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Tobacco Firms Light Up Airwaves

Companies are running ads saying Prop. 86 is a money grab by hospitals and HMOs. Proponents say they are just fouling the air with deception.

October 05, 2006|Evan Halper | Times Staff Writer

SACRAMENTO — In their effort to beat back a November ballot measure that would more than quadruple taxes on cigarettes, tobacco companies are pouring millions into a campaign that accuses the hospitals behind the initiative of deception and greed.

The tobacco interests' message, conveyed in a barrage of television ads, e-mails and fliers denouncing Proposition 86, is clear: The support the initiative has from cancer societies and lung associations masks a ploy by bottom line-driven hospitals and HMOs to boost profits.

"We're pulling back the curtain on Proposition 86," said Carla Hass, spokeswoman for the "No" side. "We are saying, 'Look at who is behind this initiative.' "

The healthcare groups that sponsored the measure, which are hoping to capitalize on public support for higher taxes on cigarettes and other tobacco products, call the attacks desperate and hypocritical.

"They lied," an announcer says in a "Yes" commercial paid for by healthcare organizations and featuring footage of tobacco executives testifying before Congress about nicotine addiction. "Now, they're at it again."

Proposition 86 would make California's taxes on tobacco products the highest in the country, hiking the current 87 cents on a pack of cigarettes to $3.47, which would raise roughly $2.1 billion a year. That money would go to an array of medical services and programs, including hospital emergency rooms and a major expansion of subsidized health insurance for low-income children.

About 18% of the money raised would go to anti-smoking efforts and cancer research and treatment.

Most major healthcare groups are supporting the proposal, including the American Heart Assn., the American Cancer Society and the American Lung Assn.

"This is a huge coalition of healthcare groups," said Cyndi Lewis, Western states director for the Tobacco-Free Kids Action Fund based in Washington, D.C. "The tobacco companies are trying to put doubt in people's minds and mislead them. But ... people realize we are more of an authority on health issues than Philip Morris and R.J. Reynolds."

The tobacco interests, with substantially more money than the measure's supporters, are outspending the "Yes" side 3 to 1. They have raised more than $48.2 million for their campaign to defeat the measure, and they are expected to bring in many millions more. Hospitals and other healthcare groups have raised $14.2 million.

Much of the tobacco money is being used to highlight sections of the initiative that would benefit hospitals by paying hundreds of millions of dollars in costs that they are now absorbing. In addition to emergency care for the uninsured, the new tax money would also be used for equipment purchases. One provision would ease antitrust restrictions that prohibit hospitals and clinics from pooling their resources and coordinating prices on treatments.

"The devil is in the details," Hass said. "These antitrust laws were put in place to protect consumers. This initiative would allow hospitals to conspire to fix prices, reduce services or eliminate them altogether."

Hass says the "No" side is not demonizing hospitals but "simply telling voters the truth about where the money would go."

"It's very easy to say, 'Let's raise taxes on smokers, keep emergency rooms open and expand health insurance for children,' " she said. "It is hard to say no to that. But there is so much more this initiative does that voters don't know about."

The hospitals contributing heavily to the "Yes" campaign say the initiative would lower overall healthcare costs. The antitrust provisions, they argue, would reduce the huge fees hospitals have to pay to keep numerous specialists on call every night.

"We find it laughable that tobacco companies are attempting to use consumer protection arguments to fight this measure," said Anthony Wright, executive director of Health Access, a nonprofit group that advocates for low-income Californians.

Health Access is no ally of hospitals. The group regularly accuses them of being driven by profits and not doing enough to help the uninsured. But Health Access, the California Public Interest Research Group and other consumer organizations that regularly tangle with hospitals are supporting Proposition 86.

"We wouldn't be on their side if this wasn't worthy of our support," Wright said.

Opinion polls show wide public support for hiking tobacco taxes, and several cities and states have increased them in recent years.

At 87 cents a pack, existing taxes on cigarettes in California are about average.

The stakes are high for the tobacco industry. Experts on both sides predict that a big tobacco tax increase would lower sales and lead to a spike in smuggling of counterfeit smokes from China, Mexico and elsewhere.

A successful quadrupling of the tax on cigarettes in California, the most populous state in the country, could embolden other states strapped for funds to do the same.

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