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Albert Paschall

Somedays:

PA. Healthcare: the big ifs

by Albert Paschall,
Senior Commentator, Lincoln Institute

Only in Pennsylvania can you find the prescription for all that ails the state's healthcare system to be: "eat a cheese steak and call me in the morning."  That's pretty much what Governor Rendell told business owners last week when he outlined his new state health care legislative package.

Rendell is following the lead of other Governors around the country.  Two prominent Republicans have led the charge including Massachusetts' potential presidential candidate Mitt Romney and California's Arnold Schwarzenegger.

The governors are reacting to the reality that 12 years after the Clinton administration failed to socialize American medicine that Washington isn't going to do anything about the inequities in the system.

The question is whether or not the Governor's prescription for Pennsylvania is the right one with the right people paying for it.

Pennsylvania has some of the highest business taxes in the nation and is consistently ranked in the bottom tier of states in terms of favorable business climates.  The Governor's plan to tax businesses to pay for uninsured health care or attempt to force businesses in some way to pay part of healthcare insurance premiums doesn't sound like it will do much for the health of the state's economy.

The question may actually be: is there too much insurance?  In the last two decades there's been a dramatic increase across the country in the number of people who subscribe to Personal Provider Organizations for insurance.  PPO's will generally require slightly higher co-payments than their HMO counterparts but give the consumer more choices of providers and often more depth of services. 

In Pennsylvania physicians face some of the stiffest malpractice premiums in the country.  Most malpractice insurance policies are incident based.  The physician in this state who knows that the patient has little financial risk is a fool not to conjure up every diagnostic trick in the book just to cover their backs.  In turn this has spawned a high tech competition among hospitals to see who can have the best, and most expensive, diagnostic toys first.  Ultimately the health insurance companies are paying for this and passing the costs on to the customer.  The customers are business owners.  On average in the United States in 2005 employers paid 74% of all health care premiums. 

Talking about the Governor's plan Floyd Warner, president of the Pennsylvania Chamber of Business and Industry put it best: "Any health care discussion must address the factors that are driving costs, including mandated benefits and the grossly unfair joint and several liability system."

The Governor's heart is in the right place; his head isn't following.  Someday if Pennsylvania arranges for doctors to pay reasonable liability insurance premiums, if doctors begin to police their own to root out the incompetent, if consumers pay a fair share of health care costs and if all governments trim the bureaucracies that are overwhelming all facets of the system costs might come down.

In a state that's losing too many jobs and too many doctors, it's not the time to bleed the system.  The Governor's prescription for health care management in Pennsylvania is akin to telling the patient with high cholesterol to eat cheese steaks every day and then have the bypass operation.  It might work but the risks and the pain may be too much for everyone to bear.

Albert Paschall
Senior Fellow
The Lincoln Institute of Public Opinion Research, Inc.


Taking the Pulse of Pennsylvania