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Hospitals Cash In on a Private Equity-Backed Trend: Concierge Physician Care

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Phil Galewitz, KFF Health News
Mon, 01 Apr 2024 09:00:00 +0000

Nonprofit hospitals created largely to serve the poor are adding concierge physician practices, charging annual membership fees of $2,000 or more for easier access to their .

It's a trend that began decades ago with physician practices. Thousands of doctors have shifted to the concierge model, in which they can increase their income while decreasing their patient load.

Northwestern Medicine in Chicago, Penn Medicine in Philadelphia, University Hospitals in the Cleveland area, and Baptist Health in Miami are among the large hospital offering concierge physician services. The fees, which can exceed $4,000 a year, are in addition to copayments, deductibles, and other charges not paid by patients' insurance plans.

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Critics of concierge medicine say the practice exacerbates primary care shortages, ensuring access only for the affluent, while driving up costs. But for tax-exempt hospitals, the financial can be twofold. Concierge fees new revenue directly and serve as a tool to help recruit and retain physicians. Those doctors then provide lucrative referrals of their well-heeled patients to the hospitals that employ them.

“Hospitals are attracted to physicians that offer concierge services because their patients do not come with bad debts or a need for charity care, and most of them have private insurance which pays the hospital very well,” said Gerard Anderson, a hospital finance expert at Johns Hopkins University.

“They are the ideal patient, from the hospitals' perspective.”

Concierge physicians typically limit their practices to a few hundred patients, compared with a couple of thousand for a traditional primary care doctor, so they can promise immediate access and longer visits.

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“Every time we see these models expand, we are contracting the availability of primary care doctors for the general population,” said Jewel Mullen, associate dean for health equity at the University of Texas-Austin's Dell Medical School. The former Connecticut health commissioner said concierge doctors join large hospital systems because of the institutions' reputations, while hospitals sign up concierge physicians to ensure referrals to specialists and inpatient care. “It helps hospitals secure a bigger piece of their market,” she said.

Concierge physicians typically promise same-day or next-day appointments. Many provide patients their mobile phone number.

Aaron Klein, who oversees the concierge physician practices at Baptist Health, said the program was initially intended to serve donors.

“High-end donors wanted to make sure they have doctors to care for them,” he said.

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Baptist opened its concierge program in 2019 and now has three practices across South Florida, where patients pay $2,500 a year.

“My philosophy is: It's better to give world-class care to a few hundred patients rather than provide inadequate care to a few thousand patients,” Klein said.

Concierge physician practices started more than 20 years ago, mainly in upscale such as Boca Raton, Florida, and La Jolla, California. They catered mostly to wealthy retirees willing to pay extra for better physician access. Some of the first physician practices to enter the business were backed by private equity firms.

One of the largest, Boca Raton-based MDVIP, has more than 1,100 physicians and more than 390,000 patients. It was started in 2000, and since 2014 private equity firms have owned a majority stake in the company.

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Some concierge physicians say their more attentive care means healthier patients. A study published last year by researchers at the University of California-Berkeley and University of Pennsylvania found no impact on mortality rates. What the study did find: higher costs.

Using Medicare claims data, the researchers found that concierge medicine enrollment corresponded with a 30%-50% increase in total health care spending by patients.

For hospitals, “this is an extension of them consolidating the market,” said Adam Leive, a study co-author and an assistant professor of public policy at UC Berkeley. Inova Health Care Services in Fairfax, Virginia, one of the state's largest tax-exempt hospital chains, employs 18 concierge doctors, who each handle no more than 400 patients. Those patients pay $2,200 a year for the privilege.

George Salem, 70, of McLean, Virginia, has been a patient in Inova's concierge practice for several years along with his wife. Earlier this year he slammed his finger in a hotel door, he said. As soon as he got home, he called his physician, who saw him immediately and stitched up the wound. He said he sees his doctor about 10 to 12 times a year.

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“I loved my internist before, but it was impossible to get to see him,” Salem said. Immediate access to his doctor “very much gives me peace of mind,” he said.

