WI hospital tax would create winners, losers

Proposals for expanding coverage to the uninsured are taking many directions, all of which generate controversy within some interest group, and this is no exception. In Wisconsin, Gov. Jim Doyle is proposing to fund Medicaid and other health programs for the poor with a tax on hospitals. What makes this tax particularly interesting is that it would create winners and losers, deflating profits for cozy suburban hospitals and helping the Medicaid-reliant hospitals improve their bottom line.

While any tax proposal is complex, in summary, it would scoop up some of the profits the state's suburban hospitals by serving largely commercially-insured patients, and funnel those back into urban hospitals serving a much larger base of poor patients. The state is estimating that under the proposal, payments under Medicaid and related programs would rise from 63 percent of hospital costs to about 83 percent--still low, but significantly better.

It seems that the industry's overall health caught the state leaders' attention. According to the Wisconsin Hospital Association, the state's facilities posted record profits of $1 billion in net income in 2005. The WHA, not surprisingly, is opposing the proposal, calling it a "sick tax."

To learn more about the Wisconsin hospital tax plan:
- read this piece in the Milwaukee Journal Sentinel