ginsburg said the union and the hospital industry have a common interest: increased revenue for hospitals and long-term employee security. If their efforts are successful, the union would have more to bargain for in the future.

The SEIU and the Association seem to have decided that they "have many common interests [and] ... should work together rather than fight," said Ginsburg.

Ginsburg said this collaboration reminds him of a similar partnership in New York between SEIU and the Greater New York Hospital Association.