Area physicians will get raises thanks to collaborative triage
Sandra Parker, Scott Ellsworth and Dr. Brad Berk
Guest essayists

Retaining and recruiting the physicians we need to provide the quality of health care we expect has been a pressing issue here for several years. But through open and honest discussions, based on facts and data rather than anecdotes, the stakeholders in local health care have crafted a transparent set of recommendations that begin to address this vital concern.

The issue is complex. Rochester’s hospitals are competing with larger metropolitan areas nationwide for talented physicians, particularly in practice specialties that have national shortages. At the same time, insurers, employers and consumers are trying to balance the affordability of health care in our challenged upstate economy to ensure that as many people as possible continue to have access to medical care. This is all taking place at a time when the local physician work force is aging — just as the aging baby boom generation is demanding and using more health care resources than any group ever before.

There is no simple solution to the complex issues surrounding the use, cost and financing of health care. Fortunately, Rochester’s collaborative tradition on health care issues is alive and renewed, and has led to a shared approach that benefits the entire community. In the process, a potential model for dealing with future challenges has been developed with business leaders, the area’s largest insurer and the largest health care provider coming together to tackle the issue of physician retention and recruitment.

Studies by the Rump Group, the Rochester Business Alliance and the Monroe County Medical Society show that one of the key reasons why physicians leave Rochester is that reimbursement rates here were perceived to be lower than other similarly sized markets. With Medicare and Medicaid not likely to increase fees, physicians have turned to private insurers.

What constitutes an average reimbursement for physicians who work at academic medical centers, in community hospitals or in private practice? How do Rochester’s reimbursement rates compare with those in similar markets?

At the RBA’s request, the University of Rochester Medical Center and Excellus BlueCross BlueShield examined the issue of what is a competitive reimbursement for physicians in this size market. Business leaders provided guidance through a series of pay principles, and a consultant was hired to examine national benchmarks for physician compensation. That study confirms that Rochester does slightly lag behind similar communities in physician reimbursement. The study also showed that physicians in academic medical centers in those communities are often paid a somewhat higher reimbursement rate.

The result is a 3.7 percent increase in physician fees under Excellus BCBS plans that went into effect Jan. 1 to bring physician reimbursement up to national averages. Excellus BlueCross BlueShield will also continue its additional case payments for those “endangered” specialties that are in high demand and short supply. Reimbursement rates will continue to be reviewed against the national average for the next two years to remain competitive.

The reimbursement increase will add $20 million to local health care spending. Paying for it will come from shared accountability among all the stakeholders.

Rather than pass on the additional expense through premiums, Excellus BCBS has reduced its operating margin for its products to just one-half of one percent in 2008. It will also use some of the savings from the new prior authorization program for complex radiological imaging to cover the increase in physician fees.

The UR Medical Center will increase its efforts to reduce hospital-acquired infections and other avoidable complications that drive up costs. It will strongly encourage its physicians to increase the use of generic drugs whenever appropriate. Overhead expenses for physician practices will be reduced by $500,000.

In the spirit of transparency, the RBA is encouraging other payers and health care providers to follow suit.

As the upstate economy continues to evolve, health care is the centerpiece of Rochester’s economic future. A top-notch academic medical center, two vibrant community hospital systems along with financially stable major insurers all make Rochester a healthier place to work, live and raise families. At the heart of this model is our high-quality physician work force.

We have not solved all of our recruitment and retention challenges. National shortages still exist, for example in the number of physicians going into primary care, and there’s always the question of whether average reimbursement is enough. But this is the first step in the right direction and, more importantly, a model collaborative process was developed for tackling future health care challenges.

Parker is president, Rochester Business Alliance; Ellsworth is regional president, Excellus BlueCross BlueShield; Berk is chief executive officer, University of Rochester Medical Center.
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