Health reform is the big game for Philadelphia's life-sciences sector

With the Senate Finance Committee approving a health-care reform bill, all the notions and what-ifs will start to crystallize into actual do’s and don’t’s.

We all have a keen interest in having the best health care we can afford. It’s appalling that the United States can spend more than $2.2 trillion a year on health care but not have the world’s best system.

But as difficult as it has been for the House and Senate to get to this point, now the truly difficult negotiating begins.

The arm-twisting may be going on in Washington, D.C., but you better believe that the pain that must come with any changes will be keenly felt in our region.

After all, our economic development gurus proudly tout Philadelphia’s life-science cluster that has grown phenomenally and provided lots of high-paying jobs.

A report issued by the Milken Institute in May said that one in six jobs and 15 percent of all economic activity in the Greater Philadelphia area could be attributed to life sciences. The Milken economists calculated that health care is responsible for 380,000 jobs here.

When something has grown so steadily for so long into something so huge, it’s time to worry about when the music is going to stop, even if the band in Washington is still trying to decide which tune to play.

All the players that could be affected by health reform have put on their brave faces and offered encouragement and campaign contributions. They have to.

What I can’t figure out yet is which part of the sector will lose more in the name of reform.

Will it be the health insurance industry? The Big Three locally - Independence Blue Cross, Aetna and Cigna - have a total of more than 12,000 employees here.

Or Big Pharma? Collectively, Merck & Co., Johnson & Johnson, Wyeth, GlaxoSmithKline and AstraZeneca had more than 31,000 employees locally as of last summer.

Maybe it will be the gravity-defying, ever-expanding hospital sector. Five of the region’s ten biggest employers are hospital systems.

But I am sure of this: For a region so dependent on health care, nothing matters more this fall than how much status quo Washington decides must go.
 

Continue Reading