A State's Plan for Universal Healthcare

Gov. Ed Rendell tells U.S. News how Pennsylvania aims to rein in costs and provide healthcare to all.


With healthcare reform getting short shrift from the federal government in recent years, states have been tackling it on their own. Last year, Massachusetts became the first state to require that its residents have health insurance. Governors of other large states like California, Illinois, and Pennsylvania have put forward ambitious reform proposals of their own. In Pennsylvania, Gov. Edward G. Rendell's "Prescription for Pennsylvania" aims to improve access to affordable health insurance while cutting healthcare costs systemwide. He recently discussed his plan with U.S.News & World Report.

What makes Pennsylvania different from other states when it comes to healthcare?

We're the second-oldest state [in terms of residents' average age]. Chronic diseases are a real problem. The press mostly focuses on aspects of our plan that would cover all our citizens, and that's understandable. That's the big, sexy issue. Last year, we passed a bill called "Cover All Kids," and by 2009, if everything holds, we'll have all of our 150,000 uninsured children covered. "Cover All Pennsylvanians" is what we call our effort to cover the 800,000 uninsured adults.

But in the long run, the second part of our plan is more important, and that is to begin the battle to constrain, contain, and actually reduce healthcare costs. Because that affects the remaining 12 million people in Pennsylvania, and it is desperately needed. Between 2000 and 2006, family healthcare premiums increased by 75 percent. Inflation increased by 17 percent and median wages by 13 percent. Obviously, that puts a tremendous burden on the company that offers healthcare, because costs are outstripping inflation, and on the employee who's asked to contribute. Unless we can contain and begin the process of reducing healthcare costs, there will be no employer-based healthcare in Pennsylvania or anywhere else in seven or eight years. It's undoubtedly exacerbated in Pennsylvania because of the demographics of our population.

How would your plan help reduce the costs of chronic disease?

We have more chronic heart disease, chronic lung disease, and diabetes than most states. A physician gets paid for doctor visits and for hospital visits, nothing else. That's a system that's doomed to failure. There's no payment for managing your disease, preventing it from getting worse. In 10 states, they've adopted a model that uses a team approach, [in which] you have your primary-care physician, but you also have your nurse practitioner, physician assistant, nutritionist, and pharmacist. All of them take part in constant patient oversight and management. Let's assume you've been diagnosed as diabetic. After you leave the doctor, you get a call from the nutritionist. She says, "How's your diet doing? Are there things that are tough for you on it? Because I can make substitutions." That's an ongoing process. We have to restructure the payment schedule so we get paid for the nutritionist's time. Based on the experience of the 10 states and their degree of hospitalization compared with our degree of hospitalization, we believe that in the four most prevalent chronic diseases— diabetes, lung disease, heart disease, asthma—we can cut hospitalization to the tune of $2 billion.

You've spoken of another way you plan to reduce hospital costs. Tell us about it.

Hospital-acquired infections. In 2005, there were 22,000 cases of hospital-acquired infections in Pennsylvania, resulting in 2,500 deaths, with a cost to the system of $3.5 billion. In the United States, the average hospital stay costs $31,000. If you acquire an infection during your stay, you add $150,000 to the cost of that stay. It's enormously expensive to battle it. So we just passed legislation that requires, first of all, to test almost everyone. Secondly, the hospital has to file a hospital-acquired-infection control plan that has to be approved by the health department. And there are incentives: If they reduce hospital-acquired infections, we give bonus payments.