Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: MONDAY, March 29, 1993 TAG: 9303290062
SECTION: NATL/INTL PAGE: A1 EDITION: METRO
SOURCE: Los Angeles Times
DATELINE: ROCHESTER, N.Y. LENGTH: Medium
Unable to work and no longer eligible for health insurance at a group rate, he would have been caught between two impossible alternatives: purchasing a high-priced individual health insurance policy or paying for his expensive therapy and medicine from his own pocket.
But because Ricci lives in Rochester, a community whose 1 million residents pride themselves on having what is perhaps the most accessible and efficient health-care system in the country, he has continued to receive treatment under Blue Cross at the same rate he had been paying before he fell ill.
"I was amazed by it," admitted Ricci, whose intensive therapy has enabled him to recover his speech and motor skills. "I'm lucky I live here in Rochester and not somewhere else. If my insurance had been canceled, I wouldn't have gotten the therapy I needed."
At a time when the nation is struggling to tame an unruly health-care system plagued by increasing costs and millions of uninsured people, Rochester, N.Y., stands out.
Through a cooperative effort, the city's employers, insurers and medical providers were able to create a plan that has become a model for federal policy-makers trying to reform the nation's system.
Here, health-care costs are about one-third less than the national average, and 94 percent of the citizens have health insurance coverage - a figure well above the rest of the nation. All residents may purchase coverage at the same rate, regardless of where they work or their medical history.
Local employers seldom complain about health insurance costs. Hospitals do not compete by acquiring unnecessary technology. Physicians' fees are among the lowest in the nation. And, according to a recent poll, patient satisfaction exceeds the national norm.
Long before such terms as "global budgeting," "community rating" and "managed competition" were discussed at the White House, these new health-care management concepts were being tested and refined in Rochester.
Indeed, this city's system is so exemplary that it has been praised numerous times by President Clinton, and local leaders are regularly invited to give advice to health officials in other parts of the nation.
Of course, as good as the Rochester system is considered to be, it is not without flaws. Experts have observed that by making health care so accessible, Rochester has created a sense of entitlement among patients, inadvertently encouraging them to go to their doctors more often than may be necessary.
In addition, some doctors complain that their pay is too low to maintain a good practice and that insurers sometimes refuse to pay for the best care. Likewise, hospitals often have trouble luring specialists to the area, and they never seem to have enough money for major capital improvements.
"The system isn't perfect, it isn't unflawed," conceded Blue Cross President Howard Berman. "Those who think there is a health-care system out there where everything works perfectly and no one complains is living in another world."
Nevertheless, many of the best elements of the Rochester system are certain to be part of the reform plan the president is scheduled to unveil in May.
Perhaps the central lesson to be learned from the system in Rochester is the value of "community rating," a system in which insurers charge the same rates to everyone who chooses a particular insurance benefits package, regardless of age, occupation or medical history.
Furthermore, while it is standard wisdom among employers that insurance costs are cheaper if non-employees are excluded from their risk pool, in Rochester, where community rating is the norm, employers pay much less than employers around the nation.
Last year, Rochester's employers paid an average of $2,378 to provide health coverage for each employee, compared to an average of $3,573 nationally and $4,366 in New York state.
Rochester's system of community rating allows consumers to move from a group to an individual policy without any increased cost. Likewise, local residents can walk into Blue Cross headquarters at any time and sign up for a policy at the same rate paid by the city's biggest companies.
Rochester's Industrial Management Council, which represents local business leaders, has played a key role in designing and monitoring the local system. In addition, administrators of the city's seven hospitals meet weekly to coordinate their work, sometimes testing the limits of the antitrust laws.
Such community-wide cooperation is at the heart of the managed competition model that the president is expected to use to reform the nation's health-care system.
Working together, several big companies and Blue Cross have engineered the local system - a task that would be much more difficult in a community with many employers and insurers.
by CNB