When Gov. Ed Rendell stopped in Butler last week to talk about his plan to control the growth of health care spending in Pennsylvania, he described a multifaceted approach with the most attention focusing on hospitals and health care providers.

Since hospitals are where most people receive their non-routine health care, it's appropriate that reform measures target reducing hospital costs, especially avoidable costs. Slashing hospital-acquired infections and reducing hospitalizations for chronic conditions represent about half of Rendell's projected annual savings of nearly $10 billion.

No doubt, improved efficiency and increased transparency of expenditures in hospitals is important. But, the same sort of scrutiny should be applied to the health insurance industry operating in this state.

Though it took up only a few minutes of Rendell's health care speech last week, it was welcome news to learn he expects the health insurance industry to play a role in reducing the rapid escalation of health care costs.

Rendell's proposal calls for changing the way insurance companies rate policyholder risk by shifting from demographic ratings to a broader, community rating system. Beyond that, Rendell's plan, like the one proposed by California Gov. Arnold Schwarzenegger, would mandate that insurance companies spend 85 percent of premiums-based revenue on providing patient care. Other spending, such as administrative costs, marketing and political contributions or lobbying, would be limited to 15 percent of income.

Curtailing those costs, which by some estimates can run as high as 30 percent of spending, suggest the insurance industry is not likely to embrace this part of the governor's plan.

Though Rendell's speech did not mention the $2.8 billion surplus reported by Highmark at the end of last year, that massive amount of money, in the eyes of many people, could be better spent reducing the cost of premiums that companies and individuals pay.

If better cost controls and spending transparency are good for hospitals, they also should be good for health insurers.

By pressing for near-universal coverage for Pennsylvanians, Rendell's plan essentially mandates that more people buy health insurance. And this means more business for the major health insurers such as Highmark and UPMC. The spending practices of these hugely profitable "non-profits" should be exposed to public scrutiny, just as the spending and operating practices of hospitals would be under Rendell's plan.

The insurance industry for too long has been ignored as a component in spiraling health care costs. Rendell's plan begins to shift necessary attention to the need for more transparency in this sector of the health care industry.

Rendell's plan properly takes a very broad approach and demands sacrifice, or change, from a wide range of people to achieve dramatic and necessary changes in the health care delivery system in Pennsylvania. It is appropriate that the insurance industry will not be ignored in Rendell's prescription.