OP-ED

Op-Ed: Healthcare Reform Lessons From Mayo Clinic

Mayo_MN_Gonda_3884cp Three goals underscore our nation’s ongoing healthcare reform debate:1) insurance for the uninsured, 2) improved quality, and 3) reduced cost.  Mayo Clinic serves as a model for higher quality healthcare at a lower cost.President Obama, after referencing Mayo Clinic and Cleveland Clinic, advised, “We should learn from their successes and promote the best practices, not the most expensive ones.”

Atul Gawande writes in The New Yorker, “Rochester, Minnesota, where the Mayo Clinic dominates the scene, has fantastically high levels of technological capability and quality, but its Medicare spending is in the lowest fifteen per cent of the country-$6,688 per enrollee in 2006.”Two pivotal lessons from our recent in-depth study of Mayo Clinic demonstrate cost efficiency and clinical effectiveness.

1. Patient-first medicine.  Throughout its 140-year history, Mayo Clinic has never put money first but lives its primary value:  the needs of the patient come first.  Mayo doctors, as all employees, are on salary.  No doctor earns more by ordering an extra test or procedure.  No doctor earns less by referring a patient to another Mayo physician with more expertise.

Core values guide organizational behavior, and Mayo Clinic’s patient-first core value guides the more than 43,000 employees.

For instance, the head of transfusion medicine noticed a day-shift technician working at 2:00 a.m. as he dealt with an emergency.  The technician explained that she was redoing a test to correct an earlier mistake.  “Why not repeat it the next day?” she was asked. She replied, “I can’t have patients at Mayo Clinic waiting an extra day in the hospital because I fouled up a test.”  Dr. Robert Waller, who retired as Mayo Clinic CEO in 1999, remembers a conversation with a cardiologist whose patient needed a pacemaker.

Option A: a Medicare-approved model requiring relatively involved surgery and several days of postoperative hospitalization.  Option B: a new model that could be implanted more simply with only one day of hospitalization.

Option B was not yet Medicare-approved and meant noreimbursement to Mayo.  Dr. Waller recalls:  “This was a no-brainer – use the pacemaker that is best for the patient.”Healthcare is a sacred service.  The patient’s quality of life – and life itself – is at stake.  The needs of the patient must be at the center of healthcare reform. This will require, among other steps, revamping doctors’ compensation to encourage efficient and effective care that truly serves patients.  Until we pay doctors for better care, rather than for more care, we cannot successfully reform healthcare.

2. Team medicine.  Mayo Clinic does not have a monopoly on highly capable doctors and nurses, but it has a competitive advantage because its highly capable clinicians pool their knowledge.  When clinicians truly work together, as at Mayo, the result is more efficiency, less duplication of effort, and a greater likelihood of correctly diagnosing and effectively treating a patient earlier in the process.Medical care in America is highly fragmented, impeding both efficiency and effectiveness.  Patients with multiple or complex illnesses are often treated by physicians from different medical practices who may not communicate with one another.  Not so at Mayo Clinic, which functions like a medical department store with staff experts for each medical specialty.  Working in an organizational culture that demands teamwork and using tools such as an electronic medical record and a sophisticated communication system, Mayo clinicians collaborate to provide the specific expertise needed by the individual patient.Consider the case of “Don,” who endured an undiagnosed tumor on the base of his tongue for two years.  Both his dentist and an ENT physician told him the discomfort in his mouth was not clinically significant.  When another ENT doctor diagnosed cancer and recommended immediate surgery (that would end Don’s ability to speak), Don contacted Mayo Clinic.  Two weeks later he met his Mayo team of three physicians (ENT, medical oncology, and radiation oncology specialists).  The team dismissed surgery and recommended radiation and chemotherapy instead.  Today, five years after Don’s initial cancer diagnosis, he is cancer-free and living a normal life.  He still sees his initial physician team at six-month’s check-ups. Don’s story illustrates Mayo Clinic at its best.  Teamwork is vital to improving medical efficiency and effectiveness, and health reform must include bold investments that encourage and enable it.  Encouraging medical practices, financially and otherwise, to coordinate a patient’s healthcare over time (called “patient-centered medical homes”) should be in the health reform blueprint.  So should the transformation from proprietary paper medical records to universal electronic records available as needed by treating clinicians.

