April 10, 2023 - Business Journal
Written by Alex Scott
Introduced by State Senator Maria Elena Durazo, Senate Bill 525 would raise the minimum wage for health care workers to $25 per hour. According to a spokesperson from Service Employees International Union -United Healthcare Workers West (SEIU-UHW), the bill aims to help those that receive the lowest wages in the health care industry.ﾂ
The bill would raise the minimum wage not just for nurses, but for other support staff as well. Positions that would be able to receive the pay increase include patient care technicians, nursing home caregivers, janitorial and housekeeping staff, security guards and clerical workers, dietary and food service workers and more.
"SB 525 would affect any healthcare worker who is providing services that directly or indirectly support patient care," said Rene Saldana, press secretary for SEIU-UHW. "Everybody who you see or come across in the hospital, from the person who makes your appointment to the person who checks you into the hospital or facility, it would affect all of them."
Formulated in response to the health care workforce crisis, Saldana said the bill would help retain and attract health care workers that the state needs in order to continue providing high-quality health care in California.
According to Saldana, SB 525 would not affect just hospitals or those working in general medicine. The bill would make it required for all healthcare workers in various specialties and departments to receive the minimum wage increase, including:
Opponents of the bill have raised concern on the effect a higher minimum wage would have on the state economy, as California and the country face some of the highest inflation rates ever seen. Combined with the healthcare industry losing workers at an alarming rate, a trend that at the moment has no end in sight, there is concern as to how hospitals will be able stay afloat and be able to keep paying their current employees with an additional financial obligation.
Saldana shared that though she understands the concerns, there are many hospitals in the state who can afford to pay its workers the new minimum wage. The union believes that this bill will help those workers stay afloat during trying times and would help retain employees considering leaving the industry for higher-paying jobs.
"I think a bigger concern right now is that workers are leaving healthcare settings because they’re making more money outside of health care settings," said Saldana. "There are very wealthy health care systems such as Dignity Health, Cedars-Sinai Medical Center, Kaiser Permanente, and HCA Health Care who have the money and can afford to do this. Workers right now are suffering from inflation and at the lowest end of the spectrum, they’re leaving for non-hospital settings because they can make more money without the risks."
Kathy Fairbanks, spokeswoman for the Protect Access to Care coalition, No on SB 525, shared that the issue is not that simple.
According to Fairbanks, SB 525 will increase costs for all health care providers by billions of dollars annually and will mean deeper cuts in revenue and lead to more closures. This would drastically impact not just hospitals but free clinics and reproductive health and pregnancy care centers to name a few.
Furthermore, with healthcare providers already under water, the bill would reduce employment opportunities statewide. This would lead to a reduction of services and increased costs, creating an unintended effect where health care workers will lose their jobs - jeopardizing patient care.
"You're probably aware that there was a hospital that just closed at the beginning of the year in Madera because they were operating in the red, and they couldn’t afford to stay open," said Fairbanks. "If this were to impact other hospitals in that area, the people of Madera and the cities around there are in trouble because they lost one hospital, what if they lose a second?"
Kaweah Health in Visalia is one hospital that would be majorly impacted by SB 525, according to CEO Gary Herbst.
By Kaweah's estimates, SB 525 would increase labor costs by more than $25 million per year and would not come with any additional funding, said Herbst. California hospitals are already struggling from the financial devastation caused by the COVID-19 pandemic and are now facing the aftermath. Within the first eight months of the current fiscal year, Kaweah experienced a net operating loss of $42 million.
"We have already had to lay-off staff, close unprofitable services, enact wage cuts for our leaders, forgo matching of our employee 401(k) plan contributions and reduce access to elective surgeries for our Medi-Cal population just to keep our doors open," said Herbst. "Enacting such legislation would only accelerate the demise of the California hospital industry."
According to Fairbanks, there are many organizations and hospitals opposing the bill because of the broad language used within SB 525. The worry is that, even though it is in the early stages of the legislative process, the bill will negatively impact health care facilities already struggling amid the COVID-19 pandemic and can't absorb another massive financial hit.
"It really can have ripple effects far beyond just the closure of a hospital or the closure of a community clinic," said Fairbanks.
California Nursing Association/National Nurses United (CAN) also opposes SB 525 on grounds that it would lower the wage floor for residential nurses, which would incentivize employers to expand workplace practices that harm nurses and patients alike.
In an opposition letter addressed to Senator Durazo, the nurses association argues that setting an industry specific minimum wage of $25 per hour across the board will not aid in recruiting and retaining more nurses because they already earn significantly more. As a result, CNA is concerned that setting the minimum wage at $25 per hour would signal to employers that the legislature is giving them the green light to reduce wages.
Additionally, the association is concerned that the bill would allow employers to lower wages through telehealth expansion, which would establish unsafe conditions for the patients and nurses.
The nurses association argues that by lowering the wage floor, SB 525 would incentivize employers to shift nursing tasks to remote and telemonitoring RNs, who are paid less than unionized, permanent RNs who are able to provide direct in-person care.
Puneet Maharaj, director of government relation for CAN, argues that attempts to move acute hospital care to patient homes can lead to misdiagnosing a patient's overall condition, leading to greater risk of illness or disease.
"Subtle changes in a patient’s skin tone, respiratory rate, demeanor, and affect provide critical information to patient health and wellbeing, which can be easily overlooked in a telehealth appointment or remote monitoring of acute hospital care provided in the home," said Maharaj.
SB 525 is scheduled to be presented at the Senate Labor, Public Employment and Retirement Committee hearing on April 12; if passed, the legislation that would increase the minimum wage for all health care workers in California to $25 an hour beginning January 2024.