States deal with hospital fees, medical industry concerns and levies on physician payments

Recent state developments include a pending tax on hospitals in California, resistance to health system change in the Missouri medical community and a proposed tax on physician fees in Michigan.

The Los Angeles Times: In California, a proposed tax on hospitals would make them "eligible for $2 billion in federal funds as Medi-Cal subsidies," but anti-tax groups oppose the bill. "The proposal is sitting on the governor's desk," and "hospital officials are begging Gov. Arnold Schwarzenegger to sign it into law. In fact, they thought it up," because the federal funds "would more than offset the new fees." But "fiscal conservatives are trying to persuade the governor to block the new levies on the institutions that want them." Hospitals say the alternative "is leaving the federal money on the table -- and California last in the nation in its reimbursements for doctors and hospitals through Medicaid, the national umbrella program under which Medi-Cal operates." The governor has not said whether he will sign the bill, " [b]ut those involved in negotiations say the administration has signaled an inclination to veto it, pointing to concerns raised by anti-tax groups" (Halper, 10/7).

In Missouri, "Kansas City's medical and business communities appear more resistant to major changes in health care than the public at large," The Kansas City Star reports. "In a survey to be released today, more than half of the area's health care 'insiders' — doctors, employers, and hospital executives — said they 'agree or strongly agree' with keeping the current health care system in place. Only one-third of the general public agrees with that alternative, the survey found. Instead, nearly half of those responding — 47 percent — said they would like a public health insurance company to compete with private insurers. Just 8 percent of the insiders agreed or strongly agreed with the public option approach" (Helling, 10/6).

And the state House in Michigan "passed tax bills Tuesday that levy a 3 percent tax on physician services and freeze the personal exemption from the income tax as part of a package to raise money to soften budget cuts," The Detroit News reports. "The tax on non-Medicaid physician services is expected to raise $300 million in revenue, and would leverage $525 million in federal matching funds for health care for the poor and seniors… Democrats intend the revenue increase bills to reduce cuts in college scholarships, school aid, local police and fire protection, and health care programs for the poor and seniors" (Hornbeck and Bouffard, 10/7).

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.