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Averting a costly ballot fight, a prominent labor union has agreed to pull a pair of measures that would limit how California hospitals price medical care and compensate their executives.

The union dropped the effort after reaching what officials described as a sweeping labor agreement with the California Hospital Association, an organization that had been poised to battle the union over its ballot campaign. Officials from the two organizations described the agreement only n vague terms.

Service Employees International Union-United Healthcare Workers had described wildly inflated hospital prices as a burden on the healthcare system, pointing to hefty price tags on everything from medical procedures to bandages. The union also argued for caps on executive compensation at nonprofit hospitals.

All along, medical industry critics depicted the two-pronged campaign as a union ploy to put more pressure on hospitals and win more concessions for workers. Money had already started flowing for the ballot push, with SEIU reporting having raised $5.7 million through March of this year.

Now the two sides have found a compromise. The California Hospital Association and SEIU-UHW announced they struck a deal on Monday night to enshrine a new labor agreement and to launch a $100 million campaign for changes to Medi-Cal, the state's insurance program for the poor and indigent.

"We have continuously been striving to find a non-initiative solution," C. Duane Dauner, president of the California Hospital Association, said in a conference call on Tuesday morning.

In a deal that will run through the end of 2017, the two sides have agreed to what SEIU-UHW president Dave Regan called a "set of reciprocal commitments." He offered no concrete details about what those commitments entail, saying only that they surpass what the National Labor Relations Act requires.

"There's a lot of different segments to it but the commitments are substantial and clearly cover a majority of the industry," Regan said.

Without elaborating on the specifics, Regan suggested the that the deal effects sweeping changes to the relationship between hospitals and their employees. He portrayed the new configuration as a way to keep unions relevant.

"I think it's obvious that unions in America are in steep decline. That's just an obvious truth," Regan said, adding that "we don't want to look at unionism in the way its traditionally been, which is a zero-sum game between unions and employers."

A centerpiece of the new relationship will surround deploying a $100 million joint advocacy fund in an attempt to address Medi-Cal issues, although the specific area of advocacy remains undecided. If a legislative or regulatory fix hasn't yet emerged, Regan said, the effort could go to to the November 2016 ballot.

Dauner declined to elaborate on who will pay what into the fund but said the political effort could encompass everything from helping California do a better job of obtaining federal matching funds to dealing with reimbursement rates.

"It's broader than just saying we are going to go and try and get a lot of money out of the general fund to increase payments," Dauner said. "It is a broad and comprehensive approach to fitting Medi-Cal into the changing health care system."

This is the second consecutive year the union had pitched a pair of similar ballot initiatives. Last year, SEIU pushed measures to harness excessive billing and increase health care for the indigent, but withdrew the proposals after reaching an agreement that enlisted the hospital industry in various organizing efforts. Both Dauner and Regan described the new deal as stronger.

"We had disagreements and there were disappointments in the way we accomplished things under the first agreement," Dauner said.

Christopher Cadelago of The Bee Capitol Bureau contributed to this report.

PHOTO: A registered nurse at Kaiser Permanente Roseville Medical Center with some of the blue polypropylene wraps used to package surgical kits on July 26, 2010. The Sacramento Bee/Manny Crisostomo.


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