A time to learn.  Few organizations survive for more than 100 years, much less thrive like Mayo Clinic. Mayo Clinic is not perfect.  Its integrated, multispecialty medical model works wonderfully — most of the time.  Stories like Don’s occur each day at Mayo, but the Clinic cannot help every patient.  Nor is Mayo Clinic the only medical institution that merits consideration in healthcare reform discussions.Yet, the way Mayo conducts its business, governs itself, and sustains focus on its core values of patient-first needs and collaborative medicine is deeply instructive.  Never have such lessons been more important to our nation’s healthcare.

Leonard L. Berry and Kent D. Seltman, authors of Management Lessons from Mayo Clinic (McGraw Hill, 2008).  Berry holds the M.B. Zale Chair in Retailing and Marketing Leadership in the Mays Business School, Texas A&M University.  Seltman retired from Mayo Clinic in 2008 after serving as director of marketing from 1992 through 2006.

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45 replies »

  1. We must figure out a way to completely take away the opportunity of corruption! Nothing personal – but “We the People” must always come first and be protected!

  2. I am a huge fan of the Mayo Clinic and have attempted to become a patient. I live in NY but spend 5 months in st augustine. i went to the mayo clinic primary care office and asked if my medical coverage was accepted, fully expecting a positive response. i have empire gov’t from united heath care in new york. at one time what i thought was one of the best coverages out there. i was advised that they were not a participating provider. i was suprised that a highly touted medical center praised for there service and held out as a model for healh care reform would not take one of the largest plans covering all police and fire ret.civil servants from ny. i’m sure there’s thousands like me that are interested to have all there medical needs,in my case a cardiac dr, urologist, hematologist as well as dermatologist. i’d like to know why these plans aren’t covered. please advise if changes are contempalted.—glenn

  3. It seems like the Mayo clinic has taught us a lot of lessons over the years. I think we can all take something good from this.

  4. President Obama, we are tired of the Whitehouse trying to sell us health care reform. You know, I know and the American people know this is really about more government power and control. Our biggest problem has become our government! Stop! Just stop all this nonsense! Do not treat U.S. like we are stupid, ignorant morons! Join U.S.!
    Do Not Sell Out “We the People” of the U.S.A.! We Trusted You!
    President Obama, great Presidents do Great things! They have great Honor and Integrity! We know you can do it! “We the People” know the truth! We want to hear it from you! Please join U.S.! Tell the American people the Truth! Confess! Americans are forgiving! We feel if this took place, a renewed Spirit of Patriotism could spread through our government! The American people have never lost our Spirit of Patriotism! We never will! Join U.S.!
    “Few men have virtue to withstand the highest bidder.” –George Washington
    President Obama, You owe nothing to the manipulators who bought your way into office. Those people only used you! Americans do not want to use you. People have been using you and lying to you all your life.
    You Have to Betray Them or Betray the U.S.A.! What’s Your Choice?
    Look at the people of the United States. We are real! We are good people! We are intelligent and can think! The elitist mind is really small and weak! The elitist people are selfish and twisted. We just want a President with Honor and Integrity. This is your big chance to become the Greatest President of all time! You need to lead our government by example, with Honor and Integrity! President Obama just do the right thing!
    Join “We the People” of the U.S.A.!
    “Experience has shown that even under the best forms of government those entrusted with power have, in time, and by slow operations, perverted it into tyranny.” -Thomas Jefferson
    President Obama:
    Can you stand on your own?
    Can you make your own decisions?
    Can you be a man of Honor and Integrity?
    If we have any other elected or appointed “public servant” leaders in our government who have any Honor or Integrity left inside them, they should come totally clean with “We the People”! If most of our leaders have any intestinal fortitude, then we should have a long line of them holding resignation papers in their hands or begging to ask our forgiveness! Do they no longer think they are accountable to U.S. and believe they can do whatever they please? They have developed a “spirit of insubordination” that has gotten way out of control! We no longer need employees working for us that practice malfeasance in office.
    We need laws stating that any Representative, Senator or President that has the audacity to sign any bill without reading it and fully understanding it should go immediately to jail without any bond? We must raise the bar of Integrity and Honor for our employees! Elected or appointed “public servants” need to achieve a much higher standard. How did it get so low? If they are found guilty, a 30 year minimum sentences would not be out of line! This complete lack of responsibility is a very serious issue! It’s totally scandalous, outrages and just plain wrong! It’s Criminal!
    We Must Never Again Allow Our Leaders to Have Unaccountable Trust! EVER!!!
    People are corruptible! We must always question and watch very closely everything they do! Our Freedom, Our beloved Constitution, Our National Sovereignty, “We the People” and the fact that we are a Constitutional Republic is why the United States of America is the Greatest Nation in the World! Any bad truths about our Country are the slow results of the corruptible human nature of a few individuals! Power and wealth can corrupt a person if not kept in check! After we fix our current problems, and we will, we must put in play many more “checks and balances”. We must figure out a way to completely take away the opportunity of corruption! Nothing personal – but “We the People” must always come first and be protected!
    http://www.tomdavidd.com/blog/
    “We can all commiserate forever about how bad things have been, are, and will continue to be. But I don’t think that we can afford to wait for elections in order to have our say about putting a stop to this madness. Enough, already! Let’s start talking treason, prison, and death penalties for all malefactors in government who subvert, ignore, skirt and otherwise trash the Constitution of these United States of America. Those who have sworn to uphold the Constitution and have then ignored their oaths of office are guilty of perjury and malfeasance in office.” -Stephen A. Langford (personal communication to this author)

