Baseball deal strikes out with physicians in District of Columbia

The prospect of a new major league baseball stadium in Washington, D.C., doesn't have local doctors humming "Take Me Out to the Ballgame." Instead, they feel like they're being taken for a ride.

The District of Columbia City Council on Nov. 30 gave an initial approval to a baseball stadium deal that includes an annual fee for businesses with annual gross receipts of $4 million or more.

The estimated 2,000 businesses that are included in that category likely would pay between $2,500 to $7,500 a year, according to Chris Bender, spokesman for D.C. Mayor Anthony A. Williams. Although statistics on the number of physician practices that would be affected aren't available, the medical community is worried that several doctor's offices could be hit by the new assessment.

The details of the fee were still being worked out at press time. A final vote on the stadium deal is expected Dec. 14 or Dec. 21.

The fee would hurt D.C. doctors, who are already saddled with high liability insurance premiums and low reimbursement rates from public and private payers, according to the Medical Society of the District of Columbia. With nowhere to pass along the added cost, some physicians would be more likely to look at moving to Maryland or Virginia, where the cost of doing business is lower, said K. Edward Shanbacker, the group's executive director.

"It's just another hit on the bottom line of physicians," he said. "Physicians will leave the district, which they are already doing because of liability costs."

MSDC is actively opposing the tax and trying to convince city leaders to exclude physician practices from the businesses that would be required to pay the annual fee. The medical society also has rallied physicians to write letters to and call their council members to explain how the tax would harm doctors.

"Gross receipts have little connection to the bottom line in most medical practices," Shanbacker said.

The scenario is particularly true when it comes to oncology. Oncologists buy costly chemotherapy medication that they need to administer to cancer patients, but they do not mark up the cost when they charge patients or private insurance companies for the drugs. The reimbursement they receive for the chemotherapy drugs, however, is considered part of a practice's gross receipts.

"In effect, we'll be taxed for pass-through charges," said oncologist/hematologist Kenneth Goldstein, MD, who is part of a three-physician practice. "It's the worst tax possible for small businesses."

Dr. Goldstein said the physicians have had a D.C. office for 25 years but also have an office in Maryland. If the tax is passed, he said, it could mean that they wouldn't be able to afford to keep their district office open.

"It's a tax on us, borne by us because we can't pass the cost on to the insurance company and we can't pass the cost on to the patient," said Dr. Goldstein, who has written letters to each D.C. council member.

Mayoral spokesman Bender said the city has worked with every sector of the community in hammering out the details of the plan. To make it more equitable, the city raised the threshold to $4 million in gross receipts, up from the initial proposal of $2 million and then $3 million, he said.

"When people have come forward with suggestions, we've listened," Bender said.

Physicians and others need to look at the proposed fee in the context of what a new stadium is going to do for the community, he said.

The facility will house the former Montreal Expos, which are moving to D.C. this spring. It brings major league baseball back to the nation's capital for the first time since 1971, when the Washington Senators left for Texas. The structure will be built along the Anacostia River in an economically depressed area in the southeast part of the District. The city estimates that the stadium will create 3,500 new jobs, bring in a minimum of $15 million in direct tax revenue and create 4,500 new housing units.

"All of those people will need medical care," Bender said. "In the long run, this is good for physicians."

Shanbacker and Dr. Goldstein disagree. "[The stadium] is going to affect people who need oncology services?" Dr. Goldstein said. "That's ridiculous."

Shanbacker said the fee is bizarre public policy. "It gives you a reminder of where public policy puts health care in comparison to professional sports," he said.