"Magic bullet" sick tax ready to slay consumers

This shapes up to be a big week in Louisiana politics – will business as usual or will a new tone of sensible, people-oriented fiscal policy prevail in the battle over the state’s next budget? The first battle in the war between these ideologies may come over health care – but not in the way many anticipated.

It appears that, after a lot of talk otherwise, Gov. Kathleen Blanco has thrown her lot in the “business as usual” crowd. No greater indicator of this can be her abandonment of trying to reform the health care fiscal structure of the state in order to use existing funds more efficiently in favor of embracing the same old tax-and-spend strategy that lies behind a 1.5 percent tax on hospital revenues.

The “magic” behind all of this is that “the cost of this fee or includ[ing] the fee as an
itemized and separately listed amount on any statement” cannot be “sent to any patient,
responsible party, insurer, or self-insured employer program.” In other words, it’s the old “somebody else pays for it” dodge that is a myth. Let me assure you, consumers of health care will pay for it. One way would be to jack up expenses for procedures, but if government reimbursement rates won’t allow for that (for those places that have any – specialty hospitals who deal with private-pay only don’t have to follow them), there are plenty of ancillaries on which costs will rise (ever look at a hospital bill and notice how much dressings, saline, toilet paper, etc. costs?).

And it will happen. Why it is not supposed to happen is that the federal government is supposed to reimburse more than what hospitals pay out (note however that Louisiana citizens also pay federal taxes to support this). But that is in the aggregate – many hospitals, including all of the specialty ones, will receive less in reimbursements than they pay out in the tax. They will have to find creative ways to shift the additional cost of doing business that the tax creates onto the shoulders of patients, insurers (who pass it on to consumers), etc. or else they have to scale back operations, reducing the availability of health care. Either Blanco’s plan makes health care more expensive or reduces its provision, directly contradicting the bill’s stated purpose to “Preserve and enhance the availability of inpatient and outpatient hospital care for all patients.”

Legislative Republicans have got it right when they say the state needs to learn to make priorities and spend efficiently, rather than looking for another group to roll for more money. If the House GOP stands firm on this bill, they have the numbers to force Blanco to think this way, too.