Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, January 12, 1992 TAG: 9201120156
SECTION: VIRGINIA PAGE: D1 EDITION: METRO
SOURCE: THOMAS BOYER STAFF WRITER
DATELINE: RICHMOND LENGTH: Medium
WILDER TAKES ON BIG FOES
His presidential campaign over, Gov. Douglas Wilder is now considered a longshot in a different arena: the fight for his budget. Now his adversaries aren't Jesse Jackson or Bill Clinton but the Virginia Medical Society and the Virginia Hospital Association.The two lobbying colossi are battling Wilder's plans to impose $34 million a year in taxes on doctors, hospitals, nursing homes and pharmacists - collectively among the state's biggest political spenders - to help pay the soaring costs of health care for the poor. And Wilder isn't thought to have much of a chance of winning.
"I haven't heard anybody supportive of it other than the governor," Sen. Mark Earley, R-Chesapeake, said Friday as the Senate adjourned for the weekend.
Wilder's secretary of Health and Human Resources, Howard Cullum, acknowledged his only hope of victory is to take his case directly to voters, hoping public opinion will overpower the medical lobby.
"I think the administration's going to make an effort to get a public groundswell on it," Cullum said. "It's the only way; the issue cannot be won in the General Assembly because the industry has too much clout."
Indeed, the battle over the tax already has become one of public relations, of "spin control." The central point of argument: Who actually pays the tax?
The Hospital Association says patients, or their insurance companies, will pay in the end. Health care providers will simply add the tax to their bills, the association contends, so that it will become a tax on the sick.
"The hospital, in effect, becomes the tax collector," said Bruce Rueben, senior vice president of the hospital association.
"The governor's new budget proposal . . . sends the message that human service programs should be the responsibility of the providing businesses," argued Glenn Mitchell, chief executive officer of Hampton Roads' largest health care provider. "Does this mean that some day grocers will fund the food-stamp program?
"Taxing health care will only fuel the rise in the number of people who can't afford health care because it will force both health care and insurance costs up as providers are forced to pass the increased costs onto their patients," Mitchell's prepared statement added.
But Cullum, pointing to healthy increases in hospital profits in recent years, says many health-care providers could absorb the tax painlessly simply by lowering their costs 1/2 of one percent. He points out that many state agencies have been cut 50 times that much.
Wilder administration officials also point to the projected $750 million in Virginia hospital profits over the next two years - at a time when the rest of the state's economy is mired in recession.
The hospital association responds that not all Virginia hospitals are profitable - and it's at financially struggling rural or inner-city hospitals that the tax most likely would be passed on to patients.
Regardless of the arguments, Wilder couldn't have picked a fight with tougher opponents. The health care lobby was ranked fourth most effective among 22 industry groups in a 1990 Virginian-Pilot and Ledger-Star survey of legislators, lobbyists, state officials and reporters. Hospitals ranked ahead of insurance companies, land developers and schoolteachers in clout.
Hospital and nursing home political action committees gave more than $115,000 to General Assembly candidates last year, and doctors probably spent even more. Medical professionals and their PACs gave $303,000 to General Assembly members four years ago, according to a Virginian-Pilot analysis of contributions after that election, more than any group except builders and lawyers.
Even before Wilder made his budget public last week, opponents were rallying. The Medical Society of Virginia, the state doctors' group, lobbied legislators at a reception Tuesday. And the Hospital Association devoted its December newsletter to arguments against the tax.
There is one big factor working in Wilder's favor, however. If lawmakers kill the tax, they'll have to find $68 million elsewhere to balance the state's two-year budget.
NOTE: SEE MICROFILM FOR CHART ON INCREASING HOSPITAL CHARGES