Craig Cheifetz, a vice president at Inova who oversees the concierge program, said the hospital system took interest in the model after MDVIP began moving aggressively into the Washington, D.C., suburbs about a decade ago. , Inova's program has 6,000 patients.

Cheifetz disputes the charge that concierge physician programs exacerbate primary care shortages. The model keeps doctors who were considering retiring early in the business with a lighter caseload, he said. And the fees amount to no more than a few dollars a day — about what some people spend on coffee, he said.

“Inova has an incredible primary care network for those who can't afford the concierge care,” he said. “We are still providing all that is necessary in primary care for those who need it.”

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Some hospitals are starting concierge physician practices far from their home locations. For example, Tampa General Hospital in Florida last year opened a concierge practice in upper-middle-class Palm Beach Gardens, a roughly three-hour from Tampa. Mount Sinai Health System in New York runs a concierge physician practice in West Palm Beach.

NCH System in Naples, Florida, employs 12 concierge physicians who treat about 3,000 patients total. “We found a need in this community for those who wanted a more personalized health care experience,” said James Brinkert, regional administrator for the system. Members pay an annual fee of at least $3,500.

NCH patients whose doctors convert to concierge and who don't want to pay the membership fee are referred to other primary care practices or to urgent care, Brinkert said.

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By: Phil Galewitz, KFF Health News
Title: Hospitals Cash In on a Private Equity-Backed Trend: Concierge Physician Care
Sourced From: kffhealthnews.org/news/article/concierge-medicine-physician-practices-hospitals-private-equity/
Published Date: Mon, 01 Apr 2024 09:00:00 +0000
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FDA Announces Recall of Heart Pumps Linked to Deaths and Injuries

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Daniel Chang and Holly K. Hacker
Tue, 16 Apr 2024 18:20:00 +0000

A pair of heart devices linked to hundreds of injuries and at least 14 deaths has received the FDA's most serious recall, the agency announced Monday.


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Patients Facing Death Are Opting for a Lifesaving Heart Device — But at What Risk?

The HeartMate 3 is considered the safest mechanical heart pump of its kind, but a federal database contains more than 4,500 reports in which the medical device may have caused or contributed to a patient's .

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The recall years after surgeons say they first noticed problems with the HeartMate II and HeartMate 3, manufactured by Thoratec Corp., a subsidiary of Abbott Laboratories. The devices are not currently being removed from the market. Abbott did not respond to KFF ' requests for comment.

The delayed action raises questions for some safety advocates about how and when issues with approved medical devices should be reported. The heart devices in question have been associated with thousands of reports of ' injuries and deaths, as described in a KFF Health News investigation late last year.

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“Why doesn't the public know?” said Sanket Dhruva, a cardiologist and an expert in medical device safety and regulation at the of California-San Francisco. Though some surgeons may have been aware of issues, others, particularly those who do not implant the device frequently, may have been in the dark. “And their patients are suffering adverse events,” he said.

The recall involves a pair of mechanical pumps that help the heart pump blood when it can't do so on its own. The devices, small enough to fit in the palm of a hand, are implanted in patients with end-stage heart failure who are waiting for a transplant or as a permanent solution when a transplant is not an option. The recall affects more than 13,000 devices.

Amanda Hils, an FDA press officer, said the agency is working with Abbott to investigate the reported injuries and deaths and determine if further action is needed.

“To date, the number of deaths reported appears consistent with the adverse events observed in the initial clinical trial,” Hils said in an email.

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According to the FDA's recall notice, the devices can cause buildup of “biological material” that reduces their ability to help the heart circulate blood and keep patients alive. The buildup accumulates gradually and can appear two years or more after a device is implanted in a patient's chest.

were advised to watch out for “low-flow alarms” on the devices and, if they do diagnose the obstruction, to either monitor the patient or perform surgery to implant a stent, release the blockage, or replace the pump.

