Summary

Rochester, New York, has succeeded in keeping health care costs lower than costs in other communities without sacrificing its residents' access to care. Health insurance costs per employee in Rochester were 33 percent lower than comparable costs in the nation, and Rochester residents were more likely to have health insurance. Relative to the general U.S. population, people in Rochester seem happier with their health care system and say that they have an easier time obtaining care. Recently, only five percent of Rochester residents--compared with 13 percent nationally--said that they had gone without needed care in the last year. These results are due to the interaction of several factors, beginning with a long history of community-based health planning. Local initiatives have limited the expansion of hospital capacity, controlled the diffusion of medical technology, and maintained the practice of community rating of health insurance. All of these efforts have benefited from the active support of Rochester's employers, who have worked with insurers, health providers, and government to control health care costs and improve access to care. The Rochester experience provides important insights for other communities trying to gain control over rising health care costs and diminished access. It must be noted, however, that Rochester's successes have resulted from decades of effort. Further, many of the problems that Rochester has avoided, such as the excessive growth of hospital beds and the erosion of health insurance coverage, are entrenched elsewhere. It may be more difficult to change practices that people are accustomed to than it is to prevent them from taking hold in the first place.

GAO found that: (1) in 1991, health insurance costs per employee in Rochester were 33 percent lower than national health care costs; (2) Rochester's hospital costs in 1990 were lower than national costs; (3) Rochester residents were more likely to have health insurance coverage than the rest of the nation; (4) between 1989 and 1991, the uninsured accounted for 7.1 percent of the population in Rochester, compared to 13.7 percent in the nation; (5) residents of Rochester expressed greater satisfaction with their health care system than the general U.S. population and indicated that they had less difficulty in obtaining care than residents in other areas; (6) Rochester's health care system is distinguished by the interaction of several factors, primarily a long history of community-based health planning; (7) Rochester's planning initiatives have included limiting the expansion of hospital capacity, implementing an experiment of global budgeting that caps total hospital revenues for several years, and controlling the diffusion of medical technology; and (8) initiatives have benefited from the active support of Rochester's employers, who have worked with insurers, providers, and government representatives to try to control health care costs and improve access to care.