Analyzes the Rochester, New York, Hospital Experimental Payment program (HEP) of the 1980s and its aftermath, emphasizing the importance of local and state communities to health-care decision making and legislation.

During the 1992 presidential campaign, candidate William J. Clinton praised Rochester's hospital experimental payment (HEP) program for containing costs and providing access to high quality health care. "If Rochester, New York, can do it with two-thirds of the cost of the rest of us," Clinton asserted, "America can do it too." This book is a detailed case study of a community that devised and implemented a unique, successful, and celebrated hospital cost containment experiment in the 1980s. Author Sarah Liebschutz describes the economic and social culture of Rochester dating to the early part of the twentieth century that provided the fertile soil for regional health planning and the HEP program. This study also examines how the changing economy ultimately stimulated robust competition among health care insurers and providers.
What does Rochester's experience tell us about the role communities play inorganizing and financing health care? The national government has long played -- and will continue to play -- a central role in determining health policy, funding health insurance, and reimbursing health care providers. The responsibility for dealing with the interlocking issues of access, quality, and costs, however, is not exclusively national. State governments shape the health system as they legislate, regulate, and finance such key components of health care as insurance coverage, quality of care, and hospitals and other providers.
Communities matter because they organize and deliver health care at the ground level, through physicians, nurses, and other health care professionals, in both independent and hospital-affiliated settings. They matter because they ultimately determine whether health care in America is available, efficient, and effective.
The book draws heavily on files of the Rochester Area Hospitals Corporation, made available specifically to the author, and on extensive interviews with business leaders, hospital trustees, and administrators whose decisions fostered collaboration and then competition.

Sarah F. Liebschutz is Distinguished Service Professor Emerita at the State University of New York, College at Brockport.