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On January 17, 2007, Governor Edward G. Rendell proposed the Prescription for Pennsylvania, a plan that will expand access to affordable, quality health care for every Pennsylvanian. The Prescription for Pennsylvania is a set of integrated, achievable, practical strategies focused on driving down the cost of health care, providing access to universal coverage, improving the quality of care received and lessening the inefficiencies of the current health care system. The Prescription for Pennsylvania is modeled on proven private sector solutions for cost containment and quality improvement. The plan will benefit both employers and individuals by providing private sector access to affordable health insurance for the uninsured. The goal of the Prescription for Pennsylvania is to reform and repair Pennsylvania’s broken health care system, which will ultimately increase the competitiveness of Pennsylvania businesses and the health and well-being of its residents.

State of the State

Currently, there are 767,000 uninsured adults in Pennsylvania. The majority of the uninsured are employed full-time; however, most earn low wages or are employed by small businesses. Due to the high cost of health coverage, most individuals cannot afford insurance and most small businesses cannot afford to offer it to their employees. For those Pennsylvanians who are covered, the cost of health care is rising far faster than wages. Since 2000, the cost of family health insurance premiums has increased nearly 76%, which wages have only increased 13% and inflation has only increased 17%. If health care costs continue to rise at six times the rate of inflation or wages, the health care system in Pennsylvania will collapse.

The rising cost of health care is largely attributable to those without health care. When the uninsured need medical services, they often receive those services in expensive emergency rooms. Ultimately, those services are paid for by insured Pennsylvanians. 6.5 percent of every Pennsylvanian’s health insurance premium is dedicated to covering the cost of the uninsured.

High health care costs are also a result of unnecessary and avoidable services, such as emergency room visits. Pennsylvanians are among the highest users of emergency rooms in the nation and are 11 percent more likely to visit an emergency room than the average American. The rate of increased use of emergency rooms in Pennsylvania is growing twice as fast as the U.S. average. In 2007, half of emergency room visits are projected to be for conditions that do not require immediate treatment.

Medical errors and avoidable hospitalizations are also responsible for the rising cost of health care in Pennsylvania. In 2005, services resulting from unnecessary and avoidable health care costs, including hospital-acquired infections (HAIs), medical errors and avoidable hospitalizations for chronic diseases, totaled $7.6 billion. Hospital-acquired infections are contracted in the hospital and are unrelated to why the patient was initially admitted. Not only can these infections add an average $150,000 to the cost of a hospital stay, they also lead to nearly 2,500 deaths in Pennsylvania each year. Medical errors, such as incorrect dosage, are inflating the cost of health care, as well. On average, every hospital patient in America is subjected to at least one medication error per day, which can lead to costly corrective treatment. Finally, patients with chronic diseases often require hospital stays which could have been avoided with adequate preventive or out-patient care. 75 percent of health care costs can be traced to patients with chronic diseases and their potentially avoidable hospitalizations. These costs are a direct result of inadequate health care and are typically paid for through higher health insurance premiums by Pennsylvanians and Pennsylvania businesses.

The current well-being of Pennsylvanians is also driving health care costs higher. The less healthy an individual is, the more it will cost to effectively care for that person. Smoking and childhood obesity are becoming more prevalent among Pennsylvanians and are drastically reducing their well-being. Nearly 23 percent of adults in Pennsylvania smoke, while one in every three children in Pennsylvania is overweight or at risk of becoming overweight. The health care costs related to tobacco use and obesity total more than $9 billion each year. These costs could be avoided with smoke-free environments and proper nutrition.

The cost of uncompensated care for the uninsured, the cost of additional days of hospital care due to potentially avoidable hospitalizations, the cost of additional days of hospital care due to inadequate care, and the cost of hospital care for patients with chronic diseases, and the cost of treating Pennsylvanians with poor health are the avoidable reasons behind the high cost of health insurance in Pennsylvania.

