Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: MONDAY, February 10, 1992 TAG: 9202100139
SECTION: VIRGINIA PAGE: A-1 EDITION: METRO
SOURCE: THOMAS BOYER and ROB EURE STAFF WRITERS
DATELINE: RICHMOND LENGTH: Long
BIDDERS BACK WILDER
Gov. Douglas Wilder, scorned by most of the medical industry over his plan to tax hospitals, nursing homes and doctors, has enlisted the aid of two medical giants, both of which also are vying for a multimillion-dollar state contract.The Wilder allies, Blue Cross and Blue Shield of Virginia and Norfolk-based First Hospital Corp., are finalists for a state employee mental health services contract worth an estimated $20 million over two years. The Wilder administration could award the contract any day.
First Hospital chairman Ronald I. Dozoretz, whose stake in the contract is through First Hospital subsidiary FHC Options, has voiced support for Wilder's health-care initiative. According to legislators and lobbyists, Dozoretz has offered to mediate a compromise between Wilder and the industry.
Meanwhile, Blue Cross chairman and chief executive Norwood H. Davis Jr. recently wrote a letter saying Wilder's tax would not trigger higher insurance rates - as long as hospitals didn't pass the costs on.
Who will finally pay the $30 million-a-year tax has been the main point of contention over Wilder's health-care reform plan. The industry maintains the tax will be passed to patients and their insurers. Wilder says he would make that illegal, and that the industry can absorb the tax by operating more efficiently.
Davis' letter was distributed by the governor's office Friday and cited as evidence against hospital claims that the new levy would be a tax on the sick.
The third finalist for the state employee contract, government and industry sources say, is Norfolk-based Sentara Health System. Sentara has kept a low profile in the debate over Wilder's proposals.
Though the contract was to be awarded Jan. 20, it has been delayed. State officials have not disclosed the reason for the delay.
Last week, after the Virginia Hospital Association marshalled hundreds of hospital workers from around the state to bombard legislators with petitions opposing the tax, Wilder called it "the most intense lobbying effort I've seen since I've been down here."
But Wilder and his aides have pulled strings, too. In an interesting twist, the administration has lobbied the lobbyists, pressuring special-interest groups to endorse the plan.
Officials of a variety of groups say they've met with Wilder's chief of staff, J.T. Shropshire, or Howard M. Cullum, the secretary of health and human resources, and been told that if the tax fails, cuts in cherished state programs would follow. The Virginia Education Association, the Virginia Governmental Employees Association and the American Association of Retired Persons are among groups that have endorsed the plan; all have members who could suffer if there are cuts in school aid, employee benefits or Medicaid.
Glenn Davidson, Wilder's press secretary, acknowledged that Wilder has sought support from statewide groups as well as newspaper editorial pages. But he said the endorsements generally have been unsolicited. For all those who've backed the plan, and particularly in the cases of Blue Cross and First Hospital, "there's no quid pro quo here," Davidson said.
"There was not a full court press made to enlist the support of these organizations," he said.
Steve Haner, director of the joint Republican caucus and an often-acerbic Wilder critic, said it was at least an odd coincidence that Blue Cross and First Hospital officials were offering help to the governor while the mental health contract was pending.
"This has added a new wrinkle to the bidding process," Haner said. "It makes you wonder if the governor has used the contract to wring these endorsements out of them."
Dozoretz declined to be interviewed for this story. David Iwans, a First Hospital spokesman, said Dozoretz believes the health-provider tax is "worth exploring" and would like to see a compromise. First Hospital, as a for-profit corporation, already pays state sales, income and property taxes, unlike nonprofit hospitals such as as Sentara.
Dozoretz's stand has irritated his colleagues in the health-care industry. Lobbyists working against the tax plan have grumbled privately about it while the mental-health contract is pending.
But his support apparently has not translated into active lobbying.
"I know he's strongly in favor of it; he came by to see me," said Sen. Stanley C. Walker, D-Norfolk, main sponsor of the health-care tax in the Senate. But a half-dozen other lawmakers from Hampton Roads said they had not heard from Dozoretz, and several expressed surprise that he was not opposing the tax.
Both Dozoretz and Blue Cross's Davis have been fund-raisers for the Democratic Party. Dozoretz has supported a long line of Democrats from former Lt. Gov. Richard Davis of Portsmouth to Wilder, and has tested the waters for a statewide bid himself. State Democratic Party Chairman and longtime Wilder political adviser Paul Goldman recently registered as a paid lobbyist for First Hospital but said he is not lobbying on the health-care tax.
Davis' letter, dated Jan. 30, offers Blue Cross' support for some aspects of Wilder's health-care package, such as expanded state-sponsored medical care for children in poverty, and tighter controls on hospital purchases of expensive high-tech machines. But it stops short of an endorsement of the tax.
Blue Cross sources said, and Davidson denied, that Wilder aides were dissatisfied with the letter and unsuccessfully sought more explicit backing. Davis' letter, dated Jan. 30, was released by the governor's office more than a week later - to the apparent surprise of Blue Cross. The insurer's public-affairs office was initially unaware of the release Friday from Wilder's office, but said Davis' letter accurately portrayed its position.
Davis' letter makes clear as well that lobbying hasn't been confined to Wilder's third-floor offices.
It begins, "Dear Governor Wilder: It was good to see you at the Super Bowl and have the opportunity to chat briefly with you . . ."
Keywords:
GENERAL ASSEMBLY