Center for Studying Health System Change

HEALTH MARKET

The Syracuse metropolitan area is a local, self-contained health market. Health insurance is dominated by local insurers, principally Blue Cross/Blue Shield of Central New York. Most HMOs are also locally owned and operated. Although Syracuse is home to branches of several large national employers that tend to make centralized health care purchasing decisions outside the region, many of these companies offer local HMO options along with their national fee-for-service or managed care plans.

Providers are also highly local. Syracuse’s general hospitals provide tertiary care for the entire region, as well much of the area’s general hospital care, because of their easy accessibility. The strong teaching orientation of several of these institutions, particularly the State University of New York (SUNY) Health Sciences Center and Crouse-Irving Memorial Hospital, contributes to a high concentration of specialist physicians in Onondaga County.

According to one SUNY respondent, 65 percent of SUNY-trained physicians continue practicing in the state after they complete their residencies, most of them in central New York. The supply of physicians in the surrounding three counties is uneven and varies considerably by specialty.¹ As a whole, the Syracuse metropolitan area has 9 percent fewer primary care physicians per capita than the U.S. average and roughly the same proportion of specialists.²

Physician-owned ambulatory care centers, some cosponsored with hospitals, have started to appear in suburban areas north, east and west of Syracuse. The most comprehensive of these include large multispecialty clinics and outpatient surgery, urgent care and lab facilities. This trend seems to indicate a growing dispersal of non-hospital care into major suburban areas.

Outside the suburbs of Syracuse, five community hospitals are attempting to retain their traditional patient base in the face of mounting competition from the Syracuse hospitals. They complain that the Syracuse hospitals are "capturing" patients who are referred for tertiary care and providing subsequent ongoing care that historically was provided by these community hospitals.

Hospitals in Utica and Rochester, which are outside the Syracuse metropolitan area, draw a small portion of residents who need specialty care, and some respondents expressed concern that major tertiary centers in Vermont and Pennsylvania will soon begin competing for specialized care patients as well.

LEADERSHIP AND DECISION MAKING

Community attitudes play an important role in health system leadership and decision making. For example, the Syracuse community takes pride in its hospitals and in local self-sufficiency. These attitudes have bolstered the influence of local hospitals and fostered a collaborative and supportive community environment for them.

Many respondents spoke proudly of high-quality hospitals with state-of-the-art equipment and highly skilled physicians. While opinions varied about the efficiency and cost-effectiveness of locally provided care, most respondents said they viewed the health system as an asset to the region’s economy, not as a cost burden. This belief is reinforced by a long history of cooperation by the hospitals, which are credited with reducing capacity as demand declined in past years. Recent studies, however, indicate a surplus of hospital beds that is likely to increase in the next few years.³

A preference for "solving our own problems" is reflected in pride over the community’s success in reducing infant mortality,⁴ and a distrust of managed care by important local businesses. In addition, the community relies strongly on the local political process to influence state policy, most notably in support of academic medical centers and indigent care. The dominance of a handful of large local enterprises in civic and political decisions, coupled with the fact that a number of large national companies manage their health care purchasing from afar, fosters comfort with longstanding arrangements and a collaborative style of health care decision making in the Syracuse area. Several influential, collaborative decision-making bodies initiate or weigh in on important community-wide health issues.

The Hospital Executive Council (HEC), which includes the leaders of the four Syracuse hospitals and the medical school, has long supported joint planning. The HEC is credited with helping achieve significant local hospital consolidation during the 1950s and 1960s. It also developed an ambulatory care center and nursing home to meet community needs and sponsored a seminal prepaid group practice. More recently, the HEC participated in a com-munity-wide infant mortality initiative and collaborated with the influential Metropolitan Development Association in a study of excess hospital capacity and threats to graduate medical education funding. The HEC is exploring a proposal to consolidate laboratory services for the four Syracuse hospitals and is engaged in a collaborative initiative to develop clinical pathways for high-volume surgical procedures and medical diagnoses. However, some respondents have suggested that increasing competition among the HEC’s member institutions may be eroding its effectiveness.

The Metropolitan Development Association (MDA), which represents Syracuse’s major employers, has also played an important role in shaping health care delivery. As noted, the MDA influenced the HEC’s decision to study hospital capacity and medical education financing this past year. The MDA wields substantial influence in the business community and with state and local governments. Many of its member institutions are well represented on hospital boards.

The Purchasing Coalition of Central New York, which includes representatives of seven companies, emerged more recently. It has focused its efforts on identifying a single health plan to offer its members. Several large local firms, such as Welch Allyn, Inc., Niagara Mohawk and Agway, are among the coalition’s leaders, but it has yet to achieve full support from the business community. Major national employers with substantial local operations (Carrier Corporation and Chrysler, for example) are now being recruited.

In contrast to the community-wide organizations that represent the interests of major health care providers and employers, institutional representation for consumers, vulnerable populations and other community interests is less evident. Most respondents were unable to identify an influential voice for consumers. Organizations that advocate for the poor (i.e., Legal Aid and the Salvation Army) and the elderly (the County Office on Aging) were mentioned occasionally, with the caveat that they were overwhelmed by large caseloads and program responsibilities.

The Community Health Information and Planning Service (CHIPS) is a long-standing organization that supports health planning and offers technical assistance to smaller service providers and not-for-profit community-based organizations. For many years, CHIPS has been the vehicle for community and consumer participation in the state-sanctioned local Health Systems Agency planning process. It also provides a forum for the smaller not-for-profit health and human services organizations typically funded by the United Way. CHIPS’s recent activities have included technical assistance to community service agencies in forming partnerships to cope with managed care; community planning around Medicaid managed care and federal-state block grants; and studies on physician supply and access to care.

Decision making at the community level is influenced by information from providers, in particular the HEC, although it is not clear how broadly providers’ -- or other -- information is disseminated. Few respondents were aware of either the 1996 community health assessment conducted by the Onondaga County Health Department or the studies conducted by CHIPS. A number did refer to the county medical society’s survey of physicians, which ranked HMOs on the basis of service and quality; this received considerable media attention, and was reportedly taken seriously by health plans. Health plans said that they were collecting HEDIS performance data, but few purchasers were aware of its availability, and some media representatives expressed frustration at lack of access to those data. Several purchasers complained about the lack of good data from insurers on cost, quality and utilization of services.