The White House early this month withdrew its opposition to a new, $75 million Camden, N.J., veterans' hospital - one the Veterans' Administration has called unneeded - in apparent return for a New Jersey congressman's vote for hospital cost control legislation.
The deal was made by White House chief domestic affairs adviser Stuart Eizenstat in a phone conversation with Rep. James J. Florio (D-N.J.) on the night of Tuesday, June 6, two Florio aides said last week.
Eizenstat said, "I have no comment. I can't tell you whether it's true or not."
Asked about reports of the White House switch in exchange for Florio's vote, Sen. William Proxmire (D-Wis.), chairman of the Senate Appropriations subcommittee with jurisdiction over VA hospital funding, said, "We've checked it out and apparently that's the case."
Congressional and other sources said the promise to Florio was one of "several" made to House Commerce Committee members in the administration's current effort to get Congress to put a lid on soaring hospital costs.
President Carter, Vice President Mondale, chief inflation fighter Robert S. Strauss and other administration officials have made call after call to committee members to say control of hospital costs is a vital part of the war on inflation.
"This hospital cost thing has become a symbol," one administration health official said last week. "If we can't control hospital costs, we can't control anything. We've had to fight fire with fire, because the hospitals and the AMA [American Medical Association] have been fighting us so hard."
The charge that the White House was making patronage promises to win Commerce Committee approval of a hospital cost control bill was first made in an open committee session last Tuesday by Rep. Jim Santini (D.-Nev.).
"I am advised that new hospitals will be erected in districts where they were opposed two or three weeks ago," Santino maintained.
White House congressional lobbyist Les Francis told United Press International, "I doubt anything like that has been going on."
But in the past few weeks administration officials, in concert with congressional leaders, have been exerting every possible effort to win support in a series of Commerce Committee votes that started June 6.
And Florio, as he had for months, was trying to win support in appropriations committees for a Camden VA hospital.
President Ford in 1976 promised that such a hospital would be funded in fiscal 1979, and approved $7.3 million to start designing it. But President Carter in his fiscal 1979 budget request struck the Camden hospital from the list.
He instead proposed a $12.1 million VA outpatient clinic at Camden, and a 120-bed chronic disease addition to the big VA hospital in Philadelphia, seven miles from the proposed Camden hospital site.
Dr. John Chase, VA medical director, said last week that with three VA hospitals already in or near Philadelphia, "it was our judgement we could meet the needs of the service-connected veteran, our first responsibility," without a Camden hospital.
He said he first learned of the White House switch on Wednesday, June 7. That was the same day Florio issued a press release to announce that "the White House has withdrawn its opposition to building" a 480-bed Camden hospital - one with 360 acute-care beds and the 120 chronic-care beds that the administration had previously decided to build in Philadelphia.
The Florio release called the White House action "the result of negotiations that have taken place between Florio, Sen. Harrison Williams (D.-N.J.), Sen. Clifford Case (R.-N.J.) and White House officials over the last several weeks."
"Florio was very effective," a Washington health lobbyist said last week. "I think he would have gotten the hospital anyway. Of course, the White House people say they snookered Florio because he was going to get it anyway."
In the past two weeks, both House and Senate appropriations subcommittees voted overwhelmingly to fund the Camden hospital. The Senate subcommittee vote came Wednesday, with only Chairman Proxmire voting "no."
"We may need [VA hospitals] in some places but certainly not in Camden," Proxmire said last week."The Philadelphia hospital has vacant beds, and the GAO [General Accounting Office] recommended strongly against" a Camden hospital.
Congressional sources and Florio's aides gave this sequence:
Florio has supported the administration's cost control plan as approved by the House health subcommittee, of which he was a member, some months ago. That plan would ordered all hospitals to hold annual cost increases to approximately 9 percent.
The full Commerce Committee's first vote this month was one to amend the plan to give hospitals two years to try to control their costs voluntarily, with federal controls taking effect only if they failed to reduce cost inflation by 2 percent a year in each year.
Santini was scheduled to propose an amendment to kill even this plan and substitute a presidential commission to "watch the situation," in Santini's words, and "recommend the best course of action" if the inflation continued.
A Commerce Committee staff member said, "We counted Florio on our side" for the modified administration plan "all along." But another source said, "He led the White House to believe he would vote for the Santini amendment."
Sarah Dowling, Florio's press secretary, said Friday, after speaking to Florio, thats "for the last two or three weeks the administration had been talking to him" about supporting the hospital cost bill, and "he said, "I have not been 100 percent supportive of it because the administration has backed down on some of the provisions and emasculated it to such a point that there's very little left.'"
Soon, Dowling said, Florio "received a personal call from Vice President Mondale saying they would be appreciative of his support," and Florio "indicated to Mondale that he'd be happy to help out but he needed some help as well, and nothing that the administration has been opposed to (the Camden) VA hospital . . . And he had Carter and Mondale in a barrel."
"So on Tuesday night, June 6," she continued, "at about 10 o'clock Florio returned a call from the White House. He spoke to Mr. Eizenstat. And Eizenstat said that they were willing to publicly state they were not opposed to the hospital, and asked Florio if he'd be in a position to support them" against Santini. "He said he would and that's how it happened."
Last Tuesday the Commerce Committee voted 22 to 20 against the Santini amendment. Next Tuesday, after still more amendments, most observers think the committee will probably pass a bill.
It then faces other hurdles, including an even cooler House Ways and Means Committee, a Senate Finance Committee which Tuesday will start considering a different plan - one using financial incentives and penalties to try to get hospitals to control costs - and the AFL-CIO, which wants strong assurances that hospital workers' wages will be protected.
"This has been going on for months," said one source. "The action is just beginning."