The next issue is the closure of hospitals. In the 166th District, our only hospital - Mercy Haverford - closed its doors in 2002, and has not reopened. This, alarmingly, is not an isolated incident. In 2001, Allegheny Health System went bankrupt - resulting in the closure of a half dozen local hospitals within a 25 mile radius of Mercy Haverford. Since 2000, more than 400 physician practices have closed their doors in the 166th District alone. Not a single practice has opened here since 1992. In 1985, the percentage of doctors in Pennsylvania under the age of 35 was 18 percent. Today it is 4 percent. Younger doctors are reluctant to contend with the astronomical malpractice rates, and so they settle in other states. Those physicians who remain are getting older and many are nearing retirement. It does not require much imagination to see the looming shortage.
One would assume that every participant in the health care industry must be suffering similar setbacks, but that assumption would be incorrect. The insurance companies in this state have amassed a surplus estimated at more than $6 billion beyond their legally required reserve funds.
What we politely call this surplus is more accurately called an overcharge. In 1992, the average family spent less than $300 on their health insurance. Today that premium has increased to over $800. At the same time, insurers have stopped insuring elderly citizens in some parts of the state. It is nearly impossible to justify the rate of premium increases, and the reductions in coverage, with the enormous surpluses.
The obvious place to seek an answer to the spiraling health cost problem would be the level of compensation being paid to doctors. But typically, doctors receive a pittance from the premium paid to the insurers. Often a doctor will receive as little as $6 from the insurance company for a 30-minute consultation with a patient. This does not even cover the cost of maintaining an office.
In the traditional health care model, doctors were paid only when they treated patients. This is called the "Fee for Service" model. But under the ubiquitous HMO model, every element of the health care industry profits by denying care. Think about this proposition. Hospitals, doctors, and technologists have an economic interest in not delivering care. This needs to be closely scrutinized, and if the HMOs are unable to correct this conflict of interest, we need to return to "fee for service" policies.
Ultimately, the answer is that the control of health care costs must be taken more seriously by the state legislature in Pennsylvania. For too long, our elected representatives have either done nothing, or even worse opposed every reform that has been proposed to address this crisis.
The legislature must quickly push through legislation to bring privatization to the nonprofit insurance industry. Competition has lowered costs and improved performance in other fields and there is no reason to believe that it wouldn't have the same effect in health insurance. Some states allow Associated Health Insurance Plans to offer coverage to residents of multiple states. If a policy can be purchased more inexpensively in Illinois than it can in Pennsylvania, our rate payers deserve the opportunity to purchase that policy.
Doctors should be allowed to self-insure at least a portion of their coverage requirements. Doing so would allow those physicians who have trouble free terms to recoup their own money, rather than continue to poor it down a bottomless insurance pit.
The legislature must also require insurers to make adequate payments to physicians, and justify rate increases. And, it should provide incentives for medical school graduates to open their practices in Pennsylvania.
Taking some of these bold steps will allow Pennsylvania to enjoy excellent health care, at a lower cost. It will allow doctors to remain in practice in our state. It will make it possible for our children and grandchildren to enjoy first class medical care.
(Mr. Williamson is the Republican Candidate to represent the 166th District in the State House. The district includes Haverford Township, the 3rd and 4th wards of Marple and parts of the 4th, 5th and 7th wards of Radnor.)