Bibliography
Sabatini J. Monatesti

Mr. Monatesti is the President of a small management consulting business, ES Enterprises Inc. He has thirty years of IT experience and has specialized in health care reform for the last five years. He has a Master of Science Degree in Information Systems Engineering, Polytechnic University, 1990 and a Bachelor of Science Degree in Electrical Engineering, Pennsylvania State University, 1970. Mr. Monatesti’s most recent health care endeavors include two pending patents (Care Order Management System and Public Accountability Knowledge System) as well as the “Fast Track RHIO” methodology, and the authorship of multiple articles on health care reform, including “A Cure for American Health care (at www.Wellneess.wikispaces.com). He is a member of the Northeast Pennsylvania Health care Reform Task Force (NEPA HRTF) chaired by Representative E. Day Pashinsky, a charter member of Pennsylvania e-Health Initiative (PAeHI), and the founder of the Patient Health Information Network (PHIN) Consortium and North East Pennsylvania Regional Health Information Organization (NEPA RHIO). He resides with his wife of 43 years in Salem Township, Luzerne County, PA.

Introduction:

The House of Representatives, Commonwealth of Pennsylvania, NEPA HRTF White Paper[1], dated January 20, 2009[2], sums up the crisis faced by businesses and the taxpayers in our great State of Pennsylvania this way: “No one can dispute that we are in a crisis! But, which one is it? Is it a financial crisis? Is it a mortgage crisis? Is it a health care crisis? Is it an economic crisis? Or a CONFIDENCE crisis?!!! All of the above….yes, and there is more going on in our society that portends of great danger for all of us, the small business and the citizen taxpayer. What about it? Well, if we do nothing, the danger of catastrophic results is beyond description.”

Business & Taxpayer Distress:

Pennsylvania is home to about twelve million citizens. About one third of these are elderly, on fixed incomes, one third are children attending school, and the other third are persons of working age. About one third of the citizens of Pennsylvania live in the North Eastern and North Western sections of Pennsylvania. A little over 1% of the citizens of Pennsylvania live in towns along the river in five counties[3] aligning the Susquehanna River basin, i.e., Northumberland, Montour, Columbia, Luzerne, Lackawanna and Wyoming (Attachment number 4). On average, the median age is about forty, seventy five percent have a high school education, a median household income of about $27K, and if they own a home it has a median house value of $67,000[4]. These citizens may pay consumption taxes, school taxes, township taxes, county taxes, state taxes and federal taxes that represent about 30% of their income[5]. They also pay health insurance of about $10K per year per family of four, if self employed or if they are one of the many whose small business has dropped health insurance (occurring at the drop rate of 4.5% per year, Attachment number 5, they are uninsured. They pay automobile insurance about $500 per year per car, homeowners insurance about $800 per year, feed and household care for their family for about $800 per month or $9,600 per year, and they must pay electric, heat, water, sewer, telephone, cable TV or Internet fees that approach $4,000 per year.[6] And in many cases many have lost their retirement investments[7] due to the financial crisis[8]. And unlike government employees they cannot ask their representatives or school boards to make good on their benefits program[9].

A Crisis of Fear, Uncertainty and Doubt:

To build a perspective it is important to review historical factors. As reported in local newspapers, Pennsylvania citizens may be suffering from double standards affecting their health, income and health care (Attachment number 3). There is one standard for the average “working Joe,” the elderly, the very poor, children, and employers. There is another standard for state employees, lawmakers, teachers and other civil servants. In Pennsylvania:
· The average Joe receives a salary of $30K per year (see Attachment 1) and pays out 30% in taxes, many of which are hidden from view, (see Attachment 2)
· Teachers on average earn about $50K per year
· Some health care professionals earn as much as $300K per year[10]
· Civil servants, the legislature and teachers have received increases of 25% to 50% in their benefits at Joe’s expense[11].

