A bill that claims to address health care worker retention in fact jeopardizes health care jobs, treats California’s essential workers inequitably, and reduces access to care throughout the state.
Senate Bill (SB) 525 (Durazo, D-Los Angeles) would increase the minimum wage for all workers in all health care settings — including all paid work occurring on hospital premises (for example, delivery drivers, repair workers, and ride share or medical transport workers) regardless of whether they are employed by an entity other than the hospital — to $25 an hour starting Jan. 1, 2024. That amount would increase by 3.5% every year or inflation, whichever is greater.
This comes at a time when California hospitals continue to grapple with an unprecedented financial crisis, and patients are already seeing a degradation in their access to health care services. The bottom line is that this bill further threatens hospitals’ ability to care for patients, leading to more uncertainty and diminished care for every community in California.
That’s why CHA is part of a broad coalition opposing this bill — because no matter how committed hospitals are to supporting the women and men who help deliver health care in California, SB 525 cannot escape four glaring problems:
- SB 525 would reduce access to critical health care services. The cost to care for patients will increase at hospitals, nursing homes, physician offices, reproductive health clinics, federally qualified health centers, and more. For the hundreds of health providers facing deep financial distress, the increase in labor costs will require the reduction or elimination of health services or even bankruptcy and outright closure. This would be catastrophic for disadvantaged communities already facing challenges accessing critical health care services.
- SB 525 would increase health care costs. Compensation for hospital workers makes up nearly 60% of the cost of providing care. Increasing labor expenses by billions of dollars overnight means higher costs to deliver health care in California, greater costs for employers providing health insurance coverage, and higher costs for individuals purchasing health insurance for themselves and their family.
- SB 525 would lead to fewer health care jobs. Hospitals and other providers will have no choice but to cut positions and services to comply. With fewer positions and potentially fewer providers, health care professionals will have fewer opportunities, be at heightened risk of job loss, and have less flexibility in the positions that are available.
- SB 525 would treat employees inequitably. This bill picks winners and losers, raising income for a select few in the health care sector while increasing costs for everyone working in other fields. Other essential employees, such as grocery store, agricultural, and school workers, will be left behind and will face higher insurance costs to cover the increased wages for those in the health sector.
Most importantly, SB 525 simply fails to recognize the increasing fragility of California’s health care system. Every day, hospitals teeter on the edge of a financial cliff and communities are left in limbo, wondering whether the emergency services, maternity care, and strong hospital jobs they rely on will continue to exist in the coming weeks and months.