Affordability

For the 767,000 uninsured Pennsylvanians and the hundreds of thousands of insured Pennsylvanians who are struggling to pay for health coverage, the Prescription for Pennsylvania will lighten the financial burden that health care has become. The Prescription for Pennsylvania will provide health insurance to every Pennsylvanian by instituting urgently needed reforms to control skyrocketing health care costs for both individuals and businesses. The plan aims to provide every Pennsylvanian with access to affordable health insurance by eliminating the costs generated by Pennsylvania’s inadequate and inefficient health care system.

The Prescription for Pennsylvania will launch Cover All Pennsylvanians (CAP), which will offer affordable health insurance to the uninsured and eligible small businesses. CAP will be supported by the state and will be offered through private insurance companies. All uninsured Pennsylvanians will be able to purchase affordable health insurance through CAP, and families will receive help from the state in order to pay their premiums. Small businesses can also participate in CAP, while their employees pay a small premium based upon their income.

In order to reduce the cost of health care, the state must reduce the amount of unnecessary costs that inflate premiums. The Prescription for Pennsylvania will accomplish this by enforcing accountability in the health care industry.

First, the Prescription for Pennsylvania will eliminate the ability for businesses to refuse their employees health insurance. Not only do businesses gain an unfair advantage over their competition, they also pass their employees’ health care costs onto other Pennsylvanians. The Prescription for PA will assess a percentage of a business’s payroll if its employees are not provided health insurance.

Second, the Prescription for Pennsylvania will more effectively regulate the insurance market by strengthening oversight of health insurance companies and HMOs. The state will limit premium increases, establish a standard basic heath care package, and requiring insurance companies to spend at least 85 percent of the premiums they collect on health care.

Third, the Prescription for Pennsylvania will require hospitals to provide more appropriate site for treatment of conditions that do not require emergency room care. By redirecting these visits to more appropriate and less costly sites, the potential savings could total as much as $232 million. Hospitals will be required to screen and redirect patients who do not require emergency room care to a more appropriate level of health care provider within the hospital.

These regulations will allow Pennsylvania to provide affordable health care for every resident. By eliminating the factors that are driving health care costs higher, the Prescription for Pennsylvania can significantly reduce the costs of care.

Accessibility

Though, many Pennsylvanians cannot afford health insurance, others simply cannot access primary care providers and services. Those without access are forced to either go without health care or rely on emergency rooms for their primary care rather than appropriate and cost-effective settings. The Prescription for Pennsylvania will expand access to appropriate care, improving the care that Pennsylvanians receive while reducing the cost of health care.

First, the Prescription for PA will address the needs of areas in Pennsylvania where there are shortages of primary care providers. One out of every ten adults say that they do not have a personal doctor or health care provider. The Prescription for Pennsylvania will solve this by providing start-up resources for federally qualified health center and nurse-managed care centers. These facilities will provide ongoing, regular care, particularly in shortage areas.

Second, the Prescription for Pennsylvania will expand the ability of Pennsylvanians to access health care in the evenings and weekends. Both the uninsured and the insured require medical attention during evenings and weekends, leaving many with no choice but to visit expensive emergency rooms. The Prescription for Pennsylvania will provide financial incentives for health care providers that provide services in the evenings and on weekends.

Third, the Prescription for Pennsylvania will increase the diversity of the health care labor force, which will effectively increase access to health care by Pennsylvanians of all racial, ethnic and language barriers. The racial, ethnic and cultural composition of the health care workforce in Pennsylvania is in sharp contrast to the composition of the general population. Also, racial and ethnic minorities are less likely than whites to receive needed medical services. The Prescription for Pennsylvania will broaden the diversity of the health care workforce, requiring access to real-time language translation services in hospitals. The plan will also require support programs to improve cultural competency in the workforce while decreasing demographic disparities, which will increase the likelihood that Pennsylvanians of all backgrounds will receive quality health care.

These initiatives will ensure that health care is available to every Pennsylvanian in the right place, at the right time, by the right physician. The Prescription for PA will eliminate the need for any Pennsylvanian to require emergency room treatment for non-emergency care.

Quality

Incorrect, ineffective, and inadequate health care is more expensive than quality health care. Every avoidable infection, every emergency hospitalization for a chronic illness, and every preventable disease is another lost opportunity to save millions of dollars in health care costs. The Prescription for Pennsylvania will create a culture of quality by improving health care quality, enhancing patient safety and promoting wellness.

