Cost-Effective Health Care: The Rochester Experience

Prologue: As the pursuit of health care reform has accelerated, policymakers have become fascinated with the record of Rochester, New York, in moderating the growth of its health care expenditures and providing broader access to services than is the case nationally. No single feature of Rochester' s health care system is responsible for the community's performance, but as authors William Hall and Paul Griner document, many forces have been at work to achieve this level of success. These forces include a long history of community-based health planning, with strong private corporate involvement, which helped to limit the expansion of hospital capacity and to control the diffusion of expensive medical technology. Another important feature has been the role of Rochester Blue Cross and Blue Shield, which insures more than 70 percent of area residents. Became of the commanding market position of the Blues, community rating —basing premiums on the experience of the entire community rather than the demographic characterics or health status of smaller groups of enrollees —has been maintained, and that has kept the cost of care affordable for more people. Hall is a professor of medicine at the University of Rochester School of Medicine and Dentistry. His chief professional interests are in continuing medical education, the use of automated information management technology, and geriatrics. Griner is Samuel E. Durand Professor of Medicine there and is chief executive officer of Strong Memorial Hospital, a 715-bed teaching institution. Griner, president of the American College of Physicians, is perhaps best known for his long-standing efforts to educate physicians to develop more cost-effective ways to diagnose illness and manage patients. Abstract: Rochester, New York, has been cited repeatedly for having achieved one of the most cost-effective and efficient health care systems in the country. The determinants of the success of this system include a long history of comprehensive health planning; innovative hospital reimbursement programs; community-rated health insurance; and high levels of mutual cooperation among business, insurers, hospitals, and physicians. The Rochester system promotes the goals of access, quality, affordability, and provider satisfaction through a balanced approach to regulation and competition.