Doctors, consumer groups oppose tobacco tax initiative

The California Medical Assn. and others say that under the hospital-sponsored proposal, tax revenue would not be distributed fairly.

By Mike Norbut, amednews staff. Dec. 12, 2005.

California physicians and consumer groups are taking an unfamiliar stand in the fight against tobacco. They have announced their opposition to an initiative campaign that proposes to levy a $1.50 tax per pack of cigarettes.

Their opposition is not related to the tax, but how the initiative proposes to spend the resulting revenue. While nearly two-thirds of the money would be earmarked to protect emergency care in California, opponents worry the funds would not be divided justly among the state's hospitals.

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"We need to look at how to get the most benefit for California's citizens out of this unique opportunity," said Jack Lewin, MD, executive vice president and CEO of the California Medical Assn. "There isn't another way we're going to raise that money, so we need to spend it strategically."

Emergency care has become a source of contentious debate in California over the last few years, as more hospitals are forced to close their doors due to escalating losses from uncompensated care. Nine hospitals across the state closed in 2004, according to the initiative sponsors, which are led by the California Hospital Assn.

Opponents say that rather than going to the hospitals most in need of subsidies, the funds generated by the tax would be spread among a larger group of facilities, many of which already would have been compensated for care. In essence, some hospitals would be reimbursed twice for emergency services, they said.

"The money raised by the $1.50 tax invariably would go to the hospitals that need it the least," said Anthony Wright, executive director of the consumer advocacy group Health Access California. "A great majority would go to double-pay hospitals."

9 California hospitals closed in 2004.

Opponents have misinterpreted the intent of the initiative and the way the funds would be divided, said Kris Deutschman, spokeswoman for Communities United to Protect Emergency Room Care, an umbrella group for the referendum's backers. Rather than compensate hospitals per charity emergency visit, the fund would subsidize care based on a formula that evaluates both the volume of emergency care and the amount of uncompensated care, she said.

"There are two elements of one formula," she said. "So those with the highest volume and most uncompensated care would receive the most funding."

The tax would generate an estimated $1.4 billion each year, and nearly $900 million of it would help subsidize emergency care across the state. The initiative also would provide for nursing education programs and more smoking prevention efforts, among other plans.

To receive funding, hospitals would have to qualify based on providing a certain amount of charity care and meeting other criteria, Deutschman said.

Disbursements would be made quarterly and would be based on a report of emergency care from the previous year, she said.

Sponsors are in the process of collecting the necessary 750,000 valid signatures to enable the initiative to be on a ballot in either June or November of 2006.

The initiative probably will not be the only one related to tobacco on a ballot in California next year. A measure sponsored by several health advocacy groups, including the American Cancer Society and American Heart Assn., has been filed with the state. It would call for tobacco tax revenue to fund expanding health coverage for children and other health programs. CMA and other opponents of the hospital-supported tobacco referendum have not taken a position on the alternative measure.