A of the FDA device database shows at least 130 reports related to HeartMate II or 3 that mention the complication reported by regulators. The earliest such report filed with the FDA dates to at least 2020, according to a KFF Health News review of the database.

Monday's alert is the second Class 1 recall of a HeartMate device this year.

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In January, Abbott issued an urgent “correction letter” to hospitals about a separate issue in which the HeartMate 3 unintentionally starts and due to the pump's communication system, which cardiologists use to assess patients' status. The FDA alerted the public in March.

In February, Abbott issued another urgent letter to hospitals about the blockage problem, asking them to inform physicians, complete and return an acknowledgment form, and pay attention to low-flow alarms on the device's monitor that may indicate an obstruction. The company said in the letter that it is working on “a design solution” to prevent the blockages.

A study published in 2022 in the Journal of Thoracic and Cardiovascular Surgery reported the obstruction in about 3% of cases, though the incidence rate was higher the longer a patient had the device.

The only other Class 1 recall issued for the HeartMate 3 was in May 2018, when the company issued corrective action notices to hospitals and physicians warning that the graft line that carries blood from the pump to the aorta could twist and stop blood flow.

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The FDA recall notice issued Monday includes additional guidance for physicians to diagnose the blockage using an algorithm to detect obstructions and, if needed, a CT angiogram to verify the cause.

At present, the HeartMate 3, which was first approved by the FDA in 2017, is the only medical option for many patients with end-stage heart failure and who do not qualify for a transplant. The HeartMate 3 has supplanted the HeartMate II, which received FDA approval in 2008.

If the new recall leads to the device being removed from the market, end-stage heart failure patients could have no options, said Francis Pagani, a cardiothoracic surgeon at the University of Michigan who also oversees a proprietary database of HeartMate II and HeartMate 3 implants.

If that happens, “we are in trouble,” Pagani said. “It would be devastating to the patients to not have this option. It's not a perfect option — no pump ever is — but this is as good as it's ever been.”

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It's not known precisely how many patients have received a HeartMate II or HeartMate 3 implant. That information is proprietary. The FDA recall notices show worldwide distribution of more than 22,000 HeartMate 3 devices and more than 2,200 of the HeartMate II.

The blockage complication may have gone unreported to the public for so long partly because physicians are not required to report adverse events to federal regulators, said Madris Kinard, a former FDA medical device official and founder of Device Events, a company that makes FDA device data more user-friendly for hospitals, firms, and investors.

Only device manufacturers, device importers, and hospitals are required by law to report device-related injuries, deaths, and significant malfunctions to the FDA.

“If this is something physicians were aware of, but they weren't mandated to report to the FDA,” Kinard said, “at what point does that communication between those two groups need to happen?”

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Dhruva, the cardiologist, said he is looking for transparency from Abbott about what the company is doing to address the problem so he can have more thorough conversations with patients considering a HeartMate device.

“We're going to expect to have some data saying, ‘Hey we created this fix, and this fix works, and it doesn't cause a new problem.' That's what I want to know,” he said. “There's just a ton more that I feel in the dark about, to be honest, and I'm sure that patients and their families do as well.”

——————————
By: Daniel Chang and Holly K. Hacker
Title: FDA Announces Recall of Heart Pumps Linked to Deaths and Injuries
Sourced From: kffhealthnews.org/news/article/fda-recall-abbott-heart-pumps-heartmate-deaths-injuries/
Published Date: Tue, 16 Apr 2024 18:20:00 +0000

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Conservative Justices Stir Trouble for Republican Politicians on Abortion

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Rachana Pradhan
Tue, 16 Apr 2024 09:00:00 +0000

Abortion opponents have maneuvered in courthouses for years to end access to reproductive . In Arizona last , a win for the anti-abortion camp caused political blowback for Republican candidates in the state and beyond.

The reaction echoed the response to an Alabama Supreme Court decision over in vitro fertilization just two months before.

The election-year ruling by the Arizona Supreme Court allowing enforcement of a law from 1864 banning nearly all abortions startled Republican politicians, some of whom quickly turned to social media to denounce it.