Citizen Joe suffers from an apparent disparity in what he can earn to provide for his family because their basic needs are not being satisfied[12]. One of these needs is a quality education. Joe understands that his local public school is performing poorly as indicated by the lack of proficiency in math or reading[13]. This is a problem because it directly affects one’s ability to obtain and maintain a decent job because industry does not settle in an area with poor proficiency scores. Another problem Joe faces is basic to his family’s survival. These needs include a decent home, good health care, affordable insurance, and a small nest egg for their future. Joe becomes distraught when he looks around his community and sees that many teachers, civil servants and professionals receive free benefits, such as, health care, life insurance, and long term care insurance. The average Joe may pay for his benefits at 50% of their value and still others pay the full amount[14]. If Joe worked at the local factory, he is not only losing his job, but he is losing his benefits as well. Most of the employers are unable to afford health insurance for their employees. In fact, they are dropping health insurance benefits at the rate of 4.5% per year[15]. In some cases, employers have gone out of business due to the low cost of foreign imports[16] and the employees in those industries expect to lose their benefits.

To make matters worse, Joe lives in an area ripe with individuals on fixed incomes averaging about $24K per year. Based on national averages and recent research, if you want to live in the area, raise a family, own a modest home, have a life insurance policy and put something away for retirement, then you need a minimum of $36K per year for a family of four. Not only is Joe unable to do it, but the elderly are faced with a decision to install sewers, buy medication, pay medical expenses or buy food. At the end of the day they may even lose their homes. It doesn’t matter that they have lived in their home for 30 years or so[17].

Joe and the employer look at their community’s education system and wonder about its sustainability. They know it costs about $10K per student year[18]. Joe and his wife attended the local school system and it cost the home owners $240K for their 12 years of school. They are proud of their high school diploma and both of them have additional training in a trade. They realize that their two children will attend the local school at a cost to the home owner of another $240K. Hence, in twenty-five years, Joe’s family would have received a benefit from the community of $480K. He understands that about 50% of the amount came direct from state subsidies. His employer and his retired father told Joe this investment in education is a bad one. They noted that Joe owns a $50K home. He hopes to live in this home for about 50 or so years, which will mean that his contribution to his education, based on paying school tax on his home of $500 per year, will amount to about $250K. Yet despite the cost, Joe and his family receive low value from the investment in education due to the low proficiencies in math and reading. Just as disconcerting is the real fear that his community will be unable to sustain the ever increasing cost of education because the community is aging and lacks new industry[19].

When Joe and his dad, along with their employer look at the health care industry in the area, they are confronted with another problem[20] The local hospitals, in some cases, have high error and infection rates[21], as well as breaches in their security[22] . The cost of health insurance for his family of four is $10K per year. Joe is paying for one-half of the premiums. His employer has been working to initiate a wellness program, but the costs for the program are high and eating into his margin. The insurance company has not offered Joe’s employer a break on their insurance premiums saying that their loss experience is still too high[23]. To make matters worse, Joe received a note from one of the local hospitals indicating that his family’s electronic records were compromised. And recently, when his dad had his gallbladder removed, he contracted MRSA[24], which almost killed him. The hospital sent Joe’s dad a bill even though they had contributed to his problem. Joe couldn’t understand how the infection could have happened. He was wondering who was liable for this infection and he was told that it just happens.

One of Joe’s associates across town just lost his job. The person had a drinking problem and was never married. He was receiving welfare payments weekly and all of his recent health care costs, housing and food costs were covered[25]. It didn’t quite seem right. Joe lamented to his dad that it didn’t make any sense to work. He was having a difficult time making ends meet and his friend was getting a free ride. Joe told his dad that it might be better for his dad to rob a state bank; at least he would have a roof over his head, three square meals a day, access to free health care and advanced education[26].

