Many seek advantage in plan for healthcare

The debate over expanding health coverage in Massachusetts is not just about the 460,000 residents without insurance. The potential for the biggest changes in the healthcare system in a decade has also set off a lobbying blitz by insurance companies, hospitals, and business groups.

When the State House battle is joined in full this week over plans to expand coverage, almost every player in the healthcare sector will ask lawmakers for favorable treatment, on a host of issues.

The jockeying may determine how hundreds of millions of dollars are distributed. The state is considering ways to increase state Medicaid insurance reimbursements to hospitals and doctors, who say they are underfunded by the current system.

A final bill also may dramatically reshape the state's $670 million free-care pool, which might be used to pay for expanded insurance. The pool is the focus of intense legislative wrangling.

Teaching hospitals want more money for reimbursements under Medicaid, the state-funded health insurance plan for low-income residents.

Safety-net hospitals, such as Boston Medical Center, are heavily dependent on public money. They want to protect their share of funding now spent in the free-care pool, which reimburses hospitals for patients with no insurance. Suburban hospitals want an increase in their share of the money.

In the meantime, interest groups such as optometrists, mental-health advocates and anti-smoking activists are campaigning to make sure their work is covered under any changes.

In the latest development, a plan to be unveiled today by Salvatore F. DiMasi, the House speaker, would levy assessments against Massachusetts businesses with more than 10 employees, to help pay for the expansion.

It is likely to be a flashpoint, as groups such as the Greater Boston Chamber of Commerce and Associated Industries of Massachusetts mobilize against it.

Ultimately, State House leaders will determine winners and losers as they try to negotiate details.

''It's all going to be about who's ox is getting gored," said Terry Dougherty, vice president for payer and HMO relations at Caritas Christi Health Care System, a former state Medicaid budget chief.

Health industry executives say the climate, up to now, has been favorable for passage of a universal health coverage plan.

Governor Mitt Romney hopes to get ahead of Democrats on the issue, which could be a major one in his possible 2008 presidential run. DiMasi and Senate President Robert E. Travaglini say they want to seize the opportunity to repair inequities in the health system and to widen the state's safety net.

Lawmakers are under pressure to act before a January deadline set by the Bush administration, which controls the purse strings on $585 million in federal Medicaid waiver funds that are critical to the state's initiatives. Romney has said the state may lose funding if it does not pass a plan.

''The stars are lined up really quite well. This is a unique time," said Patricia McGovern, senior vice president for corporate affairs at Beth Israel Deaconess Hospital and a former chairwoman of the state Senate Ways and Means Committee. McGovern helped shape healthcare changes in the 1980s and 1990s.

While there is a consensus among many that insurance coverage should be expanded, some issues could prove contentious.

In addition to the House proposal for assessments on employers to pay for the plan, the Romney and Senate plans include a proposal to give cities and towns the flexibility to impose bigger insurance copayments on municipal employee unions. The unions have said they would fight weakened protections.

Private insurance providers, meanwhile, are being asked to introduce low-premium plans with high out-of-pocket expenses and restricted hospital networks.

To make it easier for consumers to decide among plans and providers, insurance companies want to add greater transparency to the costs and the quality of healthcare.

''The only way to move the needle on accountability and affordability is to force a public discussion about relative price and performance," said Charles D. Baker, chief executive of Harvard Pilgrim Health Care.

Lawmakers said lobbying by industry groups is increasing in intensity on major health issues.

''They sense the train is moving, and if they have an issue that they think has some relevance, they are trying to get it tapped in," said state Senator Richard T. Moore, who represents parts of Worcester and Norfolk counties, and who is chairman of the Committee on Health Financing.

In a prominent example, Partners HealthCare, the largest healthcare provider in the state, has teamed up with Blue Cross and Blue Shield of Massachusetts to press for more money for treating patients who are covered by the state Medicaid health insurance program.

Their argument: State Medicaid pays on average only about 80 percent of the cost of care, creating a $500 million shortfall that must be made up by consumers through higher premiums.

When those costs are shifted onto the rest of the private health insurance market, it adds 4 percent to health insurance premiums, according to their analysis, produced by PriceWaterhouseCoopers.

The funding shortfall, combined with some market factors, also means that many hospitals are living on the edge. The Massachusetts Hospital Association says 42 percent of the state's hospitals lost money last year.

To make their case, Partners and Blue Cross have hired a leading Beacon Hill lobbyist, John Sasso, an aide to the former governor and presidential candidate, Michael S. Dukakis.

State records say they paid Sasso $50,400 in the first six months of the year.

The Partners group also has sought to leverage its member hospitals' reputation for excellence to build support.

The Partners HealthCare chairman, Jack Connors, said he ushered Travaglini around Massachusetts General Hospital to emphasize the importance of quality healthcare.

The tour included a stop in an operating room to observe open-heart surgery.

Partners HealthCare has also brought staff from Massachusetts General to see DiMasi in the speaker's office to make the case for more funding, Connors said.

''We have a lot of clubs in the bag -- surgeons, presidents of hospitals, different docs. There's no shortage of all stars in the healthcare arena that we can call upon," he said.

So far, joint Partners/Blue Cross effort, combined with lobbying by other hospitals, has resulted in $64 million in Medicaid increases included in the 2006 budget.

Moving forward, the Senate healthcare plan calls for $100 million a year in additional Medicaid money. The House plan calls for $80 million.

The issue of Medicaid money is complicated by the way the state divides its other major subsidy program, the free-care pool.

Boston Medical Center, the Cambridge Health Alliance, and other hospitals that treat large numbers of uninsured and low-income patients rely heavily on the free-care pool.

But $160 million of it comes from a special tax on all hospitals.

Smaller community hospitals that pay into the pot say distribution methods favor city hospitals. They are calling for a greater share.

''The whole way the pool is set up is really not fair," said James Nania, chief financial officer for Hallmark Health, which runs hospitals in Wakefield and Medford.

At Boston Medical Center, executives support expansion of insurance coverage, but they are wary of how the state will pay for it.

''Our concern is that there will be adequate new money for this, and it doesn't come from current Medicaid or other current healthcare funding," said Thomas Traylor, Boston Medical Center's vice president for federal and state programs. ''We fully support insuring all the uninsured, but the overall math needs to work," Traylor said.

Christopher Rowland can be reached at crowland@globe.com.