  5. Mayo treated my disabled daughter in Scottsdale, AZ. She is on medicare and medicaid. Her condition was complex. Her care was excellent and without it, she would have certainly lost her life, if not the quality of her life. There was not one question about how much Mayo would receive for her care.
    The bottom line is, in my most humble opinion, what if the great equalizer, illness, strikes your loved one? How do you want your loved one treated?
    With this in mind, we must work together to discover what works and carefully, thoughtfully apply it to all citizens. Furthermore, the current proposed legislation will not be effective. It will ultimately leave even more people out. However, the best of minds must and can prevail. We must insist on our legislators working together with organizations like Mayo to seek solutions.

  6. “When did the system get so upside down that a physician who used to be an average citizen holding a job like his fellow countrymen get elevated to million dollar salaries?”
    HA! Try a 250 thousand dollar… 14 year education rewarded with an 80 to 120 grand per year “salary” left over after paying all the usual expenses (not including student loans). That’s what most Doctors face. Keep in mind that the physician fee schedule has gotten cut every year since the 1970s. Surgeries that used to pay 2 grand, now pay about 500 dollars and include 3 months of care afterwards as a freebie. Yet health care costs rise? Doctor’s fault?

  7. The Mayo clinic primarily treats patients with the mental and financial resources to fly to Rochester. They don’t have to deal with patients pulled out of dumpsters who stagger from one E.R. to the next with the same pain and no useful memory.
    Whether miracle cure is realized or not, afer the razzle dazzle, Mayo just ships ’em back to poor community slob doctor to fish through the 100s of pages of tests and XRAYs and try to figure out what they were thinking and why it took 50 new tests to come to the same conclusion.
    Cleveland Clinic hid the emergency room sign for years, until they were essentially sued by the community. The doctors are salaried – true – but also enjoy endowments, massively inflated surgical re-imbursement from VIP princes from around the world and other “goodies” that just don’t apply to equally talented, but, less visible community surgeons.
    Not to mention the “bulletproof lawsuit sheild” one enjoys by being part of a big name institution with on staff bulldog lawyers to keep the ambulance chasers away.
    These “superstar” places have their strengths in researching new technology, training new doctors etc…, but don’t represent a model that can be applied on a larger scale… since… in reality these places are propped up the community hospitals that feed them.
    By the way, these places are also famous for inventing the massive battery of tests that has now defined what every American expects when they don’t feel well. They invented the huge unecessary work-up and our citizens made it the standard.

  8. My husband was at Mayo last summer for 2 1/2 months. His bill came in at a little less than $1,000,000. They’re trying to protect costs? Who are they kidding? They promote themselves in various ways, supplying PR information about what they supposedly do. People believe their PR because of their name.

  9. The Mayo and Cleveland Clinics are valuable not as role models or poster children for what the national health care system should look like, but rather because we need places where we can credibly assess what works and what doesn’t and evaluate new and emergent technologies and procedures. They are the thought leaders of the field, but I wouldn’t design a national system to mirror them. The much better model is to leverage them and apply what works to the rest of the system.
    At the same time, the focus and financial incentives of the US health care system need to shift from treating sick people to helping people maintain and improve their health. We can’t even measure that today, much less distribute health care reimbursement dollars using how well doctors accomplish this as the allocation mechanism.

  10. I do not understand the Mayo Way, i.e. health first $$$ last. I wanted desperately to go to Mayo in Rochester for my heart but my insurance carrier would not cover any of the Mayo’s. Cleveland Clinic, John Hopkins, Mass General, Emory, Duke, etc. etc.etc. but no Mayo. Mayo had the doctor I wanted to see. I was also told by a Mayo doctor that Mayo is very expensive if your insurance does not cover them. 2 and 2 do not add up here.

