FAQ

1. What is the Pennsylvania Health Access Network?
   PHAN is a statewide coalition committed to the goal of health care access for all Pennsylvanians. Ten organizations started PHAN in 2007 and forty others have since joined. PHAN supports health system reforms that adhere to the following principles: • Access to quality health care for all Pennsylvanians; • Access to affordable, quality health insurance for all Pennsylvanians; • Effective controls to keep health care and premiums reasonably priced; • Shared responsibility for the cost of health care and premiums among all stakeholders (individuals, employers and the public sector). One of PHAN’s core tasks is to facilitate the process by which ordinary Pennsylvanians bring the power of their personal stories into the broader political process. Often this happens through the formation of local coalitions where people gather to tell their stories to one anther and then organize actions that project these stories to the public. Currently, local PHAN coalitions are meeting in Westmoreland, Allegheny, Erie, Dauphin, Montgomery, Delaware, Chester and Philadelphia counties. They have organized letter-writing, press events, community forums, legislative visits and phone-banking activities.
2. What is PHAN’s analysis of our health care crisis?
   Our health care system is the most expensive in the world. Yet as a system, it fails to provide the best health care in the world. Evidence of this can be found in our life expectancy, which is shorter than people living in other advanced economies. Medical costs currently consume 16-17 percent of our national income and are expected to grow to 20 percent by 2015. This has become a heavy economic burden that adds significantly to the cost of virtually every product and transaction in our economy. Some employers are trying to shed this cost by shifting the cost of health insurance to their employees or by abandoning health insurance coverage altogether. Thus, a growing percentage of people living in the United States are uninsured. Why is health care so expensive without achieving better outcomes? Here are key factors. • We expect a lot, including all the latest technologies, procedures, and pharmaceuticals. • In our decentralized system, medical providers have been slow to implement methodologies to prevent hospital infections and to manage chronic diseases. • A significant portion of our adult population is uninsured and cut off from cost- effective prevention and treatment practices. • Our insurance-based system is expensive to administer and adds around 30 percent to the cost of medical care. • We have done too little to take responsibility for our own health through diet, exercise, and the avoidance of harmful behaviors.
3. Who has access to medical care in Pennsylvania and who does not?
   The elderly have access to health care through Medicare. Around 5,000,000 working age adults have private health insurance through an employer health plans or direct purchase from an insurance company. Pennsylvania's Medicaid program helps 850,000 very low-income adults who are disabled or chronically ill access care; another 50,000 low-income adults have limited access to care through the adultBasic program. The Children's Health Insurance Program (CHIP) provides access to care for children who are not covered by a parent's health insurance plan. Who’s left out? Nearly one million working age adults below age 65 (12 percent of that age group) do not have any health insurance and are not eligible for government-funded programs. Without any form of insurance, they access medical care via emergency rooms, often only after becoming very ill and in crisis. If they suffer from a chronic disease, their treatment is not managed by a medical professional who sees them on a regular basis. They often do not fill their prescriptions or, if they do, they do not take prescription drugs in the recommended dosages. Usually they are charged retail prices for the medical services they receive. When costs pile up, many choose bankruptcy as the way out. Another big chunk of the population has insurance that is not adequate to provide the protection they need. Nearly 1.5 million Pennsylvanians (14 percent of the under-65 population) live in families that pay at least 10 percent of their pre-tax income for health care. Because of high deductibles, co-pays, payment limits and exclusions in their health insurance plans, these individuals find themselves responsible for thousands of dollars of health-related costs. For families on a tight budget, this kind of insurance prompts policy holders to avoid medical care until they are in crisis.
4. How will expanded access to health care affect the cost of medical care?
   Using a version of supply-and-demand theory, some have the mistaken view that expanded access will translate into higher prices for medical care. But remember that in our society, everyone can access medical care in some form if they are sick enough. In fact, health economists state that systemwide, for the uninsured we already spend 75 percent as much as we do for the insured.  Part of the problem is that those who are not insured often receive the most expensive care because they are prone to emergency treatments and expensive hospitalizations. The cost of this care is shifted to paying customers within the health system, adding nearly 7 percent to their costs. Far better – both for individual health and for everyone’s pocketbook – is a system that encourages healthy lifestyles, provides routine access to a physician for preventive care, and identifies medical problems before they become life-threatening.
5. Is private health insurance an important part of PHAN’s approach?
   Around 75 percent of Pennsylvania adults below the age of 65 have some form of private health insurance coverage, most (90 percent) through an employer. This is relatively high as compared to most other states. Moreover, the great majority of voters in Pennsylvania – over 90 percent – have a medical coverage plan of some kind. While we may complain about it, most of us are not ready to throw our existing plans overboard. Before taking such a risk, most of us would demand more than a politician’s promise that s/he has a new approach to health coverage. Most of us currently have arrangements with our employers that include wages plus a benefits package. These arrangements have been negotiated over many years. If our employers no longer provided health insurance, what would happen to the money that would be saved? Would our employers add it to our pay? Many are skeptical about this ever happening. While many of us complain occasionally about our employer-based coverage, we also appreciate the fact that we can complain to someone we know and push for a better plan. We aren’t so sure we would have that opportunity in a centralized system. So for now, PHAN is working to make our employer-based health insurance system work more effectively. That strikes us as the most realistic path to helping the most people.
6. What can be done to reduce waste within the health insurance system?
   Insurance companies have high administrative costs because they try to avoid insuring people who are likely to need medical care. This “cherry-picking” approach to health insurance is the way insurance companies maximize profits. But it introduces complexity and expense throughout the health system. These administrative costs can be reduced by adopting insurance reform standards into law. (Pennsylvania has done less of this than almost any other state.) Here are examples: • We can restrict the practice of “medical underwriting” whereby companies deny coverage to individuals who have a chronic illness such as diabetes or hypertension. • We can adopt “community rating” as the method to set insurance rates, thereby simplifying the process by which rates are set for employee groups. • We can require insurance companies to operate efficiently by requiring the pay-out (in payments to medical providers and reductions in premium payments) of at least 85 percent of the premiums they collect. • We can increase competition among insurance companies by requiring standard benefit packages for small groups and individual policies. • We can give the PA Insurance Department greater authority to review rates, scrutinizing them to ensure that savings from the reduction of hospital-acquired infections, reduced hospitalizations for chronic conditions, and decreased uncompensated care are reflected in lower premiums.
7. What does “shared responsibility” mean to PHAN?
   Much of the public debate around the health care crisis is framed by the discussion of responsibility. This way of framing the debate hooks easily into broader political debates between conservatives and liberals or between partisans of the Republican and Democratic parties. PHAN believes we as individuals are responsible for our own health care. We need to follow healthy lifestyles, seek preventive care, follow the advice of medical professionals, and within our economic means, save enough money to meet reasonable deductibles and co-payments. But it is nonsense to say (as some conservative commentators do) that consumers have too much health insurance, that consumers are using too much medical care, or that consumers should shop around for doctors and manage their own medical care to stay within a budget. That turns a positive value – personal responsibility – into an ideology that is disconnected from the reality of life. PHAN also believes employers play a key role in our health care system. By offering health insurance to employee groups, employers encourage participation by both the healthy and the sick, thereby facilitating the shared risk that is a fundamental part of a sustainable insurance system. Government also has responsibility for supporting a genuine public-private partnership that expands health care access and brings medical costs and insurance costs under control. This will include a mix of policies, some of which emphasize individual responsibility, some of which emphasize employer responsibility, and some of which involve public regulation and public subsidies. But we should not expect government at any level to provide the magical fix for our health care crisis. This is a problem we all have played a part in creating.

(April 2, 2008)