PHC4 | Critical Condition: The State of Health Care in Pennsylvania

Critical Condition: The State of Health Care in Pennsylvania - News Release

Contact: Joe Martin, Communications Director
717-232-6787 or

PENNSYLVANIA'S HEALTH CARE SYSTEM IN “CRITICAL CONDITION”

Harrisburg, PA - October 05, 2007 - A new government report released today by the Pennsylvania Health Care Cost Containment Council (PHC4) termed the state's health care system in “critical condition.”

Critical Condition: The State of Health Care in Pennsylvania was designed to provide a “big picture” view of the impact of health care on Pennsylvania's economy, and a different approach to broad topics, such as health care spending, health insurance coverage and costs, provider and insurer finances, supply and utilization trends, and health status.

“The report, which is a compilation of information from PHC4 data as well as a variety of outside sources, shows that every sector is affected by the state's health care crisis,” said Marc P. Volavka, PHC4’s Executive Director. “That's why the Council's various stakeholders who represent labor, business, physicians, hospitals, insurers, nurses and other groups are united in their agreement and concerns about the gravity of this issue.”

“Unfortunately, the report shows that most of the state's health care trends are headed in the wrong direction,” noted Volavka. “Over the past decade, personal health care spending, health insurance premiums, the uninsured population, and the number of hospitals in financial distress have all increased. However, we also have seen lagging Medicare reimbursements to hospitals, a decline in the number of Pennsylvanians with job-based health coverage and in the number of acute care hospitals, and a worsening of our health status in certain key areas.”

“Pennsylvania businesses are deeply concerned about this problem,” said David R. Kreider, the Pennsylvania Chamber of Business and Industry's Vice President, Operations and Treasurer and PHC4's Chairman. “Rising health care costs are an increasing burden for Pennsylvania employers trying to compete in a global economy.”

“Workers across the state are shouldering more of the burden for soaring health care costs, or going without coverage altogether,” said David H. Wilderman of the Pennsylvania AFL-CIO and PHC4's Vice-Chairman. “With health insurance premiums rising faster than overall inflation and workers' earnings, family budgets are being squeezed tighter than ever.”

According to PHC4, by showing how various stakeholders all have a role to play, Critical Condition illustrates how meaningful health care reform will require the collective will of diverse constituencies working together in an aggressive and coordinated fashion.

The report was developed through PHC4's Education Committee under the leadership of former Council member David B. Acker. Mr. Acker is the former CEO of Charles Cole Memorial Hospital in Coudersport, PA and currently the CEO at Canton-Potsdam Hospital in Potsdam, NY.

“PHC4 owes a huge debt of gratitude to David Acker for his contribution to this publication,” said Mr. Volavka. “His thoughtful guidance, leadership and input were essential in spearheading this new report, as was the work of PHC4's Education Committee.”

Key findings: (Sources are footnoted in the full report.)

In 2004, total personal health care expenditures accounted for 16.1% of Pennsylvania's Gross State Product, up from 11.3% in 1985.
The health care and social assistance sector was the state's leading employer in 2005. Health care and social assistance jobs (912,867 jobs) comprised 12.8% of Pennsylvania's total jobs, ahead of retail (11.6%), government and government enterprise (11.4%) and manufacturing (10.0%).
The number of uninsured Pennsylvanians rose by an estimated 291,000 people from 2000 (905,000) to 2005 (1,196,000).
The number of Pennsylvanians receiving health insurance through employment decreased by an estimated 450,000 people from 2000 (8,569,000) to 2005 (8,119,000).
Employer-based health insurance premiums for family coverage increased from $6,721 per employee in 2000 to $11,801 in 2006.
More than one-third of Pennsylvania's general acute care hospitals are presently in significant financial distress, and two-thirds are performing at levels considered below long-term economic viability.
In general, the average age of Pennsylvania's hospital facilities and equipment is increasing and aging beyond the national average.
The number of licensed ambulatory surgery centers in Pennsylvania has quadrupled since FY96, growing from 44 in FY96 to 177 in FY05.
Payments to hospitals from Medicare continue to shrink and the costs of treating Medicare patients (which tend to be the sickest and most expensive) are being shifted to commercial insurers – even though the portion of inpatient discharges covered by Medicare has increased and the portion covered by commercial insurers has decreased.

The Pennsylvania Health Care Cost Containment Council is an independent state agency charged with collecting, analyzing and reporting information that can be used to improve the quality and restrain the cost of health care in Pennsylvania. Copies of Critical Condition: The State of Health Care in Pennsylvania are free and available on PHC4's website at http://www.phc4.org.