CONGRESS / CUTTING AGONY : Hospital Lobbyists Resorting to Budgetary Damage Control

Fred Griffey, a lobbyist for hospitals affiliated with Protestant churches, went out of his way to play golf at Andrews Air Force Base during the closed-door budget summit there recently so that he could bend the ears of a few budget negotiators from the White House and Congress who were otherwise sealed off from reporters and lobbyists.

“It worked, I got to talk to them,” Griffey said. “They were happy to see a familiar face.”

But since the summit, even Griffey has come to accept the fact that hospitals are in for big cuts in their Medicare funding. The latest budget plans now floating around Congress call for hospitals, doctors and other health care providers to accept more than $30 billion in cuts over five years, while elderly beneficiaries would get about $10 billion in reductions.

What is a surprise--a real giant-sized Washington surprise--is just how willing the lobbyists for the hospital industry are to accept those cutbacks. Most top hospital lobbyists acknowledge that they are simply conducting “damage control.” They don’t expect to scale back the hospital cuts but just want to keep that $30-billion figure from getting bigger.

“We can’t get it down below $30 billion now,” one lobbyist said. “ . . . Ninety percent of the lobbying will be on how the cuts are distributed.”

URBAN VS. RURAL: And there’s the rub. Both rural and inner city hospitals have their guardians in Congress, and they will be wrestling over whether AIDS and drug-ridden urban hospitals or under-funded rural hospitals will have to take the biggest hits.

“You’re pitting hospital against hospital,” one lobbyist complained. “That puts a lot of hospital (lobbying) groups in a difficult balancing act.” So a big hospital trade group like the American Hospital Assn., representing both city and rural hospitals, must try to hash out a compromise position among its own members.

The most notable among those pushing to protect inner city hospitals is Rep. Dan Rostenkowski (D-Ill.), chairman of the House Ways and Means Committee, and Rep. Pete Stark (D-Oakland), chairman of the Ways and Means health subcommittee.

On the other side, however, stands Sen. Lloyd Bentsen (D-Tex.), chairman of the Senate Finance Committee, who is pushing to more evenly distribute Medicare aid among both urban and rural hospitals.

OBJECT LESSON: But more broadly, the dispute also shows just how difficult it is becoming to run from problems. When drugs and crime spread unchecked, at least in part because of a lack of government resources, the costs often show up elsewhere--like in the bill for Medicare.

Meanwhile, cutting fees to hospitals to avoid the more painful direct reductions in aid to Medicare beneficiaries ignores the fact that health services will still deteriorate.

Medicare fees account for as much as 40% of the revenues of the nation’s hospitals today.

Any reductions in those fees can be expected to lead to a financial squeeze at the weaker facilities, especially those in impoverished urban or rural areas.

In California, for instance, 70% of the hospitals in rural areas of the state are already losing money on Medicare patients. Less money from Medicare also means higher health insurance costs and premiums for patients covered by private insurance, since hospitals will try to recoup their Medicare losses by passing them on to their more affluent patients.

OUTLOOK: Many hospital lobbyists, so far shut out of the budget wrangling, are now hoping to have an impact at the expected legislative conference where Bentsen and Rostenkowski will hash out their differences.

But while the lobbyists may be able to redistribute some cuts, there’s no way to avoid the pain altogether.

“Overall, a lot of hospitals will be in trouble because of these cuts,” acknowledged one congressional staff member. “But will they be able to maintain their services? I think so, but we won’t know that until we cut too much.”