The Martha Stewart ploy to ease malpractice crisis

January 05, 2005|by BOB MAGINNIS

Maryland Gov. Robert Ehrlich can still win the struggle over whose medical malpractice bill will prevail if he takes a lesson from Martha Stewart.

No, the governor doesn't need to go to prison, but he does need to do as Stewart did and take control of the situation.

As you may recall, Stewart, facing the possibility of a lengthy appeal that would be a drag on her company and her personal popularity, opted to get it over with and do her time. Six months after she's out, she'll have a new TV talk show and probably a new crusade on behalf of mothers in prison.

How can Ehrlich learn from what Stewart did? Consider what happened recently.

Ehrlich called a special session of the Maryland General Assembly to deal with the soaring cost of medical malpractice insurance.

But instead of the deal he wanted - a lot of tort reform and an agreement to subsidize doctors' insurance rates in the short term with general revenue - Ehrlich got what he called a tax bill, light on reform and funded with a 2 percent tax on HMO premiums.


The governor has said he will veto the bill, which sets up two possibilities. The first is that the legislature will vote to override, settling the crisis for now. Or, the override won't fly and the crisis will continue.

It's a dangerous game that could become what one local official once characterized as a "rooster contest." In such a dust-up, the details become less important than who wins.

A local Republican suggested to me that Senate President Thomas V. Mike Miller might not be too energetic in his attempt to override the veto. In that scenario, the bill would fail, the crisis would continue and the Democrats could point the finger at Ehrlich.

That's a plausible strategy, if you don't think too much about Ehrlich calling the special session without cutting a for-sure deal in advance.

At a time when people were focused on family and religious observations, the governor dragged everyone to Annapolis, then couldn't pull the rabbit out of the hat. I'm betting that Miller will push hard for the override, if only to dissuade Ehrlich from trying that trick again.

The override effort would also bring Miller closer to House Speaker Michael Busch, with whom he's been at odds on slots. Politics may make strange bedfellows, but so does a common adversary.

So how does Ehrlich cope? By taking control of the situation now, before the session starts.

How does he do that? By persuading the HMOs to make a one-year voluntary contribution to the cause of reducing doctors' insurance premiums.

Why would the HMOs voluntarily pay a tax that hasn't been enacted? Because, as some Republicans have noted, once the tax is enacted, it's unlikely to be repealed. A gift, voluntarily given, is not only good public relations, but also a possible hedge against legislation making it permanent.

It isn't as far-fetched as you would think. In 2001, Baltimore Mayor Martin O'Malley proposed putting an energy tax on some of the city's larger nonprofit organizations.

John Hopkins University and other large nonprofit groups headed that off by offering $20 million over four years as a payment in lieu of taxes.

According to The (Baltimore) Sun, the agreement expires in June and O'Malley is once again talking about imposing a tax. But the nonprofits held that off for four years and could avoid it again with another gift pledge.

If Ehrlich went to the HMOs with this plan, his argument should be that unless they offer a gift, they're going to get a tax shoved down their throats - one that their companies will be choking on forever.

A gift, however, with a one-year term on it, would not only make the HMOs look good, but it would also give the legislature a deadline to act. Instead of being the villain of the piece for stalling action, Ehrlich could appear statesmanlike for persuading big business to help out.

Can Ehrlich pull it off? He's not a master negotiator by any stretch, but it shouldn't take one to persuade the HMOs that if they don't offer a few bucks now, someone may soon come and take away more dollars than they'd like to give.

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