  11. Ranae, your outcry is from the 20% who become seriously ill — mine is from the 80% who don’t, whether or not they manage to remain employed.
    t

  12. “Docs don’t make a million a year, but they have to make something for the risk. In 2009 dollars that is going to be close to half a million. If you pile on all those taxes, it will be 3/4 mill.”
    MD as HELL – Are you talking before or after practice expenses, which, as I understand it, average about half of revenue collected?

  13. The problems for the people with ailments and no coverage due to change in employment is that they were never the policy owner. The alternative compensation in the form of benefits is contructed badly; people should own the policy and be able to keep it with no increase in premium for change in condition or employment status. I believe that was the intent of HIPAA, which was hijacked into an AIDS privacy bill. The policy should be owned by the individual, regardless of who pays the premium.
    As for peiple like the lady above, this is what Medicare disability was supposed to cover. But just try getting on it if you belong to the wrong ethnic group.
    The next fix from the federales will do no better, because it will not be accepted by most doctors. Docs don’t make a million a year, but they have to make something for the risk. In 2009 dollars that is going to be close to half a million. If you pile on all those taxes, it will be 3/4 mill.

  14. doc4converse – I have to agree with you in your statement, “I believe it was when Medicare and Medicaid was instituted by the GOVERNMENT with no regulation to keep costs down, as well as other factors, but Medicare and Medicaid was one main factor of doctors and hospitals being paid well.”
    I would add to this that when employers picked up insurance costs as a “benefit” for their employees, all of a sudden the general public did not care what the premium was because they did not pay for it and if a new patient visit and labwork cost $350.00, they only had to pay their $15.00 copay. Yes, there should have been some social responsibility on the part of the public and they should have guarded the “insurance” money as they would have if it were their own. That said, some doctors also used it as carte Blanche to order any and everything .. I worked with them and I know first hand of many who ordered the exact same tests not based on symptoms. In addition, when the HMO was brought in where they were paid $X.XX dollars per month per patient, that battery of tests were not ordered.
    While I’m not sure of the entire answer, I can tell you that I have been insured most of my life. I have lost 140 lbs on my own and both my insurance company and I split the cost of the panniculectomy with muscle tightening with me paying for the plastic component and my % of the coinsurance.
    I am now unemployed, have been quite ill with four abscesses misdiagnosed 3 times (scar tissue, lipoma, MRSA) and then, through persistence, have received a definitive diagnosis of nocardiosis. To date this has cost $15,000+. I am willing to go into debt and pay a fair amount for this care but how, pray tell, is an unemployed person to protect themselves ?????
    My brother in law has had coronary artery bypass surgery and broke his back through a work injury. My sister has macular degeneration. They are willing to pay for insurance but the only insurance offered to him is $800.00 with riders against heart and back and my sister is uninsurable with the shots to save her eyesight at $800.00 an injection. What are they to do?
    I will also concede that not all physicians make a million dollars a year .. but 9 that I know did.
    I respectfully disagree with Tom Leith in his assessment of the general public’s outcry. Take a look at these real life instances of those of us who have been working, paying taxes, buying insurance and through no fault can no longer do so. We can’t seem to afford health care in this country; something has to be done.
    Most respectfully,
    Ranae

  15. Yes Bev, MD as HELL absolutely is right. And while we’re acknowledging this we should acknowledge that Nate the TPA guy is right as well. Matthew is right. Brian Klepper is right. Maggie Mahar is right. Michael Millenson is right. Robert Laszewski is right. Even Newt Gingrich is right. It seems to me the main problem in this arena is that everyone is right. Except the lawyers. Well, OK, they’re right about 10% of the time too.
    Repeating myself from three years ago, the only thing I really hear coming from the general public goes something like:
    – I want to get whatever I want from whomever I want.
    – I don’t want to pay for it.
    – I don’t even want to think about it, but
    – I want to sue somebody when I am dissatisfied with it.
    – I want Congress to make it happen, but
    – I don’t want Socialized Medicine, whatever it means.
    – I am therefore discontented with the current state
    … and with anything else I have heard about so far.
    This right here is what has to change.
    t

  16. “When did the system get so upside down that a physician who used to be an average citizen holding a job like his fellow countrymen get elevated to million dollar salaries?”
    I believe it was when Medicare and Medicaid was instituted by the GOVERNMENT with no regulation to keep costs down, as well as other factors, but Medicare and Medicaid was one main factor of doctors and hospitals being paid well.
    Even though doctors and hospitals are not unions, there were laws made that state only doctors can prescribe (which is slowly changing) and do surgery, and similar laws protecting and supporting hospitals…all in the name of protecting the consumer.
    And unlike your orthopedic friend, the majority of doctors I know don’t have two mansions and a house abroad.

