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Nickel-a-beer proposal aims to shore up California ED system

A state bill would earmark money from a special tax for a trust fund devoted solely to paying for emergency services for alcohol-related injuries.

By Tanya Albert, amednews staff. April 14, 2003.

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Some California lawmakers say it's the beer, wine and distilled spirit industry's turn to pick up the tab for alcohol-related emergency services.

A California Senate committee in March passed a bill 8-2 that would collect a 5-cent fee per drink from wholesale distributors of distilled spirits, beer and table wine sold in California. The money -- an estimated $700 million annually -- would be used dollar-for-dollar to reimburse on-call physicians, emergency departments, trauma centers and first responders for alcohol-related incidents.

Physicians and hospitals say the money is desperately needed to keep cash-strapped emergency departments from closing. California EDs lost $390 million in uncompensated care in the last fiscal year, according to the California Medical Assn. and the Office of Statewide Health Planning and Development. Physicians lost an additional $150 million in uncompensated care to patients in emergency departments.

Los Angeles emergency physician Brian Johnston, MD, said he knows the proposed tax wouldn't solve all of the problems in the health care system -- issues such as nursing shortages and a dearth of hospital beds would still need to be addressed. But, he said, it's a place to start.

"In the short run, we have to do what we can to keep the doors open and the lights on," said Dr. Johnston, a CMA trustee. "It's the most urgent place to start right now."

California emergency systems, like others around the nation, have had to make tough choices in the past decade. The hospital diversion rate in Los Angeles County rose to 25% in 2002, up from 6.2% in 1995. And since 1990, 60 California emergency departments -- 15% of EDs in the state -- have shuttered their doors, according to the CMA. Ten have closed since Jan. 1, 1999, and health officials fear more will disappear if financial needs aren't met.

"It's easy to take these services for granted," said emergency physician Loren Johnson, MD, immediate past president of the California chapter of the American College of Emergency Physicians. "As stewards of the emergency care system, we will certainly keep working to preserve the system."

But as the legislation moves through the Senate, there is debate over whether taxing wine, beer and distilled spirits is a fair way to pay for emergency department services.

Battle brewing

California ACEP and the CMA support the "Nickel-a-Drink" legislation that state Sen. Gloria Romero brought forward. The fee will pay for the many alcohol-related injuries EDs see on a daily basis, the groups said.

The CMA and Romero's office say that about one-third of the injuries treated in California emergency departments are the result of an alcohol-related automobile crash. And that's just one example of ED visits that are alcohol-related, Dr. Johnson said.

"We see everything from domestic violence to street brawls to accidents to closet drinking in the elderly," he said. "There's a causal connection between excessive alcohol use and use of emergency services."

Romero also believes a nickel a drink is a reasonable price to pay to keep EDs and trauma centers operating. "The costs to hospitals, physicians, paramedics and ambulance providers for treating alcohol-related injuries are staggering," she said. "Emergency rooms and trauma centers can no longer afford to continue to provide these services without some kind of reimbursement from the alcohol industry."

Dr. Johnston said the fee is justified even without a correlation between alcohol and ED visits.

"It's not a sin tax," he said. "It's a good source of revenue."

But groups such as the Family Winemakers of California and the Washington, D.C.-based Beer Institute don't believe collecting a fee from their products is the appropriate way to pay for the state's emergency services. Although the fee will be charged to the companies, ultimately, the cost gets passed on to consumers, said Beer Institute President Jeff Becker.

"Most people who drink, drink responsibly and cause no harm to themselves or others," he said.

Also, Becker said, the tax will be a greater burden on people who have lower annual incomes. He said California lawmakers need to consider that 50% of the beer consumed is bought by people who make less than $45,000 annually.

"If you have to look at tax issues, you shouldn't separate out those who choose to have a beer to pay that specific tax," he said. "It's unfair."

When states collect taxes or fees on alcohol, the money usually goes into a general fund. The California Senate bill is believed to be the first that would levy a fee on alcohol specifically to pay for alcohol-related emergency services. The legislation calls for putting the money collected into a trust fund in the California Dept. of Health Services to then be paid out for alcohol-related emergency services.

The measure still needs to pass the full Senate and would have to move through the Assembly. But supporters say there is momentum for the idea. Nearly 80% of 1,052 registered voters surveyed for the California HealthCare Foundation said they would support a 5-cent increase. Also, last year Los Angeles County residents passed an increase in their property taxes to help pay for emergency services.

"There is a recognition of the severity of the problem," Dr. Johnston said.

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 ADDITIONAL INFORMATION: 

                   ------ Losses -----
County             Total      Per visit
--------------  ------------  ---------
Los Angeles     $120 million     $78
San Bernardino   $31 million     $54
San Diego        $26 million     $49
Alameda          $24 million    $101
Orange           $20 million     $54
Santa Clara      $17 million    $182
Contra Costa     $17 million    $112
Stanislaus       $10 million     $60
Riverside        $10 million     $28