RICHMOND -- Alexandria Hospital President J. Edward Sweet Jr., a foot soldier in the fiercest lobbying war of this session of the Virginia General Assembly, arrived here last week sporting a secret weapon on his suit jacket.
"HosPAC 88" said Sweet's red lapel pin, a not-so-subtle reminder of the power wielded by the political action committee of the Virginia Hospital Association, which in less than a month has shaken Gov. Gerald L. Baliles with an extraordinary attack on his administration's proposal to charge fees on hospital beds to pay for indigent health care.
The story of how the hospital association mobilized Sweet and his counterparts across the state is a case study of a well-financed trade association using its members, money, mail and political muscle to affect legislation, in this case a key component of Baliles' health care package. Industry spokesmen in Virginia say the proposed fees constitute the most serious threat to hospital profits in a decade, and they have responded accordingly.
"It's war for these guys," said state Human Resources Secretary Eva S. Teig, who touched off the industry's storm of protest when she privately disclosed details of the fee proposal to association lobbyists two weeks before the legislative session started.
Teig proposed the fees -- $5 per day on every hospital bed and $1 on nursing home beds -- as part of a formula designed to inject $168 million of state and federal money into health care for the poor over the next two years. Without the new money, Virginia would be in a far worse position to help low-income persons dependent on an already weak federal-state Medicaid program, Teig told the hospitals' lobbyists on Dec. 30.
The lobbyists, Laurens Sartoris and Katharine M. Webb, began their counterattack two minutes after their meeting with Teig ended, according to interviews with spokesmen on all sides of the hospital fee fight. Webb telephoned Del. Warren G. Stambaugh (D-Arlington) to see whether he or other leaders of the House of Delegates had been briefed by state officials on the fees.
The lobbyists learned from that and other phone conversations that administration officials had laid virtually no groundwork for the fee idea, and the hospital association moved quickly to exploit what state officials now acknowledge was a mistake in tactics and timing.
By Jan. 8, after an emergency meeting of the association's board in Richmond, letters had gone out to 120 hospital executives, alerting them to Teig's proposal, and to Teig and Baliles, protesting the administration's decision.
"It is imperative that members of the General Assembly receive the thoughts of their constituent hospitals," Sartoris said in a letter to association members, a copy of which was obtained by The Washington Post. He added: "Most importantly, please advise them of the effect that the proposed taxes will have on your hospital's financial position and on your community.
"This issue is an absolute must for membership involvement," the letter concluded. "Please do your part today and immediately."
Association Chairman Carter Melton Jr., the president of Rockingham General Hospital in western Virginia, was equally critical of the fee proposal in a letter to Baliles.
"The plan is, in general, without merit," Melton said in the letter, adding that the fees "will cause hospitals to be taxed primarily to provide an infusion of cash to the Medicaid program and will force hospitals to pass this tax on to the shrinking portion" of unsubsidized patients and insurance carriers.
The letters were only the first salvo in the hospitals' counteroffensive. The lobbyists' attempts to line up support -- Sartoris, for example, met with Stambaugh in the delegate's Arlington office before the session opened -- were matched by warnings of fiscal ruin from hospital administrators to their local lawmakers.
By the time the General Assembly convened Jan. 13, dozens of the state's 140 legislators had been contacted, and many were supportive of the hospitals' cause.
In addition to mounting a full court press with a statewide lobbying effort, the hospitals also had the advantage of just coming off the fall election season, a time when the association's political action committee rewarded its many friends in the General Assembly with campaign contributions.
On a single day during the height of the election season, HosPAC dispersed $28,350 to help 49 Democratic and Republican candidates, most of them incumbents, according to records on file with the state Board of Elections.
HosPAC's largest contributions on Oct. 7 were $1,000 each to such senior legislators as House Speaker A.L. Philpott (D-Bassett), House Majority Leader Thomas W. Moss Jr. (D-Norfolk) and Senate Majority Leader Hunter B. Andrews (D-Hampton), as well as six other senators and delegates; a $1,000 contribution was made three weeks earlier to Stambaugh's re-election effort, according to state records.
An integral part of the hospitals' lobbying effort has been to collect chits from the November election, driving home the commitment that HosPAC has made and will make to the legislators' political survival, according to lawmakers and lobbyists alike. "The first reaction of a politician is that hospitals don't vote, so why not put a tax on their beds?" said Sweet, an 18-year executive at Alexandria Hospital.
"But at our hospital," Sweet continued, "we have 16 people on our board, 12 people on our parent company's board, a 700-member association and 700 staff. All these people vote. And that's what we have to remind them of . . . . What goes around, comes around."
Sweet traveled to Richmond last week on a very simple mission: To hand-deliver letters protesting the fee proposal to the Alexandria delegation, Republican state Sen. Wiley F. Mitchell Jr. and Democratic Dels. Bernard S. Cohen and Marian Van Landingham. Meanwhile, Sweet said, Francis P. McCabe, chairman of the Alexandria Hospital board, prepared to lobby the trio on their weekly trips home.
"He very definitely will corner them when they're back in Northern Virginia," Sweet said.
Within 48 hours, Sweet had his answers. Mitchell, meeting Sweet at a cocktail reception the association hosted at the Omni Hotel here, said he regarded the proposed fees as an unfair tax. The Democratic delegates were also on board.
"I wouldn't favor taxing hospital beds," Van Landingham said. Added Cohen: "I definitely have some preliminary hesitation about it, because hospital costs are so high already."
The reaction of the Alexandrians was typical, and by week's end the fee proposal, which was not yet drafted in bill form and had no legislative sponsor, appeared to be dying on the vine. Baliles, who associates said was angered by the tenacity of the hospital lobbyists, is poised to present his formal funding proposal this coming week.
But for now, conceded one senior administration official, "The hospitals clearly have the edge on us."