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Who Benefits From the Mayo Clinic Explicitly Putting Commercially Insured Patients Ahead of Some Government Insured Patients?

By Roy Poses, MD, Clinical Associate Professor of Medicine at Brown University, and the President of FIRM – the Foundation for Integrity and Responsibility in Medicine. Originally published at Health Care Renewal

Amidst all the chaotic noise emanating from Washington, DC, little snippets of news keep slipping out reminding us that the US health care system remains monumentally dysfunctional, and that the dysfunction serves the interests of the system’s insiders.

Putting Commercially Insured Patients First

On March 15, 2017, the Minneapolis Star-Tribune first reported that the CEO of the august Mayo Clinic had stated in a late 2016 speech to Clinic personnel that henceforth the institution would preferentially accept patients with private insurance over those with public (Medicaid or Medicare) insurance under certain circumstances.

when two patients are referred with equivalent conditions, he said the health system should ‘prioritize’ those with private insurance.

‘We’re asking … if the patient has commercial insurance, or they’re Medicaid or Medicare patients and they’re equal, that we prioritize the commercial insured patients enough so … we can be financially strong at the end of the year to continue to advance, advance our mission,’ [CEO Dr John] Noseworthy said in a videotaped speech to staff late last year. The Star Tribune obtained a transcript of the speech, and Mayo has confirmed its authenticity.

In response to the Star-Tribune, spokesperson Kari Oestreich stated:

Mayo remains committed to publicly funded patients — who make up half the health system’s business — even with the new policy.

‘We can provide the care they require for complex medical issues,’ he said. ‘However, we need to balance requests from these patients with their specific needs — if it’s necessary for them to come to Mayo — as well as the needs of commercial paying patients.’

CEO Noseworthy felt that the problem was that publicly insured patients did not bring in enough money:

In his speech, Noseworthy said a recent 3.7 percent surge in Medicaid patients was a ‘tipping point’ for Mayo.

‘If we don’t grow the commercially insured patients, we won’t have income at the end of the year to pay our staff, pay the pensions, and so on,…’

Note that this tipping point was apparently reached under the US Affordable Care Act (ACA, or “Obamacare”) and had nothing to do with any attempts to “repeal and replace Obamacare” by the current Trump administration.

Was the CEO Just Being Honest?

A variety of people interviewed by the Star-Tribune and other news sources suggested that other hospitals may have previously thought to subtly discourage patients whose insurance coverage was less lucrative for the hospitals. However, what was unusual was that this policy at the Mayo was expressed openly, at least to hospital personnel if not the larger world.

The Star-Tribune reported, without further comment:

‘The most interesting thing isn’t that it’s happening, it’s that a high level executive actually said it out loud,’ said Mat Keller, who monitors health care policy and hospital finances for the Minnesota Nurses Association.

StatNews reported,

‘There is this thought that hospitals treat whoever comes to their door, but this is a statement that lays out what happens,’ said Christine Spencer, a health economist at the University of Baltimore. ‘It’s a surprise to hear it out loud like that, but hospitals, probably for decades, have engaged in these more subtle attempts to get privately insured patients over Medicaid or the uninsured.’

Maybe CEO Noseworthy is just more honest than leaders at other institutions?

A Violation of Mission

Similarly, some experts also raised ethical concerns about the new  Mayo Clinic policies. For example, as reported by Modern Healthcare,

‘A cornerstone of our ethical thinking is you get the same care whether you’re rich or you’re poor, and we don’t triage by the size of your wallet,’ Caplan said. ‘A wealthy leader like Mayo is sending a grim message not only to other hospitals but to those who rely on Medicare and Medicaid.’

Also, per the Rochester (MN) Post-Bulletin,

Dr. Gerard Anderson, the director of the Johns Hopkins Center for Hospital Finance and Management who writes many national papers about health care funding, said Noseworthy’s directive was like something from a Third World country.