  17. All the organizations that are held up as gold standards, such as the Mayo, Kaiser, Cleveland Clinic, etc., are successful because they have learned how to game the system. I am not saying that they do not provide good care, and there are aspects to their models, such as salaries or at least gain-sharing, collaborative practice, advanced EMR’s, etc., that are worth emulating. However, the financial advantages previously described such as higher reimbursement rates occur because they know how to leverage their prestige to get those rates. The cost savings, at least with Kaiser, come from high use of physician extenders, specific performance requirements of their salaried physicians in return for nice hours and benefits, and by gaming EMTALA laws through using non-Kaiser docs for night time ER coverage and then taking the patient away the next morning. (At least they did this in the 90’s during my experience with them.) At the Cleveland Clinic, at least in their heart surgery division, all the pre-op tests and procedures are done by the local docs, then the Clinic just swoops in and does the procedure for big bucks, sending the patient back locally for followup.
    No matter what health care system we have, there will be those who will find a way to be more successful at it, partially by “using” the less successful ones. In designing a new system, we should learn to copy the best aspects of their organizations while learning how to prevent the predatory aspects.
    And BTW, would you people please listen to MD as HELL and other docs who keep beating the drum about patient responsibility for driving up costs. They are absolutely correct; quit bashing them as cynical please.

  18. “it is another to duplicate it on a national scale withiout waste and fraud”
    Matt, we already have health system on a national scale with plenty of waste and fraud.

  19. It is one thing to implement efficient quality care medicine in one or two places, it is another to duplicate it on a national scale withiout waste and fraud

  20. As a simple “patient” who finds herself uninsured, I have read the above article and comments with great interest. I have a medical background having managed a medical practice for 13 years and understand HMO’s, PPO’s, conventional insurances, Medicare and Medicaid and their respective reimbursements.
    Has anyone considered that perhaps there should simply be a pool of money, through taxation, that insures the nation? Just as one person or a family can not afford police or fire protection, they do not seem to be able to afford a major (or even minor) illness anymore. One such incident can bankrupt them and take everything they have worked a lifetime to achieve.
    In a nation such as ours, it seems ludicrous to be in this position. Perhaps the insurance companies should go away .. or be changed to a non-profit status. They allow hospitals to bill for procedures tape to tape and only periodically sample a few claims for legitimacy .. and then apply that percentage to the whole of what is being paid. But look at the costs, the salaries and the profits of those carriers?
    And, with all due respect to physicians, perhaps medical school should be less costly so those who wish to be physicians can, thus increasing the supply. When did the system get so upside down that a physician who used to be an average citizen holding a job like his fellow countrymen get elevated to million dollar salaries?
    I have worked all my life, kept my insurance and because jobs are being sent overseas for cheaper labor, I am among the hoards of unemployed who are hanging on by a thread with foreclosure looming. I watch a childhood friend, a renown orthopedic surgeon, build mansions in 2 places in the states and 1 abroad. Perhaps it is this disparity that needs to be addressed and let us get back to entering the medical profession for the reasons of the Hippocratic oath with some reasonable remuneration for services performed.
    Do also have to agree with getting unnecessary litigation out of the way, short of gross errors like cutting off a person’s right leg when it should have been the left. People need to realize that doctor’s are human and, as such, are fallible … just as they are. We make mistakes in our everyday work and from time to time a physician will too. Let the physician be honest, forgive them and tell the lawyers to get lost.
    Just my humble opinion.

