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Government Affairs Update

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Federal Relations

New Staff

The Office of Government, Community and Public Affairs is pleased to welcome Lloyd Horwich as the new Director of Federal Relations. Mr. Horwich comes to Penn from the United States Senate Committee on Health, Education, Labor, and Pensions, where he served as Education Counsel--Senator Christopher Dodd's senior staff member on education issues. In this capacity, Mr. Horwich worked on education policy and appropriations, including the No Child Left Behind Act and the reauthorization of the Department of Education's Office of Educational Research and Improvement. Prior to his service in the Senate, Mr. Horwich worked as a Policy Analyst in the Office of Student Financial Assistance at the U.S. Department of Education. He analyzed legislative, regulatory, and administrative issues regarding the federal student aid programs. Mr. Horwich earned a masters degree in public affairs and administration from the University of Wisconsin, Madison. He received his law degree from Boston University, and a B.S. in foreign service from Georgetown University. Click here for more on Lloyd Horwich.

Medical Liability Reform

In early July, the Senate took up the matter of medical liability reform.  Unfortunately, the Senate failed to pass a measure that would have continued floor debate on the issue of medical liability reform. Both Senators Rick Santorum (R-PA) and Arlen Specter (R-PA) voted in favor of advancing the debate on medical liability. However, unlike its companion bill, Congressman James Greenwood's (R-PA) HEALTH Act that passed the House earlier this session, the procedural vote in the Senate on the Patients First Act of 2003 prevented consideration of the bill at this time. By a 49 to 48 vote, the Senate failed to invoke cloture (the formal procedure used to end a filibuster) on the motion, which required 60 votes, to proceed to the bill. Senate Majority Leader Bill Frist (R-TN) said the Senate will take up medical liability reform legislation again in the fall, after the Senate returns from its August recess.

Commonwealth Relations

Budget Update

The new fiscal year for the Commonwealth has begun and the Legislature has yet to finalize Penn's appropriation. On July 2, the House approved HB 1379, legislation providing $42.9 million in funding to five University programs (Veterinary School, Medical School, Cardiovascular Studies, Dental Clinics and University Museum). This bill provides funding for FY 2003-04 at the level recommended by Governor Rendell in his budget proposal--a 5% cut overall. HB 1379 is now under consideration by the Senate, which will likely not take up consideration of this bill, and all other college and university funding, until such time as the Legislative leadership and the Administration come to an overall agreement on the state's budget. At this point decisions will be made about funding for higher education.

Negotiators continue to work on finalizing the Commonwealth's General Fund budget, including the possible restoration of cuts included in the "bare-bones" state budget approved in March. One of the major areas of cuts affecting Penn Medicine is the complete elimination of various Medical Assistance programs, which provide vital funding to Penn's hospitals to support patient care to the needy. These programs include the Community Access Fund, Medical Assistance medical education payments, and outpatient disproportionate share payments. Penn Medicine's three urban hospitals would suffer a $13.9 million annual funding cut from the elimination of these programs.

Final resolution of the Commonwealth budget for FY 2003-04, including Penn's non-preferred appropriation and possible restoration of Medical Assistance cuts, will likely not occur before the end of July, if not later.

Medical Liability Reform

At the state level, the provider community has been advocating for reform of the medical liability system in Pennsylvania for years and has been successful in passing some limited reform measures.  As the crisis continues, the costs and availability of coverage have become especially acute over the past eighteen months. The provider community in Pennsylvania remains united in seeking two critical steps: short-term financial relief to physicians and hospitals as they must pay ever-increasing premiums for coverage and for the state-mandated MCARE Fund; and long-term reform most importantly in the form of reasonable caps on non-economic damages.

On June 9, Governor Rendell revealed a $600 million plan to cut malpractice insurance costs for physicians. The Governor's plan would boost state Medical Assistance payments to obstetricians and hospital trauma centers, provide subsidies for MCARE Fund surcharges paid by high-risk specialties, limit attorneys fees, and give judges new power to reduce multi-million dollar jury verdicts that they believe are not justified. The Governor did not identify any funding sources for the subsidies and, most critical, his plan does not include a cap on non-economic damages in malpractice lawsuits.  

