Pa. Health Board Fired, Rehired

Published September 1, 2008

The Pennsylvania Health Care Cost Containment Council, known as PHC4, was almost entirely done away with at the beginning of July when Gov. Ed Rendell (D) laid off 38 members of the 44-person board as a result of a political dispute with some members of the state Senate.

PHC4 is responsible for advising state government officials on the cost and quality of Pennsylvania health care, access to care for the uninsured, and proposed or existing health insurance mandates. Legislators passed a bill reauthorizing the council, whose mandate was set to expire July 1.

Strong-Arm Tactic

However, Rendell refused to sign the bill because it included language authorizing an extension of the Medical Care Availability and Reduction of Error (MCARE) abatement program, a malpractice subsidy.

Rendell had called himself in a March letter to health care providers “THE champion of the Mcare abatement” just before promising to prevent renewal of the popular program, which helps defray the skyrocketing cost of malpractice insurance, “until the Legislature passes a bill to provide affordable health care to more than 800,000 uninsured state residents.”

Analysts are calling Rendell’s move an attempt to strong-arm physicians and legislators into supporting taxpayer-funded “universal” insurance programs.

“Gov. Rendell is hitting the state’s health care providers where it hurts them most: In the pocketbook,” said Jeff Emanuel, research fellow for health care policy at The Heartland Institute and managing editor of Health Care News. “Rendell knows that taking away the MCARE subsidy that enables practitioners to afford the astronomically expensive malpractice insurance required by law will force them to the bargaining table–and the price he is asking of them, in order to restore MCARE, is help pressuring legislators to waste more of Pennsylvanians’ money on futile attempts to enact so-called universal health care.”

Council Reinstated

With neither side giving in on the issue, the council was all but dissolved for a week before Rendell backed down and reinstated the laid-off members through a July 8 executive order, which allows the council to remain in place through November 30.

“The Pennsylvania Health Care Cost Containment Council has added value since its inception in 1986,” said Rick Dreyfus of the Commonwealth Foundation for Public Policy Alternatives in Harrisburg. “It is my hope the council will be renewed for a significant number of years with fewer legislative encumbrances to facilitate the effectiveness of the council for the benefit of all who use their data.”

To continue operating, the council must have funding for its $5 million budget after November.

Second Time Around

This is not the first time PHC4’s renewal has been the subject of friction. In 2003 the General Assembly allowed the organization’s mandate to expire before legislatively reauthorizing it, though the council was allowed to remain in session during that time.

“The governor’s decision to reopen the council by executive order proves that his action to shut it down last week was unnecessary,” said a spokesman for Pennsylvania state Senate Majority Leader Dominic Pileggi (R-Chester).

Mission Change Advocated

“The Cost Containment Council is worth preserving,” said Greg Scandlen, director of Consumers for Health Care Choices at The Heartland Institute. “This is not because it has helped contain costs; it hasn’t. However, it has done a good job of revealing hospital-by-hospital prices for specific services. In fact, its mission should probably be redefined, since it serves as an agent of transparency far more than a cost containment body.”

“They [PHC4] do quality work,” said House Speaker Dennis O’Brien (R-Philadelphia). “They deserved to be reestablished. I am glad the governor stepped up to the plate.”

Krystle Russin ([email protected]) writes from Texas.