Center for Studying Health System Change

The Seattle area includes three counties (King, Snohomish and Island) on the east side of Puget Sound in the state of Washington. More than two million people live within these three counties’ 4,425 square miles, but the vast majority resides between Everett (30 miles north of Seattle) and the suburbs south of Seattle. Puget Sound forms a natural geographic boundary to the west. The eastern reaches of King and Snohomish counties are rural and mountainous; rural islands in Puget Sound make up Island County. Seventy-three percent of the population lives in King County, 24 percent in Snohomish County and 3 percent in Island County.

The local population tends to be younger, more educated, less ethnically diverse and financially better off than the nation as a whole. The proportion of persons who are white is 13 percent higher than the national average, and the proportion who are Asian is 2.5 times higher than the national average.² The per capita income is 26 percent higher than the national per capita income and the percentage of families living in poverty (10 percent) is half that of the national average. Unemployment is lower than the national rate and is declining from a high point reached in 1992. Respondents report that less than 10 percent of the population has no health insurance.

Health status is generally better in Seattle than in the rest of the nation. The Seattle area has lower mortality rates among infants and the general population than the rest of the nation. Age-adjusted mortality is 20 percent lower than the national average. For example, mortality attributed to cancer and ischemic heart disease is 5 percent and 34 percent lower, respectively, than the national average.³ Infant mortality is 21 percent lower than the national average (12 percent lower among whites and 33 percent lower among non-whites).

Given these positive health indicators, it is not surprising that Seattle historically has had low hospital utilization. Currently, Seattle has 20 percent fewer hospital admissions and 38 percent fewer days of care per 1,000 population than the respective national averages. Despite the fact that Seattle is a regional center for medical care, it has almost 40 percent fewer short-term hospital beds per 1,000 population than the national average.⁴ On the other hand, the supply of physicians per 1,000 population in Seattle exceeds the national average by 24 percent (including 28 percent more primary care and 22 percent more specialty care providers).⁵

THE HEALTH CARE MARKET

The Seattle health service market is defined in part along geographic lines, with the central core in Seattle and suburban and rural sub-markets to the southeast (Puyallup, Renton), east (Kirkland, Bellevue) and north (Everett). Seattle’s tertiary care centers and Level 1 trauma center draw from Tacoma, just to the south, and several health systems based in Seattle also operate in Tacoma.

Seattle’s hospitals are generally differentiated between the downtown tertiary centers, which are referred to locally as Pill Hill, and a suburban ring of community hospitals. These downtown hospitals enjoy a reputation for high quality, and each has established specific areas of expertise. Suburban residents tend to prefer Seattle’s downtown hospitals for tertiary services, particularly cardiac care and neonatal intensive care services, even when such services are available in local, community hospital settings. Generally, suburban hospitals compete in uncontested geographic niches, although some community hospitals are said to operate on relatively low margins because of excess capacity.

Physician practices are dispersed throughout the market, but many respondents feel there is an oversupply of physicians in the population centers and an undersupply in the rural and remote regions of the three counties. Many of the area’s physicians and nurses are trained locally at the University of Washington, which boasts nationally regarded research and training programs.

The market for health insurance has recently expanded beyond Seattle and the eastern Puget Sound area. Several insurers and health plans have launched statewide or multistate strategies with the expectation of increasing market share from expanded statewide public purchasing (for the Basic Health Plan, Medicaid and public employees). These insurers also anticipated that large, regional private employers would prefer to contract with a few large plans rather than with multiple plans of limited geographic scope.

LEADERSHIP AND DECISION MAKING

Many informants spoke of the reputed "healthier lifestyle" of Seattle residents, historically low health care costs and the low number of uninsured persons. They also expressed a generally low level of concern about health problems and health services in Seattle. There is relatively little consistent and organized community-wide advocacy on health issues for indigents or other consumers. Activity around health issues may have reached an all-time high during consideration of the Health Services Act, but that energy reportedly has waned since the law’s demise. Other community concerns, such as the need for a cost-effective mass transit system or conflicts between environmental preservation and economic growth, appear to take precedence in the minds of local business and political leaders.

Seattle businesses -- including health care institutions -- have a reputation for collaboration around civic interests. For example, researchers at the University of Washington have convened meetings that include business, provider representatives, health plans, political leaders and others to discuss and develop strategies for addressing Seattle’s teen pregnancy problems. Local mission-oriented providers are active in upholding community health interests. Sisters of Providence, a Catholic-owned health system active in Seattle for 140 years; Seattle’s eight community health centers; the King County Health Department; Group Health Cooperative; and various University of Washington researchers and medical system leaders have met together routinely to discuss health-related concerns.

Political activity on health issues generally is played out at the state level, rather than locally. For example, the energy behind regulation of insurers and HMOs has come from the state insurance commissioner. Health reform activities for the uninsured and underinsured were directed at the state level as well. The business lobbies, such as the Association for Washington Business and the Health Care Purchasers Association, tend to focus on state legislative activities. They lobbied against the Health Services Act, for example.

Finally, brokers play a leadership role as employers’ primary source of information about the quality and direction of health plans and providers. These brokers review qualitative and quantitative aspects of the delivery and insurance systems. The scope of their reviews includes not only patient care but administrative and managerial quality. Brokers’ reviews weigh significantly in employers’ health care decisions. For example, a broker’s leadership was influential in determining the nature of Boeing’s benefit options.