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The court decision was yet another development forcing many Republicans legislators and candidates to thread the needle: Maintain support among anti-abortion voters while not damaging their electoral prospects this fall. This shifting power dynamic between state judges and state lawmakers has turned into a high-stakes political gamble, at times causing daunting problems, on a range of reproductive issues, for Republican candidates up and down the ballot.

“When the U.S. Supreme Court said give it back to the states, OK, well now the microscope is on the states,” said Jennifer Piatt, co-director of the Center for Public Health Law and Policy at Arizona State University's Sandra Day O'Connor College of Law. “We saw this in Alabama with the IVF decision,” she said, “and now we're seeing it in Arizona.”

Multiple Republicans have criticized the Arizona high court's decision on the 1864 law, which allows abortion only to save a pregnant woman's life. “This decision cannot stand. I categorically reject rolling back the clock to a time when was still legal and where we could lock up women and because of an abortion,” state Rep. Matt Gress said in a video April 9. All four Arizona Supreme Court justices who said the long-dormant Arizona abortion ban could be enforced were appointed by former Gov. Doug Ducey, a Republican who in 2016 expanded the number of state Supreme Court justices from five to seven and cemented the bench's conservative majority.

Yet in a post the day of the ruling on the social platform X, Ducey said the decision “is not the outcome I would have preferred.”

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The irony is that the decision came after years of efforts by Arizona Republicans “to lock in a conservative majority on the court at the same time that the state's politics were shifting more towards the middle,” said Douglas Keith, senior counsel at the left-leaning Brennan Center for Justice.

All the while, anti-abortion groups have been pressuring Republicans to clearly define where they stand.

“Whether running for office at the state or federal level, Arizona Republicans cannot adopt the losing ostrich strategy of burying their heads in the sand on the issue of abortion and allowing Democrats to define them,” Kelsey Pritchard, a spokesperson for Susan B. Anthony Pro-Life America, said in an emailed statement. “To win, Republicans must be clear on the pro-life protections they support, express compassion for women and unborn children, and contrast their position with the Democrat agenda.”

Two months before the Arizona decision, the Alabama Supreme Court said frozen embryos from in vitro fertilization can be considered children under state law. The decision prompted clinics across the state to halt fertility treatments and caused a nationwide uproar over reproductive health rights. With Republicans feeling the heat, Alabama lawmakers scrambled to pass a law to shield IVF providers from prosecution and civil lawsuits “for the damage to or of an embryo” during treatment.

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But when it to courts, Arizona lawmakers are doubling down: state Supreme Court justices are appointed by the governor but generally face voters every six years in retention elections. That could soon change. A constitutional amendment referred by the Arizona Legislature that could appear on the November ballot would eliminate those regular elections — triggering them only under limited circumstances — and allow the justices to serve as long as they exhibit “good behavior.” Effectively it would grant justices lifetime appointments until age 70, when they must retire.

Even with the backlash against the Arizona court's abortion decision, Keith said, “I suspect there aren't Republicans in the state right now who are lamenting all these changes to entrench a conservative majority on the Supreme Court.”

Meanwhile, abortion rights groups are to get a voter-led state constitutional amendment on the ballot that would protect abortion access until fetal viability and allow abortions afterward to protect the life or health of the pregnant person.

State court decisions are causing headaches even at the very top of the Republican ticket. In an announcement in which he declined to endorse a national abortion ban, presumptive Republican presidential nominee Donald Trump on April 8 said he was “proudly the person responsible” for ending Roe v. Wade, which recognized a federal constitutional right to abortion before being overturned by the U.S. Supreme Court in 2022, and said the issue should be left to states. “The states will determine by vote or legislation, or perhaps both, and whatever they decide must be the law of the land,” he said. But just two days later he sought to distance himself from the Arizona decision. Trump also praised the Alabama Legislature for enacting the law aiming to preserve access to fertility treatments. “The Republican Party should always be on the side of the miracle of life,” he said.

