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State council to control health care costs faces $1 million deficit

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(The Center Square) — Pennsylvania’s state council to control health care costs is staring down a $1 million deficit within its own budget.

The most significant costs above funding came from contracted services and salaries and benefits for council staff. The Pennsylvania Health Care Cost Containment Council is an independent agency that aims to limit cost increases through competition in the health care market.

In the treasurer’s report presented during the PHC4 meeting on Thursday, the council has a $953,000 budget deficit.

The unfavorable balance, Treasurer Arthur Steinberg noted, was a result of staff pay increases and retirement payouts, pre-paid software contracts, the purchase of IT equipment, and almost $600,000 in contract services.

The large deficit might be an aberration rather than a new normal.

“We had a couple of non-recurring expenses that contributed to the larger number of expenses being incurred this year,” Steinberg said.

He also expected that cash flow “will be enhanced” after the streamlining of some payment and procurement processes. The council collects health care data and publishes it for the public, but also raises revenue by producing “hundreds of customized reports and data sets” for hospitals, researchers, insurers, and others.

Those customized reports bring in significant revenue: the council has $2.3 million in carry-over revenue and more than $800,000 in current revenue, the treasurer’s report noted.

Council members took the deficit in stride, though their requested budget increase was not granted. The council asked for a $3.6 million budget, but will receive the same level funding as last year — almost $3.2 million.

“It doesn’t put us in a — well, let’s say we’re gonna have to adjust our thinking about some different things, but it should not require any significant changes internally,” PHC4 Executive Director Barry Buckingham said.

The lack of an increase might spur other changes. When press agencies have asked to buy some data, the cost has been too high. The council is considering a press pricing to increase revenue.

“We think this is an untapped market, but that we could increase our data sales using a better scale of payments,” Buckingham said.

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