  21. Deron S,
    Nobody used the word “entirely”. But the truth is if no ones sees me today, the system cost is only the infrastructure and not delivered care. But people will come in in droves today bacause it costs them nothing.
    Why will I see minor bites and bumps? Why will I see minor fever and chronic pain? Why will I see old people who just saw their doctor, but they are still old so they come to the ED?
    Because it costs them nothing.
    Why get the CT scan on the child with a bump on the head…because the parent will go nuts if I don’t. (I don’t scan them all, but I hope you get the point.)
    It costs them nothing.
    Why is the minor car wreck in the ED three days after the accident with minor complaints of neck pain?
    Because they have been “lawyered up”.
    Why is the minor flu in the ED? They have been scared to death by the media coverage of Swine flu, and their employer requires a “doctor’s note” to excuse their absence from work.
    Why get a CT scan before surgery on a classic appendicitis presentation? Because if there is no appendicitis (which happens, remember, it is a “presentation”)and if there is a surgical complication, the doctor is toast in court for an “unnecesary operation” with an injured patient.
    Tort reform must proceed any talk of empowering the primary care doc again. The primary care doc has been caponed for decades because of the rise of litigation and specialists with more standing in court than the family doc. And reimbursement has been so mangled by the feds that the family doc will not leave openings in the office schedule for walk-ins. Every slot must be filled with a paying patient.
    Why should a doc accepted uncompensated liability?
    Why should a doc have to dictate to arbitrary standards of documentation just to get paid? I maintain I give care for free but charge for doing the paperwork. I could see many more patients a day if I could chart like on M*A*S*H. I used to dictate 10 lines. Now it is 10 paragraphs. Now they want me to enter my own orders. A minute of my time is worth an hour of a secretary’s time.
    You want to fix the system? Get the government and the lawyers and the JCAHO and the vendors the hell out of my way. Then I can just take care of patients.

  22. President Obama will probably offer some form of universal health care coverage. However, we need to fix the health care system as well.
    As a patient and a former employee (I used to work at a famous hospital on
    Long Island) of the health care system – I have first-hand knowledge on how
    the care system works in America. Close to 100,000 people die each year in hospitals due to medical errors.
    The hospital I worked at had too much administrative waste. There was endless paperwork in processing patient information. Many of the positions, especially in the
    Non-medical areas were filled through nepotism. Many of the supervisors and mid-level manager at this hospital were mostly concerned about how they impressed top administrators – CYA was (and probably still is) the major activity.
    A question I would like to ask the general public, particularly doctors – How come doctors never challenge other doctors?
    Right after I graduated college I was “confused,” doing drugs, and getting into trouble; so my parents sent me to a psychiatrist. The psychiatrist said I was “mentally ill” and he sent me to neurologist for tests. (Our family doctor stated at first I did not need any tests, and then he changed his mind.) The neurologist examined my brain and said I was fine. I just needed to “grow up.”

  23. Mayo clearly provides better clinical results and achieves higher grades in most studies of the Medicare population. However, their reimbursements from the commercial paying population are in the 200%-250% of Medicare range for all care. How does their ROI look when you factor in the premium price they charge for the non-Medicare population?

  24. “Barry – Where are you getting the 30% lower reimbursement figure? That’s an interesting point.”
    Deron S. – My source is an extremely knowledgeable retired radiologist from Minnesota who comments frequently under the name “Pat S.” on Maggie Mahar’s blog and under “Pat S2” on Ezra Klein’s blog at WAPO. As an aside, he states that Medicare also pays somewhat higher reimbursement rates to hospitals in the Bronx than those in Manhattan though everyone knows that the cost of living and hospital operating costs are higher in Manhattan. Apparently, there is an element of politics that goes into Medicare’s calculation of local medical input cost factors.
    Peter – I’m certainly not advocating unnecessary procedures. Indeed, to the extent that we are successful in weeding out cost-ineffective care, the hospital sector overall will need to downsize which, of course, implies the need for fewer employees. I was just making the point that Mayo commands quite high reimbursement rates from private insurers for the procedures it performs. It’s executive physical business, which is generally not covered by insurance but may be offered by some companies as a perk to senior management, is quite lucrative. The large endowment is an added safety net though Mayo attempts to cover its costs from health insurance plus private individual payments, including from wealthy foreigners, alone and is usually successful in doing so. The bottom line, as I suggested, is that most hospitals cannot duplicate this model, and even Mayo could probably not sustain in if it had to accept Medicare rates from all comers even with no uncompensated care. With respect to uncompensated care, the Kaiser Family Foundation estimates that it causes hospital charges nationwide to be about 6% higher on average than they would otherwise be.

  25. “In short, most hospitals would not have a prayer of duplicating this model even if they tried because they don’t have the diversity of lucrative revenue sources including a large endowment fund.”
    Barry, do you mean then that for most hospitals to survive they need to do a lot of unnessessary tests/procedures to pad their billings? If so even more reason to legislate all hospitals pay salary only, PCPs could continue to operate FFS. If all citizens were covered then that would eliminate charity care and add to hospital operating revenue.

