Cost of health care a major concern to businesses

April 27, 2004|by DON AINES

CHAMBERSBURG, Pa. - The cost of health care has Pennsylvania businesses ailing, said several business people who attended a economic development symposium hosted by state Sen. Terry Punt.

"These high double-digit increases are just killers. The year-to-year increases are just devastating," said Dan Pheil, president of Landis Gardner in Waynesboro, Pa.

He said businesses that might otherwise be expanding and hiring new employees are not because of the skyrocketing costs of providing health-care coverage.


"Health care, for us, is approaching $1,000 per family per month," said Richard Bapst of Chambersburg Waste Paper Co. Inc.

"It seems to be an out-of-control expense," he said.

"If we don't do something pretty soon ... the state is going to be the provider of last resort," Bapst said.

That eventually would mean a socialized health-care system, he said.

"I think we started to go down the wrong road years ago when we started to go to managed care," said Punt, R-Franklin.

He said health care has become a "vicious cycle" where increases in reimbursement rates from insurers only leads to higher fees for service.

Punt said he had no answer to the question of upward spiraling health-care costs.

"We've attempted to deal with the issue as much as we can on the state level," he said.

"I don't have an answer and I was in the industry 25 years," said Adams County Economic Development Corp. President Steve Renner, a former executive with Gettysburg Hospital.

Nationalizing the health care industry is not the answer, Punt said.

"We want to encourage private competition" among insurers, Punt said. "The government is not profit-oriented" and would allow taxes and spending to increase without restraint.

The symposium was one of five being sponsored statewide by the Senate Republican Policy Committee, Punt said.

David Hess, a former secretary of the Pennsylvania Department of Environmental Resources, spoke about the consequences of a proposed $5-per-ton increase in tipping fees for municipal solid waste and a $4-per-ton increase to businesses for residual waste, such as food waste and coal ash, proposed by Gov. Ed Rendell.

Charles Bennett, the manager for environmental affairs for Knouse Foods Co-op, said the proposed increase in tipping fees could cost his company another $50,000 to $100,000 a year. Other executives questioned how much it will cost their companies to meet reporting requirements.

Hess said a $4-per-ton increase 20 months ago resulted in a slight decrease in the 26.5 million tons of waste disposed of in Pennsylvania each year, much of it from out of state.

Higher prices, however, may mean lower-than-projected revenues that could lead to more price increases in a few years. This will be passed on to consumers, Hess said.

Hess estimated the cost of the proposals at about $1 million in Franklin and Adams counties.

The red tape in Pennsylvania is an impediment to expansion, said Adams County Winery owner John G. Kramb. Of his five employees, he said one is needed just to fill out government paperwork.

Franklin County Area Development Corp. President L. Michael Ross said Pennsylvania does not have a reputation for being business-friendly and that the emphasis in the near future will be on retaining existing jobs rather than on creating new ones.

County businesses are competing against not only other U.S. companies, but foreign manufacturers, Ross said.

"There is no Chinese with Disabilities Act," Ross said of the regulatory hurdles facing domestic manufacturers. While the average Chinese worker earns 61 cents an hour, compared with $12 or more an hour for American workers, both countries have access to the same technology.

"Can we build a big fence and keep China out?" Bapst asked.

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