Small Business and Taxpayer Bankruptcy:

With increases in benefits paid out to civil servants, teachers and others, and with losses in their 401K’s, the demand for additional tax revenues is driving the middle class into bankruptcy[27]. Joe and his family are being asked to make up the difference in the 401K managed by the Public School Employee Retirement System and the State Employees Retirement System[28]. They had $90 billion in assets before the recent financial crisis. Joe recently learned that the retirement cost for state workers, teachers, and lawmakers was about to triple; these costs includes free health care for 682,000 employees and retirees. He also learned that prisoners incarcerated in the state receive free health care, and that it cost about $36K per year to house each of these inmates xxii. Joe is understandably angry; that is more than he can make in one year.

Joe knows that one trip to the hospital for a major illness, with a loss of insurance, contributes to bankruptcy (Attachment number 6). He told his wife that if he contracts cancer, he doesn’t want treatment. Some new hires have pre-existing conditions and have great skills, but Joe’s employer can’t hire them because he can’t afford to insure them. Joe recently read that municipal police costs continue to rise, utility costs are increasing (PPL requested a 30% increase, profits up 98% since 2005), the cost of home health care are uncontrolled, and, in many cases, fraud is an everyday occurrence. Joe is distraught. His very security, his family’s security and their future are threatened. He knows that Luzerne County has a very high rate of heart-disease deaths, and that one in every two of the elderly, possibly his dad, will confront some form of dementia in the next few years[29]. Joe doesn’t have the $72K per year needed to keep his dad in a nursing home. His dad’s house, worth $75K, and his social security, $24K per year is all that is left. Joe is aware that he and his family will not have an inheritance. He is very aware that unless his children leave the area they will share his fate.

Suggested Actions:

Following are 14 suggested actions that can and should be taken to help improve the lives of people in our community who are struggling and threatened by the strains and inequities discussed above:

1. Stop giving away tax dollars to sustain retirement programs: If local governments, school boards, and state governments changed the way benefits for public employees are funded, the impact of benefit program losses on the homeowner would be significantly reduced.
2. Get health care reform now. NEPA HRTF noted that the American people will accept their moral and financial responsibility to contribute to improve the health care system as long as they know that their efforts are part of changing the present Health care System into a better more cost efficient Health care System.
3. Consolidate local school systems. By reducing the number of school systems from 501 to 101, the administration cost could be effectively reduced by an estimated 80%.
4. Introduce a state wide health plan for all civil servants, teachers and others and make the same benefits available to the average Joe. NEPA HRTF believes that a quality, accessible basic health care plan for all Americans is a RIGHT and a NECESSITY; it is NOT a privilege. National expenditures in 2007 for Health care were $2.4 Trillion. Insurance companies routinely add on the cost of treatment services an overhead cost of operations of 15 to 20%. A Price Waterhouse Coopers (PWC) report found that 30% to 40% of all health care expenditures in this country are wasteful. Hence, by creating an insurance shared risk pool with everyone insured and reforming health care, insurance premiums could be reduced.
5. Construct a non-profit regional health organization that is community focused and patient centric to aid in the transformation to improved home health. NEPA HRTF noted that new technologies creating E-prescribing, Medical Information Exchange, and interoperability, etc. will create more efficiency and provide for real time information enhancing the clinician’s ability to appropriately treat the patient. NEPA HRTF further noted that any federal health information system must support the idea of regional health information organization (RHIO).
6. Provide health care for the uninsured, remove pre-existing conditions, establish a shared risk pool, don’t allow anyone to go into bankruptcy due to an illness. A community focused, patient centric health care system and an insurance system that place the patient first using a shared risk pool supported by government reserves could significantly reduce the potential for bankruptcy.
7. Develop a state wide consumption tax to pay for schools. The state currently pays about 50% of the bill. With a consumption tax, the reduction of school districts, and one contract for health insurance the overall costs to home owners could be significantly reduced.
8. Make it advantageous for employers to offer wellness programs. Wellness programs will directly impact loss experience. With a reduction in loss experience the savings could be passed along to the employer and the employee.
9. Have insurance companies reduce premiums. Leveraging the shared risk pool concept would make all insurance carriers in the state share in the risk. The carrier reserves could be reduced by leveraging a government sponsored reserve fund for all insurers, hence the potential for company carrier loss is reduced and the consumer would enjoy reduced premiums.
10. Institute mandatory quality guidelines that include measuring and reporting errors and infection rates in the local newspapers. Once the public is aware of the quality of health care being delivered, they can make informed decisions. And once health care providers are aware of how they compare, quality improvements are more likely to be made.
11. Require one wellness advertisement for every TV ad that speaks to junk food consumption or use of medication and medical procedures.TV is filled with advertisements for prescription drugs, fast foods, and medical procedures. All of this information is a driver for the sick care industry. To add balance to the picture, inform the public about the potential of well care (e.g., lifestyle changes, healthy food and exercise, non-medical options, etc.) along with quality metrics so that the consumer could make a quality decision.
12. Reduce the cost of medication. NEPA HRTF noted that pharmaceutical companies are charging the U.S. consumer 3 to 5 times more for pharmaceuticals than Canada, Europe or Mexico. Providing legislation that would allow the State of Pennsylvania to negotiate with pharmaceutical companies for lower drug prices would significantly lower insurance premiums.
13. Make pay-for performance in education and health care mandatory. NEPA HRTF reports that the cost of poor quality in health care wastes 30 to 60 cents of every health care dollar. PENNSYLVANIA, April 11, 2005 – Although No Child Left Behind (NCLB) addresses critical issues that concern parents, students and community leaders in Pennsylvania, the results of a new report called Open to the Public reveal a public perception that NCLB adds burdens to the already-serious problems in the state, http://www.philaedfund.org/pdfs/press_release_nclb.pdf, The costs of poor proficiency in Pennsylvania is significant but a quantitative measure was unavailable for publication. California's high school dropouts cost state taxpayers approximately $46.4 billion annually, according to a recent study by the California Dropout Research Project (CDRP) at the UC Linguistic Minority Research Institute located at UC Santa Barbara. In addition, the authors estimate that the economic benefit from effective dropout intervention programs would be $392,000 per high school graduate.
14. Freeze taxes for elderly retired. The elderly are already behind the income curve, cutting them a break on taxes and moving to a consumption tax for education would significantly reduce their out of pocket expense, estimated reduction in school tax about $1,000 to $2,000 per year.