  26. MD as HELL – Your suggestion that our high costs are entirely the result of the population, with no blame going to the system, is irrational at best. You can’t possibly believe that. System stakeholders with that thinking could face irrelevance if we ever get real reform.
    Barry – Where are you getting the 30% lower reimbursement figure? That’s an interesting point.

  27. I’ve been a patient at Mayo twice (Rochester and Jacksonville). It’s a machine with the patient at the center. You are assigned a doctor based on your principal complaint. That doctor works for you and the rest of the place works for him (or her- mostly him). I’ve never seen physicians work so effortless together. Mayo used to pay every one of their doctors on the same salary scale, a “worker’s paradise” comp model that died when market realities dictated paying more for the surgeons and cardiologists that make the place go.
    Mayo has had the luxury of selecting out of all the young people who train there the people who want to practice collaboratively. The rest they send out to practice in their silos, with a fancy Mayo entry in their cv’s. I loved my clinical experience there; they were honest, for which I would absolutely pay extra. But it is a subculture in medicine, and will NEVER be more than that. And all the clever payment fiddling and organizational gymnastics will change the broader system.
    As part of the honesty, one of my Mayo doctors told me that “we’re in the fifth opinion business”, which means that “old geezer” above absolutely nailed it.
    A lot of the patients I saw in the waiting room (ave age 75) were “healthcare hobbyists”, whose main disease was that they were old. A lot of them were merely fragile and bored, but not sick. It is easier “not to do something” for people who don’t need anything. And you get way better results when you do something, because of the relative scarcity of co-morbidities. . .
    Rochester has the special advantage of being a company town, with a lot of polite, Minnesota-nice young people to make things easier for them. It ain’t the real world and, except for the team work part, which is vital, not as many lessons as our authors above suggest for the rest of the system, whose job is a lot harder than they realize. You aren’t going to get very far practicing Ritz Carlton medicine at Fort Apache . . .

  28. In the HMO era PCPs were called “gatekeepers”. With runaway litigation, the PCP had no defense except to refer. They lost their standing as medical experts. The consumer became supreme, and government led the charge for consumer-directed healthcare. This is why the nursing home is insisting patients have PEG tubes and why they send dying patients to the ED; to keep the family/consumer from suing and to keep the regulators off their backs.

  29. No one is saying Mayo model is perfect…it is the best of what we have today.
    I would not recommend to duplicate it. I would rather suggest it as an example to show that things people beleive do not work can work.
    The new healthcare model has to be team based but who is going to decide that. That is where your PCPs come into picture.
    I am a firm believer that PCPs should be crowned as health managers. It is their responsbility to ensure wellbeing of their patients. And they should be measured on cost and wellness index.
    Then we can build things around that. People who believe EMRs are the solution, they are either selfist or naive….It is insignificant in the system we are working..however it will play a valuable role once the system is fixed a bit.
    rgds
    ravi
    blogs.biproinc.com/healthcare
    http://www.biproinc.com

  30. Unfortunately, your goals for reform are misplaced (as is the government’s). The true goals of reform must be 1) return of autonomous, trusting physician-patient relationship (clinical and financial), 2) 100% access to quality care (not just coverage, which is useless in the absence of access), 3) slowing of health insurance inflation.
    Contrary to assertions, most ordinary folks get some of their best care in small practices which serve local communities well. The Mayo model can only work in a remote, academic center, and cannot be replicated in most areas. Let’s return the word “health” to health care, and remove all the administrative jargon.

  31. “…its Medicare spending is in the lowest fifteen per cent of the country-$6,688 per enrollee in 2006”
    Medicare reimbursement PER PROCEDURE or DRG code is, on average, 30% lower in Minneapolis than in Miami. Low overall costs are apparently about a lot more than salaried doctors working with electronic records in a collegial and collaborative environment. Making enough money to pay the bills is a whole different set of issues.

  32. I was told to have a one vessel coronary bypass in Cleveberg in 1972 whilst my cousin sho was sicker needed three. He was turned down because he was too sick and died. I still have had nothing done. How did the clinic establish its Obama influencing reputation? Was it by operating on the easy cases?