‘This is what happens in many low-income countries. The health system is organized to give the most affluent preference in receiving health care. It does not happen in most affluent counties,’ he wrote in response to the Star Tribune article. “Hospitals spend nearly all the money they get. If private insurers pay less than public insurers, then it will appear that public payers are paying less than costs. However, what is really happening is that hospitals are spending all the money they receive and those that pay less are accused of not paying the full cost.’

Putting more lucratively insured patients first seems to violate the Mayo  whose Mayo Clinic Mission 

To inspire hope and contribute to health and well-being by providing the best care to every patient through integrated clinical practice, education and research.

and hence is an example of mission-hostile management.
Moreover, the new policy seemed to directly contradict other policies of the Mayo Clinic:

Mayo Clinic’s nondiscrimination policy statement states, ‘As a recipient of federal financial assistance, Mayo Clinic does not exclude, deny benefits to, or otherwise discriminate against any person” based on race, gender, religion and other characteristics, including “status with regard to public assistance.’ This statement applies to ‘admission to, participation in, or receipt of the services and benefits under any of its programs and activities,’ through Mayo itself or any contractors.

The system also states on its website that it ‘appropriately serves patients in difficult financial circumstances and offers financial assistance to those who have an established need to receive medically necessary services and meet criteria for assistance.’

Note that ideally, the whole purpose of a non-profit organization is defined by its mission.  Non-profit organizations ostensibly raise money, through contributions, and by charging for programs and services, to support that mission.  To repeat, the money is supposed to support the mission.  The money is supposed to be a means to an end.  The mission is not too make money.

So the explicit choice to go against the mission for the purposes of making more money should be a red flag, and should only be justified if there is real peril of immediate financial collapse threatening the whole mission.  I did not see any evidence suggesting such a danger in the articles describing Dr Noseworthy’s speech.

A Violation of Non-Discrimination Policies, or Even Laws and Regulations?

It seems possible that the explicit policy to disfavor patients with government insurance vis a vis those with private insurance could violate existing regulations or laws.  For example, per the Rochester (MN) Post-Bulletin, the new Mayo Clinic policy was raising related concerns on the behalf of Minnesota state government.

Minnesota Department of Human Services Commissioner Emily Piper, who oversees the agency that manages the state’s MinnesotaCare and Medicaid programs, said she was surprised and disturbed to read the comments that Noseworthy made in an internal message to employees.

‘Fundamentally, it’s our expectation at DHS that Mayo Clinic will serve our enrollees in public programs on an equal standing with any other Minnesotan that walks in their door,’ she said Wednesday afternoon. ‘We have a lot of questions for Mayo Clinic about how and if and through what process this directive from Dr. Noseworthy is being implemented across their health system.’

Fear of Catastrophe, or Inconveniencing the Rich?

The new explicit Mayo Clinic policy to disadvantage patients insured by Government programs compared to those insured by commercial insurers has caused some experts to question whether Clinic leadership has proposed mission-hostile, discriminatory, unethical, or even illegal behavior.  Is the threat the Clinic faces justify  taking such actions?

As noted earlier, the Mayo Clinic CEO implied the institution was in danger of running out of money at the end of the year “if we don’t grow the commercially insured patients,…” But was that a serious concern?  Or when he said “we won’t have income at the end of the year to pay our staff, pay the pensions, and so on,…” was he really worried about the ability of the Clinic to pay its top leadership in the style to which they have become accustomed?

The CEO did not present and evidence that the Clinic is in such dire straits that it is likely to go bust this year.  The Clinic does not rapidly disclose details of its finances.  However, the latest Mayo Clinic Facts stated that total revenue from current activities is approximately $10,315,000,000.  The most recently available detailed financial report in the form of a Form 990 filed with the US Internal Revenue Service by the Clinic  in 2014, covering 2013, stated 2013 total revenue as $4,560,196,033. This suggests a greater than 100% increase over four years.  That seems to be an impressive growth rate, not suggesting imminent risk of bankruptcy.

