Rochester's widely admired health care system did not occur out of the blue. As the beneficiary of a legacy of collaboration dating from the 1930s, it was “the deliberate product of cooperative crafting by business leaders, local government officials, health providers, health insurers, and health planners.” In the absence of this “unusual history of concerted community-wide efforts to contain costs and improve access in the health care system,” it is inconceivable that the hospital experimental payment program (HEP) could have been devised or implemented, or that it could have succeeded.

Five main institutional players were on the Rochester stage from the 1930s through the HEP years. As large, complex formal organizations, they behaved internally and interacted externally in ways markedly different from those found in other communities. These institutional players were business, especially Eastman Kodak; payers, notably Blue Cross and Blue Shield; hospitals, individually and in integrative bodies; numerous planning entities, especially the Health Systems Agency; and environmental forces, that is, state and federal payers. The influence of each of these complex institutions on health care decisions in Rochester waxed and waned from the 1930s through the 1990s.

Rochester's legacy is discussed in this chapter and the next. Here the distinctive roles of businesses, payer organizations, hospital associations, and planning institutions are highlighted. The power of personalities is also considered in the actions of three key business leaders—George Eastman and Marion Folsom of Eastman Kodak, and Frank Gannett, the newspaper publisher—to make Rochester distinctive. Finally, important state and national government decisions that facilitated comprehensive local and regional planning are discussed. Chapter 4 concentrates on each of the nine Rochester- area hospitals that participated in the experiment.

Rochester: The Setting

Rochester, the third-largest city in New York State, is located in the western part of the state on the southern shore of Lake Ontario. The city “resembles a key as it stretches along both sides of the Genesee River for some twelve miles before the river empties into Lake Ontario.” Monroe County, which contains Rochester, is the central county of the Rochester metropolitan area.