Gov. Arnold Schwarzenegger won an important ally Thursday in his effort to overhaul the state's healthcare system, as California's private hospital industry agreed to a $1.7 billion tax on itself.

The tax, which would require voter approval, would help cover the cost of providing health insurance for all Californians, which the governor said was his goal for the year.

The tax money, along with federal funds and a $600-million tax on public hospitals, would create a $4-billion pot of money that would then be returned to hospitals based on how many poor people they treat.

Most hospitals would end up with more money than they paid in the tax, although some would end up with less.

"It's a very significant deal," said Peter Harbage, a senior program associate with the New America Foundation, a think tank with offices in Washington, D.C., and Sacramento. Schwarzenegger based his proposal on some of the ideas endorsed by the foundation...

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