Center for Studying Health System Change

Syracuse Confronts Rising Health Care Costs; Hospital Competition Grows

Crouse Hospital Attempts to Regain Market Share After Emerging from Bankruptcy

News Release
Oct. 27, 2005

FURTHER INFORMATION, CONTACT:
Alwyn Cassil (202) 264-3484 or acassil@hschange.org

WASHINGTON, DC—Competition among Syracuse’s four hospitals has intensified as Crouse Hospital—the area’s largest-strives to regain market share lost during a bankruptcy reorganization, according to a new Community Report released today by the Center for Studying Health System Change (HSC).

At the same time, the pace of development of new physician-owned ambulatory and diagnostic facilities and acquisition of diagnostic equipment has slowed, but increased utilization and higher provider payment rates have contributed to rising health care costs. Health insurance premium increases were in double digits for a fifth straight year, continuing to strain a local economy slowly recovering from the recession.

"As health insurance premiums continue to grow at double-digit rates, several new community-wide efforts have been launched in an attempt to address long-term health care cost concerns, but it’s unclear whether these efforts will succeed," said Paul B. Ginsburg, Ph.D., president of HSC, a nonpartisan policy research organization funded principally by The Robert Wood Johnson Foundation.

Other key findings of the report, Syracuse Faces Rising Health Costs; Hospital Competition Grows, which is available here, include:

• Price competition sparked by HealthNow’s entry into an insurance market dominated by Excellus BlueCross BlueShield was short-lived, with HealthNow essentially withdrawing from the Syracuse market after a change in leadership at its parent company, Blue Cross Blue Shield of Western New York.
• New information technology initiatives face challenges in a market slow to embrace electronic medical records.
• Public insurance programs remain stable, but the local safety net is strained with declining capacity and increasing demand from uninsured people.

Syracuse is one of 12 communities across the country tracked intensively by HSC researchers through site visits. The new report is based on a June 2005 site visit and interviews with more than 65 Syracuse health care leaders, representing health plans, employers, hospitals, physicians and policy makers.

The Center for Studying Health System Change is a nonpartisan policy research organization committed to providing objective and timely research on the nation’s changing health system to help inform policy makers and contribute to better health care policy. HSC, based in Washington, D.C., is funded principally by The Robert Wood Johnson Foundation and is affiliated with Mathematica Policy Research, Inc.