Tobacco Companies Say Cigarette Tax Would Allow Hospitals To ‘Conspire To Fix Prices’
Tobacco companies are spending millions of dollars to convince California voters that support of Proposition 86 "from cancer societies and lung associations masks a ploy by bottom line-driven hospitals and HMOs to boost profits," the Los Angeles Times reports. The ballot measure would provide funds for health care programs by increasing the state tobacco tax by $2.60 per pack.
The No on Proposition 86 campaign is outspending supporters of the measure three-to-one and has raised more than $48.2 million to date.
A large portion of the money is "being used to highlight sections of the initiative that would benefit hospitals by paying hundreds of millions of dollars in costs that they are now absorbing," the Times reports. According to Carla Hass, a spokesperson for the No campaign, provisions of the measure that would ease antitrust restrictions "would allow hospitals to conspire to fix prices, reduce services or eliminate them altogether."
However, hospitals contributing to the Yes campaign say that Proposition 86 would reduce overall health care costs and that the antitrust provisions would "reduce the huge fees hospitals have to pay to keep numerous specialists on call every night," according to the Times.
A Field Poll released this week showing support for the measure has declined to 53% of likely voters "suggests the opposition's ad blitz is effective," the Times reports. By the end of September, the No campaign had run 10,370 advertisements in the state's five major media markets, compared with 1,767 ads by supporters of the measure, according to HealthVote.org (Halper, Los Angeles Times, 10/5).
In related news, five of eight antitrust experts consulted by the Orange County Register said Proposition 86 is written broadly enough to allow hospitals to engage in anticompetitive acts, such as price fixing. The other three experts said the initiative is not a threat, the Orange County Register reports.
According to the Register, a "growing" number of doctors oppose the measure "because they view it as a power grab by hospitals." However, attorney Francis Scarpulla said doctors oppose the initiative because it means they could receive less money for working on call, adding that the measure would not affect consumers (Joseph, Orange County Register, 10/5).
KPBS' "Full Focus" on Tuesday included a discussion of Proposition 86. Guests on the program included Matt Klink -- vice president of Cerell Associations, which is managing the campaign against the measure -- and Victoria Penland, CEO of the Council of Community Clinics and supporter of the measure (Penner, "Full Focus," KPBS, 10/3). Video of the segment is available online.This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.