Mayo Clinic wants payment reform

Insuring Resources Commentary:

It still baffles me how so many people, including Pres. Obama knows what health care reform should include and what models work best and yet they did very little to make it happen.



Mayo Clinic Supports Bill But Seeks More Action on How Care Is Paid For


By RON WINSLOW - Wall Street Journal

The Mayo Clinic, often cited by the Obama administration as a model for high-quality, cost-effective health care, generally supports key provisions of the legislation approved by the Senate, an official said Thursday, but he called for more aggressive steps to change how care in the U.S. is paid for.

"The concerns are whether the legislation will be strong enough to change the incentives in the system today, which are mostly around paying for volume" and not for "value" of care, said Jeffrey Korsmo, executive director of health policy center at the Rochester, Minn., clinic.

The dominant system of reimbursement in the health-care system, known as fee-for-service, pays doctors and hospitals for each test and procedure they perform or order, rewarding providers based on delivering more--rather than better--care, Mr. Korsmo said.

The Senate measure includes provisions for Medicare pilot programs to test the effect of bundling all of the care provided in such big ticket procedures as hip replacement surgery, where hospitals and doctors currently bill separately for their services. Paying a single "bundled" fee is intended to encourage doctors and hospitals to work together to provide more efficient care. Other pilots include treatment for, say, a year of care for a person with diabetes.

"These pilots need to go quickly beyond demonstration programs and become part of the way we pay for care," Mr. Korsmo said.

Led by Denis Cortese, its recently retired chief executive officer, the Mayo Clinic has taken an unusually activist stance in the health-overhaul debate, making arguments for expanding coverage, coordinating patient care and paying for better results rather than volume of care. The nonprofit clinic reported revenue of $7.22 billion in 2008, of which $6.14 billion came from medical services. In addition to its Rochester headquarters, it has operations in Jacksonville, Fla., and Scottsdale, Ariz.

Despite its reputation for treating patients with complex, big-ticket medical problems, the clinic is routinely included among the nation's most efficient health-care providers. One reason: Its doctors are all on salary so their incomes aren't based on the number of procedures they do. Another is the clinic's sophisticated electronic medical-record system, which helps improve coordination of care for its patients and reduces orders for duplicate tests.

That helps explain why President Barack Obama and a host of other political leaders and health-care experts extol Mayo as a model citizen in the health-care system.

That isn't to say Mayo officials and Democrats hammering out the health-care bill see eye-to-eye on all issues. The clinic opposes a government-run health plan, known as the public option, that is favored by many Democrats. That provision was cut from the Senate bill, but it is included in the House legislation and is one of several potentially thorny conflicts to be resolved as House and Senate negotiators seek to come up with a final, common version of the legislation.

The clinic also was against the proposal, raised and then scuttled in the Senate, to allow people aged 55 to 64 to buy into the federal Medicare plan for the elderly. "Medicare isn't the model we ought to be pursuing [to expand coverage]," Mr. Korsmo said. "It's been part of what's gotten us into the trouble we're in."

Mayo is also concerned about the potential for Medicare to impose across-the-board cuts in payments to health-care providers without differentiating for cost-effective doctors and hospitals. It worries that such Medicare cuts would punish the Mayo Clinic and other organizations known for delivering good care at reasonable prices.

Clinic leaders, however, do favor a mandate requiring people to purchase health coverage to make sure young and healthy people participate in the insurance system. And they like the idea of health-insurance exchanges, also a prominent feature of both the Senate and House bills, where consumers can shop for health plans.

"There is a role for government--it ought to create the exchanges and subsidize premiums where there is a financial need," Mr. Korsmo said.

Two other issues aren't getting sufficient attention in the current legislation, Mayo officials believe. Changes in medical malpractice policy are needed to encourage more open discussion of medical errors, Mr. Korsmo said. And with estimates that 40% of medical costs are the result of personal behavior such as smoking and diet habits, more attention needs to be focused on that problem, he added.