Center for Studying Health System Change

his case study focuses on the Boston metropolitan area, as defined by six counties: Bristol, Essex, Middlesex, Norfolk, Plymouth and Suffolk.¹ The population of the Boston metropolitan area is similar to that of the nation as a whole in terms of age distribution, but there is less ethnic diversity. Nearly 90 percent of the Boston metropolitan area is Caucasian, compared with 75 percent for the United States as a whole. The median income is $25,874, compared with $20,789 for the United States.²

The Boston metropolitan area compares favorably with the nation as a whole along many health status indicators. Overall age-adjusted mortality rates are comparable to national averages. The age-adjusted mortality rate for cancer is 5 percent above the national average, and the rate for ischemic heart disease is 12 percent below the national average.³ Infant mortality rates are well below national average for both the non-white and white populations (42 percent and 19 percent below U.S. averages, respectively).⁴

THE HEALTH CARE MARKET

Compared with other geographic areas, the Boston metropolitan area has an abundance of health care resources. While the number of hospital beds per 1,000 population is slightly higher than the U.S. average, the Boston area has 45 percent more physicians per 1,000 people than the national norm (29 percent more primary care physicians and 58 percent more specialists).⁵

In recent years, the markets for health insurance products and health services have undergone significant geographic expansion, with a consequent blurring of geographic lines that have traditionally demarcated various sub-markets. Historically, the market for health insurance products has been defined by state boundaries, but most leading health plans now serve multiple New England states and are pursuing a strategy of steady regional expansion.

Similarly, the market for health services traditionally has consisted of two segments:

• a core of highly specialized providers in the urban center (i.e., academic medical centers and physician specialists organized in faculty practice plans) that concentrate on providing tertiary-level and some secondary-level services to local, national and even international markets, as well as some primary and secondary services for city residents; and

• various sub-markets in suburban areas that typically consist of community hospitals and affiliated primary care providers (either from private small-group practice settings or, in a few submarkets, multispecialty group practices).

During the last few years, at least two systems in the city of Boston launched by academic medical centers have aggressively pursued a strategy of building broad-based physician and hospital networks capable of providing comprehensive services to most or all of the Boston metropolitan area. In addition, a multispecialty group practice, Lahey Hitchcock, is developing a regional provider network that extends into the Boston metropolitan area.

LEADERSHIP AND DECISION MAKING

Many respondents expressed the view that factions of providers and health plans orchestrate health system change, while private purchasers, consumer advocacy groups and the public sector influence but do not drive the overall course of change. Many noted the strong leadership of the major academic medical centers (AMCs) and the significant influence they wield over government and business. Health plans also were viewed as influential in leading the transition from indemnity to managed care insurance products, and, in doing so, assuming a great deal of control over the allocation of the community’s pool of health care dollars.

Virtually all respondents viewed the Boston health care system as very high-quality. Many expressed a strong commitment to protecting the market’s local institutions and preserving its not-for-profit character.

The Boston community also has a history of providing health care access to the poor and the uninsured. There are a number of well-defined, politically organized neighborhoods (e.g., Jamaica Plain, Codman Square and Roxbury) that serve as catchment areas for community health centers and exert some degree of influence over public and private health care decisions. Although attempts to provide universal insurance coverage have been unsuccessful, there have been continued incremental expansions in Medicaid eligibility. In addition, the state’s uncompensated care pool has represented a major source of revenue for the many community health centers, and Boston City Hospital and Cambridge Hospital, which serve a disproportionate share of the uninsured and underinsured.

The respected leaders in the business community, organized consumer advocacy groups and the public sector are not viewed as potent change forces at this time. Because of the inherent conflicts of trying to contain health care expenditures in a community whose local economy and labor force depend heavily on the health care sector, purchasers have adopted a cautious approach. Consumer advocacy groups, such as Health Care For All, have been effective in their past efforts to expand health care coverage to the uninsured, but some of these more expansive public sector initiatives have been rolled back. In addition, the current Republican governor is less receptive to broadening the public sector’s role.