  33. What you didn’t hear was, that despite the endowment and clinical acclaim of the “Mayo way”, Mayo still lost $840 million last year in Medicare billing alone.
    The ideology sounds like a great idea, but there are limitations in replicating Mayo’s clinical success. Physical location, endowments, commercial insurer reimbursement (substantially higher at Mayo), physician accordance, and the ability to integrate EMR are enormous hurdles for physicians outside of Mayo or Kaiser.
    http://www.time.com/time/politics/article/0,8599,1905340,00.html
    Moreover, profiteers in the insurance industry and Big Pharma—who spend $1.4 million a DAY for lobbyists—will ultimately control your medical future. Mayo across the country? Dream on…

  34. Anecdotes prove nothing but are great stories and we could hope to have a lot of them.
    Rochester, MN is a medium to small sized city with a population that will not have above average risk for Hypertension or Diabetes or Renal failure or heart disease. Since it relatively remote from the Twin Cities, it has no significant poverty or disability. There Medicare spending should be lower for these reasons. It is a great place for medical care. But it is not serving a random population. Neither is Kaiser.
    Medicare concentrates the sickest people into one plan and they cost a lot to treat. There are no budget limits per patient in Medicare. These patients will always cost more to treat, at least until the politics changes and rationing eliminates costly treatment with no return for the payor.
    It is the population and not the system that drives costs.

  35. In this piece, I was struck by the phrase, “Core values drive organizational behavior…” Two years ago, I sat in a hospital room with my grandmother, who was dying, and who was receiving terrible end-of-life care on all levels, and I kept on looking at the poster on the wall of that hospital room, which listed the hospital’s core values, including their belief that they “put patients first.” The reason why Mayo is extraordinary is that they go beyond claiming that they provide patient-first care, they actually do provide patient-centered care on multiple levels. It’s about establishing the core values of high-quality, high-value care, and then actually following through on those values. That’s what we’ve got to figure out if major health reform legislation passes this year–what happens afterwards on the follow-through.

  36. This is interesting. It seems that Mayo is NOT rewarding physicians financially for better outcomes. On the other hand, it is not providing incentives for volumes and procedures either.
    Is that all we need to do? Remove the financial factor from health care decisions and everything else will fall into place? How do we do that and maintain the notion of private practice? Or maybe we don’t.

  37. While I know Mayo has a great reputation for both care quality and cost-effectiveness, I would like to offer some caveats. First, it has been less than completely successful in replicating its Rochester, MN facility’s culture at its satellite facilities. Second, it has a lucrative niche it providing high cost physical exams to executives. Much of this care may not be evidence based. Third, it has a substantial number of patients from other countries as well as wealthy Americans from throughout the U.S. Many of these patients pay (very high) full list prices for their care. Fourth, Mayo collects quite high rates from private insurers for the procedures it performs. Finally, it has a large endowment that can be drawn upon to subsidize patient care if necessary.
    In short, most hospitals would not have a prayer of duplicating this model even if they tried because they don’t have the diversity of lucrative revenue sources including a large endowment fund. I wonder if Mayo could provide anything close to its current standard of care if it had to accept Medicare rates from all comers. It has also fought with several states quite aggressively over what it considers (probably rightly) to be grossly inadequate payments from Medicaid.
    That all said, I applaud its team approach and its salaried payment model for the doctors there. I wonder, though, what percentage of doctors in the U.S. would feel comfortable and satisfied working in a Mayo-like environment and culture which includes significant limits on compensation compared to what might be available elsewhere.

  38. I agree that the Mayo model is supurb in delivering high quality, lower cost care. The first ten years of my career I practiced at Virginia Mason in Seattle. I still go there for my personal care today. I have also practiced at Group Health. Although staff-model HMO’s haven’t always performed in the patient’s best interest, Group Health has transformed itself and like Kaiser, has become a leader in the use of electronic records and e-Health services for its patients. When it comes to my own health, especially if I had a serious, life threatening condition, I’d go for the “team medicine” approach any day over the fragmented, disjointed care that most people experience when healthcare is delivered by a “cottage industry”.

  39. Well, duh. So what’s the big problem – why can’t the US ensure this type of healthcare? Oh yeah, the profit lobbies. Too many CEOs not getting their $45million-dollar salaries plus profit shares. Silly me, I thought healthcare was about health.

  40. Mayo and once I was a member of Kiaser…I really liked them. There model is preventive.
    The model Mayo has is of healthcare manager. or at least a week version of it.
    The best way to improve is to make PCPs the health program mgr. They should work for govt and they would responsible for the wellness and cost.
    Will cut cost down, eliminate waste, it will be preventive, and so much more.
    rgds
    ravi
    blogs.biproinc.com/healthcare
    http://www.biproinc.com

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