A study finding that the Buffalo region has the fourth-lowest overall Medicare spending rate and is one of six New York communities that ranked among the 30 lowest-cost markets in the country is a bit of good news as the nation’s medical costs continue to rise.
The Rochester area has the lowest overall Medicare spending rate, which health officials have said is a sign of aggressive regional planning that tamps down on unneeded hospital expansions and technology upgrades that are costly to insurers and, ultimately, consumers.
The Institute of Medicine report stated that Rochester’s Medicare spending rate per beneficiary was $174 lower than the national mean among 306 U.S. regions. Buffalo’s Medicare spending rate per beneficiary was $166 lower.
State Health Commissioner Dr. Nirav Shah says the Cuomo administration wants to use Rochester’s success at holding down costs as a model. Shah, who called Rochester’s spending “a phenomenal model,” understands that supply drives demand.
Dr. Martin Lustick, chief corporate medical director for Rochester-based nonprofit insurer Excellus BlueCross BlueShield, said: “Supply-driven use of services is one of the major drivers of unwarranted, wasteful health care expenses.”
The key is to translate Medicare savings into lower regionwide utilization that will lower costs for employers and employees who have to pay for the care. Rochester held down spending by creating a regional advisory committee comprised of various health care stakeholders. The panel reviews the need for new departments, new staffing and expensive pieces of equipment and recommends against those that aren’t needed in a community.
Bruce Boissonnault, president of the Niagara Health Quality Coalition, said his organization has found, based on earlier data, that if it can be shown that Medicare reimbursements are lower in an area where there is regional planning, than private insurance payments are also lower.
In other words, if doctors treat Medicare patients and non-Medicare patients the same, this should mean lower overuse and misuse of tests for everyone in the region.
“The key is to translate better care of Medicare patients into better and more appropriate care for non-Medicare and privately insured patients,” said Boissonnault.
That’s where a regional planning body can make a difference. Buffalo had one, and perhaps it’s time to revisit the matter. In 2006, the Niagara Health Quality Coalition had to close this region’s planning entity because of lack of funding.
Another factor holding down costs here is that we have nonprofit hospitals and health insurance companies. These factors are good for current companies and employees, and could have a positive influence on companies considering a move here.