The 14 suggestions are what OUGHT TO be done, but we have to be practical and focus on what CAN BE done, because any disconnects between what ought to be done and what can be done will contribute to failure. The NEPA HRTF White Paper gives details regarding how to fund and implement these suggestions.

Conclusion:

Since it is impossible to build a perfect system, we should focus on transforming the current system into one that provides flexible social support and safety nets that are capable of aiding individuals, families, and communities. People like Joe are adversely affected by health and financial problems that, in many cases, are beyond their control. It is important that responsible members of society account for the system failures without punishing Joe. Society has a moral obligation to find ways to sustain strong family values, to bind our communities in a covenant of inclusion rather than separation, and ensure that the policies put forth empower and grow Joe’s capacity to provide for his family.

It appears that the current situation is contributing to the creation of a cast society. People like Joe are falling through the cracks; they are becoming the lower cast citizens.

Many years ago, Dr. Alfred E. Tonolo, a professor at Bloomsburg University, spoke about being a prisoner of war, captured by the Allies in Africa. For six months prior to his capture, he slept on the ground with very little to eat. Once captured, he was transported to a hospital at a prisoner of war compound in the mid west. It was there that he met his wife, a US Army nurse. He arrived and he received a bed role, a bed, a clean room to wash in and rations. When he arrived at the mess hall that morning, the cook asked him how he wanted his eggs. Dr. Tonolo became an American citizen and found the American dream. Joe may be getting rotten eggs or raw eggs today. It is our moral obligation to figure out the best way to adjust the system so that Joe’s situation could improve.