The proposal would require the approval of two other branches of government to become law. Some segments would require votes in the legislature while others, including the cap on attorney's fees, would require rule changes by the Supreme Court. The initiative alone will cost the Commonwealth $200 million a year from 2003 to 2005. After the insurance abatements in 2005, the Governor said the state would look at how much malpractice insurance rates have dropped and either phase out MCARE or keep it if rates have not fallen enough.

These developments came on the heals of the release of a Pew Foundation report concerning the causes and potential consequences of the state's medical liability crisis. The authors suggest that state policymakers consider strategies including conventional tort and insurance reforms, but also explore other remedies including non-judicial venue for handling malpractice cases. The Report does not take a position on capping non-economic damages. Importantly, the Report concludes that it will be very difficult to reduce medical liability costs in the short-term and that subsidies to physicians and other providers (especially for the MCARE surcharge) are necessary to enable providers to access coverage in a hard insurance market.

City and Community Relations

Philadelphia Municipal Elections

This year is a Municipal Election Year in the City of Philadelphia. Voters will elect candidates for the following seats in November: Mayor, City Council members, City Commissioners, Clerk of Quarter Sessions, Register of Wills, Sheriff, and Trial Judges in the Court of Common Pleas, Municipal Court, and Traffic Court.

Voter turn-out was light in the Primary Election that took place on Tuesday, May 20. All ten incumbents holding district Council seats won their party nominations to run for another term. Only Democrats Rick Mariano (7th) and Donna Reed Miller (8th) faced serious challenges, and both prevailed. Third District Councilwoman Jannie L. Blackwell ran unopposed. Five of the six living incumbent at-large Council members won nominations to run for re-election in the fall. The most notable change that resulted from the election was the ouster of 19-year Councilman Angel Ortiz and the nomination of candidate Juan F. Ramos. Incumbent Councilman at-large Frank Rizzo was the top vote-getter on the Republican ballot; candidate Jack Kelly led the other four Republican nominees running to fill the empty minority at-large seat vacated by the late W. Thacher Longstreth.

Mayor John F. Street and Republican challenger Sam Katz had no opponents for their party nominations. This fall, they will reprise their 1999 contest, which John Street won by approximately 9,000 votes, a narrow 1% margin. Polls and press reports indicate that the race is competitive, with even fundraising on both sides. Analysts predict a close race that will depend heavily on factors such as swing votes, voter turnout, and race.

Civic Center Resolution

The Office of City and Community Relations worked in conjunction with the School of Medicine and the Department of Facilities and Real Estate Services to obtain the approval of City Council for the conveyance of two former Civic Center parcels to the University for redevelopment. Pursuant to the bill passed in 1998 authorizing the sale of the property to the University and Children's Hospital of Philadelphia, Council reserved the right of approval of the final transfer of the property from PAID to the institutions. This approval process took the form of a resolution sponsored by Councilwoman Blackwell that passed on Thursday, June 12.

Center for Community Partnerships

The Center for Community Partnerships, the West Philadelphia Partnership, and the School District of Philadelphia-West Region were awarded the inaugural William T. Grant Foundation Youth Development Prize sponsored in collaboration with the National Academy of Sciences' Board on Children, Youth and Families for their "University-Assisted Community School Program." The award was announced at a gala dinner at the NAS on March 25, 2003. NAS reviewed nearly 270 applications.

The Prize carries a $100,000 award with the goal of "recognizing high-quality, evidence-based collaborative efforts that generate significant advances in knowledge while increasing the opportunities for young people to move successfully through adolescence with ample support and care. "

The NAS award announcement is available at www.nas.edu/ and the WT Grant Foundation announcement is available at www.wtgrantfoundation.org/.

--Carol R. Scheman, Vice President,
Government, Community and Public Affairs