Rendell taking steps with tough issues, local officials say

January 27, 2003|by STACEY DANZUSO

CHAMBERSBURG, Pa. - There may not be a "magic bullet" to cure the economic woes Pennsylvania Gov. Ed Rendell has inherited, but even before his inauguration last week, local officials say he was taking steps to solve such issues as economic development and medical malpractice.

"The reality is these issues are so complex. There is no easy, simple, quick fix to Pennsylvania's problems when you look around to medical malpractice to taxation to work-force development," said David Sciamanna, executive director of Chambersburg Area Development Corp. "There really will be very little he will be able to do short-term."

Rendell knows he has to focus on work-force development and initiated a series of meetings with teams of community leaders to discuss concerns.


"It boils down to Pennsylvania is at the bottom for job creation," said Sciamanna, who attended one of the summits earlier this month.

He said the population is getting older and the younger people are leaving, creating a long-term concern.

"For the governor to fulfill his commitment to increase funding for education, particularly in the area of property tax reduction, the only way that will happen is if he gets the economy growing."

Rendell's charisma and energy may do the most for the state, Sciamanna said.

"That may very well be his best chance in terms of creating an environment and attitude to help communities pick themselves up and move forward," he said.

With a possible $2 billion deficit in the next budget and a rainy day fund that has all but dried up, Rendell faces a tough battle.

"All these things combined present an enormous challenge," Sciamanna said.

He noted that Franklin County is part of the 15-county South-Central region that is pushing the state's economy upward, and that Rendell's plan for a $2 billion pool to help drive local economies might jump-start growth elsewhere.

"But if we have good projects, we will get our fair share," Sciamanna said. "We are fortunate that we always have new projects in the pipeline."

Rendell has also shown that addressing the skyrocketing cost of medical malpractice insurance is another critical issue by establishing a commission charged with finding short- and long-term solutions.

As governor-elect, Rendell worked with Gov. Mark Schweiker to avoid a walkout by physicians.

"We faced a potential crisis of doctors walking out, particularly in Philadelphia and Scranton on Jan. 1. They would be leaving permanently," said Norman Epstein, president of Summit Health, in Chambersburg.

The commission came up with a plan to allow physicians in specialties with high medical malpractice premiums to skip their payment to the state-run insurance fund in 2003 and cut payments for other doctors in half, Epstein said.

"It gave doctors a certain degree of confidence he is serious. Just one year of relief doesn't change a lot, but it is a good step from my perspective," he said.

That still needs to be approved by the legislature, but to avoid the walkout, Schweiker postponed payment for four months.

"If they have to pay come April 30, there will be an exodus," Epstein said.

To compensate for the loss of revenue, Rendell has proposed tapping into insurance company reserves.

Fred Stenger, chairman of Summit Health's finance committee, said it is unfair that the surcharge on insurance companies would come from a relatively small percent of payers, but said Rendell has demonstrated that he understands it is a crisis situation.

In 2001, major carriers in Pennsylvania increased their rates from 21 to 90 percent. For 2002, the insurance companies again hit doctors with an average 40 to 50 percent rate hike.

Rendell has come out against a recommendation by President George Bush to put a $250,000 cap on noneconomic damages for pain and suffering and some legal fees in certain medical malpractice issues.

Epstein, on the other hand, said he would like to see the suggestions enacted, but he still is encouraged by what he has seen Rendell doing so far.

"He is getting in there and doing it. How he will work with legislators, we will have to wait and see," he said.

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