HARRISBURG, Pa. — Gov. Edward G. Rendell, an unapologetic big-city liberal who campaigned as a health care reformer, might have been expected to propose a plan to cover the 900,000 Pennsylvanians who are uninsured.
And he did so, after winning reelection last year in a landslide. But like other governors in the vanguard of health policy, Mr. Rendell also concluded that such a move would be unaffordable, and perhaps politically unattainable, without serious efforts to control costs.
As a result, Mr. Rendell’s “Prescription for Pennsylvania” included a ban on smoking in public places, a reduction in the rate of hospitalization for chronic diseases and an expansion of the role nurses play in treating patients. He even framed his proposal to provide universal access as “a form of cost containment,” emphasizing that 6.5 percent of every health-insurance premium in Pennsylvania went to subsidizing care for the uninsured, often in emergency rooms.
Mr. Rendell is learning, however, that to contain costs is eventually to pluck dollars from someone’s pocket. His plan has incited protest from hospitals, doctors, insurers and small businesses, each of them finding something to detest.
[A contentious legislative budget session has led to a stalemate that put the fiscal plan 10 days overdue as of yesterday after the state furloughed some 25,000 workers and suspended many services. But lawmakers said the impasse was broken late last night.]
Mr. Rendell seems to be facing an uphill task. Once confident that his package would win quick approval, he now puts the odds of success at 50-50. Mr. Rendell says he is calling for shared sacrifice. “Everyone’s ox gets gored a little bit in this,” he said in an interview here. “If we’re ever going to have accessible health insurance for all Americans, we have to begin by containing costs. If costs continue to spiral out of control, there is no way the government can afford to pay for it.”
Other big-state governors who are leading a second wave of health care overhaul — after recent expansions of coverage in Maine, Massachusetts, and Vermont — are also making strong comments about runaway costs, as are presidential candidates in both parties.
Gov. Arnold Schwarzenegger of California, a Republican, has emphasized in recent speeches that his plan to make insurance mandatory must be accompanied by stringent reductions in health care spending.
Like Mr. Rendell’s plan, the Schwarzenegger one has run into opposition from doctors, hospitals and businesses that are upset about his proposals to tax their revenues.
In Illinois, Gov. Rod R. Blagojevich, a Democrat, is selling his health care plan by forecasting that the savings generated by better management of chronic diseases and expanded use of electronic records will exceed the cost of extending coverage to 1.4 million adults. Mr. Blagojevich is trying to revive his plan after legislators rejected a proposal to pay for extended coverage with a tax on gross business receipts.
“The key is, Can you package the reforms to show what impact it’s going to have on people with insurance so that you can motivate labor and big business?” said Kenneth E. Thorpe, a professor of health policy at Emory University who is advising Mr. Blagojevich. “In Illinois, we showed that every $1 in state spending would yield $2 in savings for people with private health insurance. That refocuses the debate.”
In Pennsylvania, Mr. Rendell makes his case by explaining that insurance premiums increased by 76 percent from 2000 to 2006, six times the rise in median wages. A major cause, he argues, is the more than $6 billion in unnecessary annual costs for the treatment of infections, injuries caused by medical errors and controllable chronic conditions like diabetes, asthma and heart disease.
Last year, Pennsylvania reported 19,154 cases of hospital-acquired infections in 2005, generating nearly 400,000 additional patient days in the hospital and $3.5 billion in charges. The state recently detailed 175 hospital medical errors over a 30-month period, many of them classified as “wrong-site surgeries.”
Mr. Rendell’s plan would require hospitals to adopt hygiene practices that have reduced infection rates at several Pittsburgh hospitals, some as simple as more hand-washing. To manage chronic diseases more efficiently in a state with a large elderly population, the plan would give incentives to providers who encourage healthier lifestyles and closer attention to medications.
Mr. Rendell said he did not propose making insurance mandatory, as is the case in Massachusetts and in Mr. Schwarzenegger’s plan, because he wanted first to drive down the cost of care. He said he had reasoned that unlike limiting reform to coverage of the uninsured, who make up about 7 percent of the state’s population, a focus on cost control would appeal to every Pennsylvanian who visits a doctor or pays a premium. It could also win over business interests because of the impact of health costs on corporate bottom lines.
But hospitals are lobbying against his proposals to regulate expenditures for new construction and equipment and to cut off reimbursement payments when patient stays are extended because of medical mistakes and preventable infections. Doctors do not like his proposal to give more responsibility to physicians’ assistants and nurse midwives.
Small-business owners are protesting his call for a “fair share assessment” — a 3 percent payroll tax on employers who do not offer insurance, with the proceeds dedicated to covering the uninsured. And insurers are working to defeat proposals that would prohibit consideration of preexisting medical conditions in rate-setting and require that at least 85 percent of premiums be spent on health care costs as opposed to administrative overhead.
The Senate remains in the hands of Republicans who side with hospital, insurance and business interests. In the House, Democrats are fighting to hold the single-seat majority they gained last November after 12 years in the minority. Neither chamber is in the mood to raise taxes, and Mr. Rendell’s “fair share assessment” has won little support.
The governor has linked budget negotiations to some of his proposals, and the legislature is still considering them. But his broader plan has effectively been tabled until a fall session because of business opposition to the payroll tax.
“When small businesses don’t offer coverage, it’s not because they don’t like their employees,” said Gene Barr, vice president for the Pennsylvania Chamber of Business and Industry. “It’s that they can’t afford it. I’ve had e-mails and phone calls from small businesses saying, ‘Look, if this goes in, I close.’ ”
In a state where 71 percent of the uninsured are employed, Mr. Rendell said it would be unfair for small businesses to not share in the pain. He said he hoped to persuade companies that provide insurance to persuade large corporations that do provide insurance to help apply pressure.
But he also said he would hold his nose and sign a bill that paid for expanded health care insurance through an alternate source if the legislature came up with one.