First, the Prescription for Pennsylvania will eliminate hospital-acquired infections, medical errors and unnecessary and ineffective care. Eventually, Pennsylvania will stop paying health care providers for care associated with medical errors. The Prescription for Pennsylvania will require hospitals to adopt and implement policies of quality management and error reduction.

Second, the Prescription for Pennsylvania will promote a payment system that rewards quality care with a Pay for Performance initiative. This payment system will encourage the effective prevention and treatment of chronic diseases, such as heart disease, diabetes and asthma. Pennsylvania will use a nationally recognized and proven chronic care model to align payments.

Third, the Prescription for Pennsylvania will implement policies that encourage healthy lifestyles. All Pennsylvania workplaces, restaurants and bars will become smoke-free. Also, wellness education and nutrition programs will be taught in Pennsylvania public school in conjunction with access to school breakfast and nutritious foods throughout the school day. Finally, consumer incentives will be offered to reward Pennsylvanians for healthy behavior.

By providing the best quality of care the first time and promoting wellness, Pennsylvania will save money by improving its residents’ lives. Quality and preventive care will save billions of dollars and thousands of lives each year. The overall cost of care will lessen and the overall quality of life will improve.

Resulting Legislation

Since its proposal in January, facets of Governor Rendell’s Prescription for Pennsylvania proposal have been introduced, passed and signed into law. The Pennsylvania legislature passed a bundle of bills (Act 48 and Act 51) expanding the treatment nurses and other qualified medical professionals are permitted to provide, successfully expanding the scope of practice. Governor Rendell signed the bill into law on July 20, 2007. This law will improve access and lower the costs of health care by expanding the role of nurses, physician assistants, midwives, and other medical practitioners in providing care.

The second piece of the Prescription for Pennsylvania passed by the legislature was a bill to reduce the number of hospital-acquired infections. Act 52 was signed into law on July 20, 2007 and will save up to $3.5 billion and nearly 2,500 years annually by reducing the instances of hospital-acquired infections.

Finally, the Pennsylvania legislature passed a bill to improve assisted living care facilities and treatment by providing further criteria for the licensing and regulation of personal care and assisted living homes. Act 56 ensures that the elderly and those in need of assisted living will be offered greater choices. The bill, signed into law on July 25, 2007, will also allow Pennsylvania to optimize the allocation of public and private resources to personal and assisted living centers.

Governor Rendell also issued two executive orders in May of 2007. These orders established the Chronic Care Management Commission to improve the treatment of chronic diseases and the Office of Health Equality to reduce the health disparities among racial minorities and other groups. The Chronic Care Management Commission will establish a chronic care model, which has been nationally recognized as a means to improve the quality of chronic care while saving money and preventing unnecessary, expensive hospitalizations. The Office of Health Equality will promote and develop programs that address health disparities and track and improve health among underserved groups.

While the Pennsylvania legislature has passed several pieces of the Prescription for Pennsylvania proposal, other aspects remain stalled. The House and Senate remain unable to reach a compromise on a clean indoor air act to protect children and nonsmokers from the harmful effects of secondhand smoke (House Bill 720, House Bill 1419, House Bill 1541, and Senate Bill 246. A bill (House Bill 796) that would extend insurance coverage for the typically uninsured and underinsured young adult segment of Pennsylvania has been passed in the Pennsylvania House, but remains in the Pennsylvania Senate Committee on Banking and Insurance. Finally, two separate bills (House Bill 979 and Senate Bill 547) have been introduced to limit the factors insurers can use to determine premiums. The Prescription for Pennsylvania calls for an adjusted community rating based on age, family size and geographic location alone. Currently, the two bills differ in what insurers are allowed to base rates upon.

Only one component of the Prescription for Pennsylvania has yet to be introduced to the legislature. The centerpiece of the proposal, Cover All Pennsylvanians, is scheduled for introduction in October 2007. Cover All Pennsylvanians will make health care affordable for the majority of uninsured Pennsylvanians, whether they obtain insurance through their employer or purchase it themselves.