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Recent court decisions on reproductive health issues in Alabama, Arizona, and Florida will hardly be the last. The Iowa Supreme Court, which underwent a conservative overhaul in recent years, on April 11 heard arguments on the state's near-total abortion ban. Republican Gov. Kim Reynolds signed it into law in 2023 but it has been blocked in court.

In Florida, there was disappointment all around after dueling state Supreme Court decisions this month that simultaneously paved the way for a near-total abortion ban and also allowed a ballot measure that would enshrine abortion rights in the state constitution to proceed.

The Florida high court's decisions were “simply unacceptable when five of the current seven sitting justices on the court were appointed by Republican Governor Ron DeSantis,” Andrew Shirvell, executive director of the anti-abortion group Florida Voice for the Unborn, said in a statement. “Clearly, grassroots pro-life advocates have been misled by elements within the ‘pro-life, pro- establishment' because Florida's highest court has now revealed itself to be a paper tiger when it comes to standing-up to the murderous abortion industry.”

Tension between state judicial and conservative legislators seems destined to continue given judges' growing power over reproductive health access, Piatt said, with people on both sides of the political aisle asking: “Is this a court that is potentially going to give me politically what I'm looking for?”

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——————————
By: Rachana Pradhan
Title: Conservative Justices Stir Trouble for Republican Politicians on Abortion
Sourced From: kffhealthnews.org/news/article/states-conservative-justices-republican-politicians-abortion/
Published Date: Tue, 16 Apr 2024 09:00:00 +0000

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California Health Workers May Face Rude Awakening With $25 Minimum Wage Law

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Don Thompson
Tue, 16 Apr 2024 09:00:00 +0000

SACRAMENTO, Calif. — Nearly a half-million workers who stand to benefit from California's nation-leading $25 minimum wage law could be in for a rude awakening if hospitals and other health care providers follow through on potential cuts to hours and benefits.

A medical industry challenge to a new minimum wage ordinance in one Southern California suggests layoffs and reductions in hours and benefits, including cuts to premium pay and vacation time, could be one result of a state set to begin phasing in in June. However, some experts are skeptical of that possibility.

The California Hospital Association brought a partly successful legal challenge to Inglewood's $25 minimum wage ordinance, which barred employers from taking those sorts of steps to offset their higher costs.

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“Layoffs, reductions in premium pay rates, reductions in non-wage benefits, reductions in hours, and increased charges are consequences of an employer less money to spend—which will necessarily be the case given the significant increase in spending on wages due to the minimum wage,” the association said in its lawsuit. Additional examples include reducing health coverage and charging for parking or work-related equipment.

Inglewood voters approved the ordinance in November 2022, nearly a year before California legislators enacted a $25 minimum wage for health workers. Those statewide higher wages are to be phased in starting in June under California's first-in-the-nation law, but Gov. Gavin Newsom has since said they are too expensive as the state faces a deficit estimated between $38 billion and $73 billion. It's unclear if lawmakers will agree to a delay or take other steps to reduce the cost.

U.S. District Judge Dale S. Fischer agreed with the hospital industry in a March 11 tentative ruling when he shot down the portion of Inglewood's ordinance banning layoffs and clawbacks by employers, while allowing the rest of the ordinance to remain in effect. He gave the sides time to object to his preliminary , though none did.

The California Hospital Association represents more than 400 hospitals and was a key backer of the state's carefully crafted compromise law, which notably contains none of the employee safeguards included in the Inglewood ordinance.

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Spokesperson Jan Emerson-Shea said the association doesn't know how providers will react once the state law takes effect. “We don't have any insights,” she said.

“The challenge for any health care organization is figuring out how to pay for the higher wages,” said Joanne Spetz, director of the Philip R. Lee Institute for Health Policy Studies at the University of California-San Francisco. “Since labor costs are the largest part of any health care organization's costs, it's hard to figure out how to reduce spending without looking at labor costs.”

