At Mayo Clinic, we take pride in delivering efficient, high quality care to each individual patient. As an organization that has focused on the patient’s needs for over 100 years, the decisions that Mayo made last week to op-out of Medicare participation in a small Arizona family practice clinic and to discontinue Medicaid participation in Nebraska and Montana were very difficult for us.
Medicare at Arizona Family Practice
Mayo Clinic in Arizona loses a substantial amount of money every year due to the reimbursement schedule under Medicare, a loss we cannot continue to sustain. The discrepancy between what Medicare pays and our cost of providing service is particularly acute for our primary care practices. Due to these ongoing financial challenges for our primary care practices under the current Medicare system, the five physicians at Arizona’s Mayo Clinic Family Medicine – Arrowhead will opt out of participating in Medicare, meaning that Medicare will no longer reimburse for the services they provide. This change, effective Jan. 1, will only impact primary care office visits at this site. Specialty care, laboratory services, imaging studies and ancillary services at Mayo Clinic will still be covered by Medicare.
Nebraska, Montana Medicaid Disenrollment
Also effective Jan. 1, Mayo Clinic will discontinue participation with Nebraska and Montana Medicaid due to the fact that these states are not part of our primary service area, along with significant administrative requirements, and low reimbursement levels. It is unusual for any medical center to participate with Medicaid programs in states outside of their primary service area. Based upon a review of Mayo Clinic patient records over the past two years, fewer than 50 existing patients will be affected by this decision, and Mayo is committed to working with Nebraska and Montana officials to ensure that these patients do not fall through the cracks during this time of change.
Signs that Reforms Must Pay for Value in Health Care
Even though Mayo has limited the impact of these decisions to affect as few patients as possible, it is disappointing for us to have to make business decisions such as these. Nevertheless, decades of underfunding and paying for volume rather than value in government insurance programs have left us with few other options. Recently the Medicare Trustees reported that Medicare will go bankrupt by 2017, and that Medicare will have to cut benefits or payment rates by 19 percent to balance its budget.
Providers who do fewer unnecessary tests and services are paid the least, and they are the doctors and hospitals which will go out of business first if we don’t change the payment system. For example, here at Mayo Clinic, the cost of providing services to Medicare patients exceeded the total amount paid on behalf of Medicare patients by $840 million in 2008.
Unfortunately, Mayo is not alone. There are hundreds of smaller clinics, family doctors, and hospitals across the country grappling with the same hard decisions.
This is why Mayo Clinic strongly supports health insurance reform and health care delivery reform. Because the Medicare reimbursement system rewards piecework – performing diagnostic tests and procedures – health care delivery is laden with these expensive, fragmented pieces of care. Health care delivery reform on behalf of the patients’ best interests means changing the payment system to reward value—defined as better outcomes, better safety, better service and lower cost—rather than simply rewarding the provision of more tests, visits and procedures. Better outcomes or value result in fewer tests and decreased overall costs.
Some suggest that a system that would reward high quality, lower cost care would adversely affect high cost areas that treat poorer and sicker patients. In fact, in February 2008, Peter Orszag, as director of the Congressional Budget Office, reported that three previous studies of patient health status found that patient acuity and income levels explained less than one-third of the regional differences in Medicare spending.
As a not-for-profit organization, Mayo is committed to our mission of patient centered care. One of our four Health Policy Center Cornerstones is to work to ensure insurance coverage for all Americans. Unless payment models are changed to reward value, expanding Medicaid and Medicare government-run, price-controlled, public plans will be financially disastrous to individual physicians, medical group practices, and hospitals, which will ultimately hurt even more patients who seek care.
I read the Mayo Clinic position on health care reform. I find it strange that in all the health care reform being discussed that there is no mention of patient behavior and attempts to modify self-sestructive behavior by economic incentives as a part of reform! Discussions only center on payment and compensation schemes to providers to try and control costs(kind of like preventing fires by hiring more firemen without enforcing builing andfire codes or taking the matches away from children). I left the active practice of Medicine because I became disgusted with patients who know more about their favorite football or baseball team or TV star than their own bodies and their own diseases, and didn’t care to modify their lifestyle at all(just give me a damn pill!). Things will change and expenses go down only when patients are charged more for modifiable disease states(Obesity,HTN,AODM,smoking caused COPD etc.) than for non-modifiable/inherited conditions (SLE,JOIDDM,MS,SSAnemia,etc.)and told “You are paying more because your lifestyle choices are causing or exacerbating your disease. You will pay less when and if you modify your lifestyle” We should also be rewarding healthy lifestyles with lower insurance rates for those individuals. If the US Government were truly serious about health care reform it would 1. Outlaw for profit health care delivery and health insurance companies.Pay off all the owners of stocks in these companies with tax credits amoritized over 50 years and(for individuals) willable to decendants,the price being an average of the prior 3 years stock price.3.Charge the healthiest people $4/day (about 25% of 300 million US population).Charge the middle 50% of the US population who have 1 or 2 modifiable disease states $6/day. Then charge the sickest people(about 25% of population)with 4 or more conditions $8/day(unless they have an unmodifiable inherited condition then getting the $4/day rate). This would raise $670 Billion/yr. If it costs more than this in a profitless care driven health-improving model then the Federal Government should pay the rest out of general revenues and taxes. We should also create local non-profit community based health care cooperatives, run by local business people on the boards together with health care professionals to collect the health insurance premiums and organize health care delivery and contract with local providers and non-profit clinics and non-profit hospitals to provide care for their constituent members. Areawide or statewide regional associations should be encouraged to even out the costs and enable the cooperatives to buy products from medical suppliers and drug and device manufacturers at lower costs. I purposely left out the drug,medical supply and device manufacturing companies form my “outlawing profit” and buyout scheme. Let the pressure of dealing with an organized constituency of limited customers take care of their propensity to amass great profits for the few on the backs of the sick and dying to keep costs down! In my opinion this scheme is true health care reform for the people, by the people. That stuff Washington is pushing is just a scheme to allow insurance companies and for profit clinics and hospitals to force health conscious minimum service needing Americans to give them more profits!
I would likto apologize for spelling errors like “self-destructive behaviors” in my comment. I was working on a library shutdown time of 5 minutes!
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