Attachment 1



Income_Distribution.jpg
Attachment 2


Taxes_Paid_Out.jpg





Attachment 3
Maslow’s Hierarchy of Needs

maslow.jpg



1. Basic life needs – air, food, drink, shelter, warmth, sex, sleep, etc.
2. Protection, security, order, law, limits, stability, etc.
3. Family, affection, relationships, work group, etc.
4. Achievement, status, responsibility, reputation
5. Personal growth and fulfillment


Attachment 4
Representative Community Profiles (Year 2005)


population_demographic.jpg




Attachment 5

Decreasing Employer Employee Insurance Benefit
Presented at Wilkes University, NEPA RHIO meeting, July 2006

employee_benefits.jpg






Attachment 6
Health care Crises

Presented at Wilkes University, NEPA RHIO meeting, July 2006crises.jpg












[1] http://www.pahouse.com/pashinski/documents/121%20Health%20Care%20Reform%20Book.pdf
[2] House of Representatives, Commonwealth of Pennsylvania, Northeast Pennsylvania Health Care Reform Task Force (NEPA-HRTF) NEPA HRTF Meeting on Health Care Reform Proposal Meeting held on December 18th, 2008 at 6 PM, State Representative Eddie Day Pashinski, 152 S. Pennsylvania Avenue, Wilkes–Barre, Pa.
[3] NEPA RHIO, A Community Healthcare Utility, Wilkes University 84 W. South Street, Wilkes-Barre, Pennsylvania, 18766, USA, July 22, 2006
[4] 2005 Census Figures, Situation assessment NEPA RHIO 2006
[5] Taxes Nibble Away All Day, Press Enterprise, 3185 Lackawanna Avenue, Bloomsburg, PA, 17815, April 15, 2007
[6] Taxes Nibble Away All Day, Press Enterprise, April 17, 2007
[7] 134 Jobs Unravel, Bloomsburg Mill Closes After 120 Years, Press Enterprise, 3185 Lackawanna Avenue, Bloomsburg, PA, 17815, April 1, 2009
[8] About 1 in 5 Can't Afford Basic Needs, Reference: Center for Economic & Policy research & the Center for Social Policy at the University of Massachusetts, Press Enterprise, 3185 Lackawanna Avenue, Bloomsburg, PA, 17815, October 15, 2007
[9] Pension Crises Looms for Taxpayers, Press Enterprise, 3185 Lackawanna Avenue, Bloomsburg, PA, 17815, December 12, 2006
[10] Geisinger Salary and Benefit Average $321K, Press Enterprise, October 26, 2006
[11] Premiums Increased 25-35% Last Few Years, Press Enterprise, 3185 Lackawanna Avenue, Bloomsburg, PA, 17815, October 6, 2007
[12] Maslow’s Hierarchy of Needs, http://en.wikipedia.org/wiki/Maslow's_hierarchy_of_needs, A Theory of Human Motivation, proposed by Abraham Maslow in his 1943 paper
[13] School Progress Reports, Press Enterprise, 3185 Lackawanna Avenue, Bloomsburg, PA, 17815, November 25, 2007
[14] Merck Ups Some Retires Fees, Press Enterprise, 3185 Lackawanna Avenue, Bloomsburg, PA, 17815, November 29, 2006
[15] Canaries in the Mine, The Erosion of Private Sector Coverage, NEPA RHIO, Wilkes University 84 W. South Street, Wilkes-Barre, Pennsylvania, 18766, USA, July 22, 2006
[16] Struggling for decades against influx of cheaply made foreign fabrics, seek benefits quickly, man misses chance for surgery before losing health insurance, Bloomsburg Mill closes after 120 years, Press Enterprise, 3185 Lackawanna Avenue, Bloomsburg, PA, 17815, April 1, 2009
[17] Unpaid Medical Bills in the Millions, Dave Folley, GMC spokesman, Press Enterprise, 3185 Lackawanna Avenue, Bloomsburg, PA, 17815, September 17, 2007
[18] Taxes Nibble Away All Day, Press Enterprise, 3185 Lackawanna Avenue, Bloomsburg, PA, 17815, April 15, 2007
[19] Gov. Rendell wants to slash the number of school districts statewide, eliminating about 400 of the current 501 Pennsylvania public school systems. The controversial proposal would make a more efficient public education system. Public school funding is to increase by $265.3 Million, a 2.8% increase over last year. Inquirer Staff Writers, February 4, 2009