Providers can try to increase revenues by bargaining for higher reimbursements from commercial insurers, she said. Public hospitals, nursing homes, and community clinics get most of their money through Medi-Cal, the state's Medicaid program.

Providers could reduce the services they offer, pare back charity care, and cut or delay capital investments, Spetz said. In the long term, she expects some combination of spending cuts and revenue increases.

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Both the state law and local ordinance far more than and nurses, with a definition of health worker that includes janitors, housekeepers, groundskeepers, security guards, food service workers, laundry workers, and clerical staff.

The most recent estimate by the Health Care Program at the University of California-Berkeley Labor Center is that as many as 426,000 health workers would make an average of $6,400 extra in the law's first year, a 19% average pay bump mainly benefiting lower-income workers of color and women. State finance officials that well over 500,000 workers will benefit.

Researchers didn't include layoffs and other potential staffing and benefit reductions when they projected the state law's costs and benefits, said Laurel Lucia, the program's director. But she pointed to initial projections by hospitals, doctors, and business and taxpayer groups that the wage hike would cost $8 annually, thereby imperiling services and resulting in higher premiums and higher costs for state and local governments.

“It seems like a contradiction to say this law's going to cost billions of dollars while at the same time saying it's going to reduce workers' total compensation,” said Lucia, who projects a far lower price tag.

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She added that state finance officials had anticipated that Medi-Cal reimbursements would reflect the increased labor costs, while Medicare would eventually at least partially compensate for the higher labor costs.

Michael Reich, chair of the Center on Wage and Employment Dynamics at UC Berkeley's Institute for Research on Labor and Employment, and affiliated economist Justin Wiltshire recently argued that California's new $20 minimum wage law for fast-food workers won't result in mass layoffs and price increases, as some have predicted.

Health care is much different than fast food, Reich acknowledged, but he argued for much the same positive result.

“A higher minimum wage will make it easier and cheaper for hospitals to recruit and retain these workers. The cost savings, and the productivity benefits of more experienced workers, could offset much of the labor cost increase,” Reich said.

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The hospital association filed its lawsuit against Inglewood's ordinance in July, while it was still opposing early versions of the statewide minimum wage legislation. Among many other provisions, the statewide law put on hold an initiative to cap hospital executives' salaries in Los Angeles.

The hospital association's legal challenge referenced in part layoffs and reduced working hours imposed by Centinela Hospital Medical Center after Inglewood's ordinance took effect.

But Centinela said the reduction was entirely unrelated to the ordinance and that all staff were offered alternate positions, which many accepted.

“Centinela Hospital also has since added many more jobs in new clinical positions above minimum wage scale,” the hospital said in a statement.

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Service Employees International Union-United Healthcare Workers West, the prime backer of both the local ordinance and the statewide law, sued the hospital in April 2023 alleging that it cut workers' hours to offset the higher minimum wage. The case is still pending.

The union did not respond to repeated requests for comment.

In a court filing, however, the union and city of Inglewood said similar employer restrictions in previous minimum wage laws have survived.

The ordinance “merely sets the backdrop for collective bargaining negotiations,” and does not bar employers from locking out employees or hiring replacement workers during a strike. Employers can still lay off workers or reduce their hours, they said, so long as they don't do so to fund the higher minimum wage.

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But Fischer agreed with the hospital association that layoffs and reductions in employees' total compensation packages are “obvious responses by an employer to rising compensation costs.”

Restricting employers' options would violate federal labor relations rules, he said.

“The minimum wage an employer has to pay its employees will invariably affect the total amount of compensation it is able or willing to pay,” he wrote “This will then invariably affect the number of employees it can retain and the number of hours those employees will be to work.”

This article was produced by KFF Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation. 

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——————————
By: Don Thompson
Title: California Health Workers May Face Rude Awakening With $25 Minimum Wage Law
Sourced From: kffhealthnews.org/news/article/california-health-workers-25-dollar-wage-cuts/
Published Date: Tue, 16 Apr 2024 09:00:00 +0000

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