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Through a series of articles appearing on this page, we've reviewed the important reasons why our nation's health care system needs to change and what's required to make the shift to a more accountable, patient-centered model that achieves improved health, reduced cost and a better patient experience.
Given the announced plans to bring Rochester General Health System and Unity Health System together, it seemed appropriate to devote the fourth and final article to the topic of hospital consolidation-specifically, why it's occurring at an unprecedented rate nationwide and what we believe are the benefits to the Rochester community as RGHS and Unity collaborate to boldly shape the health care system of the future.
The highest level of health care consolidation occurred during 2012, and it is expected to continue, if not accelerate. As you might expect, health care reform and the mandate to increase quality while driving down cost are propelling this rapid consolidation in the marketplace.
The decision to explore a formal partnership between our two health systems is a natural progression of the collaboration and forward-thinking leadership that has defined health care in our area for many years. Dozens of successful partnerships and affiliations already exist across our region and continue to grow.
Today, because of this leadership, residents enjoy highly efficient, in-community care with easy access to a full and integrated continuum of nationally recognized clinical services. In fact, a new Institute of Medicine study reports that the Rochester area has the lowest overall Medicare spending rate in the nation-a feat health officials attribute to aggressive regional planning. The Institute of Medicine report found that Rochester's Medicare spending rate per beneficiary was $174 lower than the national monthly mean among 306 U.S. regions.
Given the profound implications that provider consolidation and increased scale have for creating high-quality, high-value health care delivery networks, it's clear that the right mergers can and do result in great benefits for patients. Mergers also enable providers to drive down costs by building critical mass and creating economies of scale. First and foremost, though, the goal must always be to develop what's best for patients and for the community as a whole.
Health care reform's current imperative for change is another opportunity for Rochester to lead the nation by creating a model health care system that delivers the best care at the most affordable rates and takes accountability for getting and keeping patients healthy. RGHS and Unity are proud to be working together to help make this change a reality.
As one organization, we will be able to build the information technology, primary care physician network and community-based care management resources required to contribute to a healthier community. Cost savings will also be achieved by integrating infrastructure, streamlining costly overhead, achieving scale-based purchasing economies and avoiding planned capital investments made unnecessary by the complementary nature of our two systems. These cost savings will benefit both local employers and their employees who bear the significant burden of these costs through rising health insurance expenses. We are still developing and quantifying our integration plans, but we expect the gains to be substantial.
As large employers ourselves, we understand the need to control costs and provide value while offering employees access to high-quality health care at competitive rates. In fact, since 2010, both RGHS and Unity have implemented comprehensive employee care management programs that have enabled us to lower annual health care spending while at the same time helping our employees to manage their health better. As a result, RGHS and Unity have experienced a significant decline in annual health care spending growth rates, from 8 percent in 2010 to approximately 2 percent in 2013 (compared with national rates of almost 8 percent in 2010 and 6.3 percent in 2013, according to the Milliman Medical Index). We look forward to collaborating with employers throughout the area to help them achieve similar outcomes in the future.
Through this planned consolidation, Unity and RGHS can contribute to a more competitive and innovative health care marketplace in Rochester. We are pleased to work together with local business leaders, federal and state government officials and health insurance providers to achieve our common goal of providing access to the most affordable and best health care in New York and beyond-all to make Rochester a healthier community.
Mark C. Clement is Rochester General Health System president and CEO; Warren Hern is Unity Health System president and CEO. This is the final article in a series examining health care reform.
10/4/13 (c) 2013 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email email@example.com.