[20] Health coverage: the life and death difference, More than 45 million Americans uninsured, another 50 million may be underinsured, Press Enterprise, 3185 Lackawanna Avenue, Bloomsburg, PA, 17815, April 8, 2007
[21] Why 90,000 Americans die every year, killer infections and dirty hospitals, Jan 07, Vol 48, No 1, AARP; Geisinger policy violated, Report examines role of unlicensed pharmacist in premature baby death, Press Enterprise, 3185 Lackawanna Avenue, Bloomsburg, PA, 17815, February 19, 2008;1999 report: Institute of medicine, Medicare to stop paying bill for hospital mistakes, Mistakes kill 98,000 patients a year, Press Enterprise, 3185 Lackawanna Avenue, Bloomsburg, PA, 17815, September 4, 2007
[22] Geisinger patient data stolen, 25,000 patents affected, Press Enterprise, 3185 Lackawanna Avenue, Bloomsburg, PA, 17815, December 14, 2006
[23] Subscribers’ interests must come before protecting the status quo at the Blues. The Blues argue that their enormous reserves are a necessary hedge against unforeseen future catastrophes. Health insurance costs, however, are a full-fledged catastrophe right now. Years of skyrocketing health insurance costs are forcing virtually every employer to reduce or even terminate health care benefits. Unlike the threat of a meteorite or the storm-of-the-century, this is a real disaster – and it is getting worse, http://www.smc.org/Article.cfm?id=329, SMC Business Councils
[24] MRSA spreading, Study: Staph infections killing more in US than AIDS, Press Enterprise, 3185 Lackawanna Avenue, Bloomsburg, PA, 17815, October 17, 2007
[25] The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA, Pub.L. 104-193, 110Stat. 2105, enacted August 22, 1996) is a United States federal law considered to be a fundamental shift in both the method and goal of federal cash assistance to the poor. Purpose “end welfare as we know it” many believe the new system has been ineffective.
[26] Cost of incarceration, State of Pa, Total cost per inmate in 2002 was $80.83 or $29,502.95 per year, $9.2 Million of the Department of Corrections budget is to house an increasing population, the population grew 5.5% from 2001 to 2002, total inmate population 49,666 (March 2009), total budget $1,298,500,000 Fiscal year 2003/2004, http://www.cor.state.pa.us/stats/lib/stats/2003_budget_presentation.pdf
[27] Municipal Police Costs, 22 communities spend an average of $81 per resident for police protection, Salem Township properties 4,269; 2007 expenditures for police $252K; General Fund Budget $667,279; police protection represents 37%, Press Enterprise, 3185 Lackawanna Avenue, Bloomsburg, PA, 17815, October 14, 2007
[28] A deal was struck that guaranteed 50% pension increases for most legislators and 25% increase for more than 300,000 state workers and teachers, Retirement cost for state workers, teachers, lawmakers about to triple, includes free health care; 682,000 employees and retirees $90 billion in assets, Public School Employee Retirement System, State Employees Retirement System, Press Enterprise, 3185 Lackawanna Avenue, Bloomsburg, PA, 17815, December 17, 2006
[29] Luzerne County is No 2 in state for heart-disease deaths, Times Leader, September 9, 2007; the Pennsylvania Health Care Quality Alliance (PHCQA) is a voluntary group of health care organizations collaboratively working together to improve the quality of health care for the people of Pennsylvania. Average quality as perceived by patients (eight topics) for five local hospitals was 58%, http://www.phcaq.org/reports/compare/index.php, The CDC says that approximately 17,000 people die in the US from hospital acquired MRSA (HA-MRSA) annually. This is almost completely preventable.