Assessing the Proposed Hospital Assessment

Reading through some of the press coverage of Doyle's budget proposal from around the state, it's pretty clear that the governor is in for a battle over the hospital assessment.

Opposition in the La Crosse Tribune. Opposition in the Manitowoc Herald Times Reporter. Opposition in the Wausau Daily Herald.

Granted, all of the opposition is coming from hospital executives who would be the ones accounting for the assessment. But, the thing is, hospital execs seem to have a bit of an edge over other business execs when it comes to public perception since their facilities provide such an obvious benefit to the public good.

When Exxon Mobil execs complain about a tax, for instance, it isn't going to be looked upon with nearly as much public sympathy as when complaints come from the place that helped grandma get better after her fall or little Timmy after he stuck a pencil in his ear.

And when you add to that recent reports that the Wisconsin Hospital Association was third in lobbyist spending during the last legislative session -- just a hair behind WEAC -- the hill that the governor needs to climb looks even steeper. Indeed, I imagine $1.5 million goes a long way in a single legislative session at the State Capitol.

But at least one health care provider organization in the state is backing the hospital assessment. According to the president of the Wisconsin Federation of Nurses and Health Professionals (WFNHP), "Non-profit hospitals enjoy a special tax status which means they pay no taxes. Governor Doyle’s proposal to require hospitals to pay a small fee based on the number of beds is one way the hospitals can give back to the community."

Makes you wonder about the differences in priorities between those providing the facilities for health care and some of those actually providing the health care. Yet, it may not be too surprising, since it's arguable that the WFNHP simply isn't made up of the people who would be cutting the assessment check, so it follows that the group wouldn't be as concerned about it.

On the other hand, it shouldn't be assumed that the WFNHP doesn't have an interest in the financial viability of the facilities where its 3000 statewide members work. And, the fact remains, most health systems and independent hospitals in the state would be getting more money back, at least in the short run, than they would be putting into the assessment pot due to matching federal dollars.

That's where my concern still lies, however. Tying your hopes to federal dollars is a risky business. Just look at the Wisconsin Shares program. When the feds catch wind that the state has set up a system designed explicitly to generate federal money, a few simple regulation changes could throw a major wrench into the works, which appears to be what happened in Connecticut.

That's why it would be comforting to see some assurances that this proposed set-up is a short term plan, not a system for the long haul -- one biennium, maybe two.

And it would probably also help the plan's chance of passing to establish some sort of mechanism for ensuring that no health systems or individual hospitals loose money on the deal. In other words, everyone would either get more back than they put in or at least break even on their assessment charges. According to this chart of how systems and independent hospitals would fair under the proposed assessment, it would take about $18 million over the biennium to get everyone out of the red.

But I still wonder if it's worth all of the trouble to fight for and establish a system that may only be stable for a few years. And, on the whole, the plan still amounts to just tinkering with our existing broken system.

As I noted last week, if we're tinkering with anything, it should be the fundamental health care reform proposals that currently sit before the legislature, not our fundamentally flawed health care system.