On the other hand, the Mayo Clinic leadership does seem accustomed to living in style.  While Mayo Clinic executive salaries since 2013 have not been disclosed, the same 2014 990 form showed that in 2013 CEO Noseworthy received $2,336,662 in total compensation.  Other executives receiving more than $1 million in total compensation included Trustee and VP Dr William C Rupp ($1,049,333), Assistant Treasurer Paul A Gorman ($1,117,598), Treasurer Harry N Hoffman III ($1,835,134), and former CAO Shirley A Weis ($1,530,320).  In addition, the form included statements that trustees received reimbursements for first-class travel for themselves and spouses; the institution purchased the former chief administrative officer’s (CAO) house when she relocated; many leaders received lucrative supplemental retirement plans (whose value was included in total compensation);  inventors including named employees are “entitled to a share of royalties received by Mayo, including instances where such royalties are in the form of equity-based instruments;” named employees received “tax -indemnifaction and gross-up payments,” and that named employees included personal services (e.g., maid, chauffeur, chef). This seemed to be pretty rich living for leaders of a non-profit institution whose mission, to repeat is

To inspire hope and contribute to health and well-being by providing the best care to every patient through integrated clinical practice, education and research.

So is the Mayo Clinic about to go bankrupt if it does not move selected patients with less lucrative government insurance coverage to the back of the line?  Or are its executives so used to their remunerative bubble that they simply cannot conceive of trying to control costs to uphold the mission if such stringencies might reduce the money flowing to management?

Similarly, StatNews quoted [Chief executive of the Center for Healthcare Quality and Payment Reform Harold] Miller.

‘True leadership would be to figure out how to deliver high-quality services at the lowest cost possible,’ Miller said. ‘If institutions are simply going to say, ‘I’m not going to serve patients unless I get paid more,’ that’s only contributing to the problem.’

Summary

But these days, the actual leaders of health care organizations have become accustomed to the pay and perks of top executives of big commercial firms.  We have documented again and again the ever rising and increasingly monumental pay of health care CEOs, even of ostensibly non-profit organizations, seemingly out of proportion to their organizations’ abilities to help patients’ and the public’s health.

This has gone on in an era of ascendant neoliberalism.  Krimsky summarized the tenets of neoliberalism in his review of Science-Mart by Phillip Mirowski.

The term neoliberal, which arises from the work of post–World War II economists such as Friedrich Hayek, Milton Friedman and others belonging to the ‘Chicago school’ of economics and law, has little in common with what is usually thought of as liberalism. The important tenets of neoliberalism, Mirowski says, include such propositions as the following: ‘The Market’ is a better processor of information than the state; ‘politics operates as if it were a market’; ‘corporations can do no wrong‘; ‘competition always prevails’; the state should be ‘degovernmentalized’ through ‘privatization of education, health, science and even portions of the military’; a good way to initiate privatization is to redefine property rights; ‘the nation-state should be subject to discipline and limitation through international initiatives’; ‘the Market . . . can always provide solutions to problems seemingly caused by markets in the first place’; ‘there is no such thing as a ‘public good’’; ‘freedom’ means economic freedom within the Market.

The logic appears to be that leaders of organizations that can do no wrong should be entitled to market levels of compensation, however high they may be, and without concern of whether the market is perfect (because all markets are by definition, perfect).  Also, the logic appears to be that corporations that can do no wrong should be immune from questions about actions that appear to not put patients first.

All the distractions in Washington, DC should not put us off how the commercialization of health care in an era of neoliberalism (and managerialism) has led to ever worsening dysfunction, and ever increasing advantages to the insiders within the system.

But where will patients end up in such an era?

We need true health care reform that would enable leadership that understands the health care context, upholds health care professionals’ values, and puts patients’ and the public’s health ahead of extraneous, particularly short-term financial concerns. We need health care governance that holds health care leaders accountable, and ensures their transparency, integrity and honesty.  What we will get is endless resistance to such reform from those who personally profit from the current dysfunctional, and increasingly corrupt system. And the current chaos and dysfunction in government at large is making it easier for those who personally profit to profit even more.

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37 comments

  1. Benedict@Large

    It seems that there are two sides to this. One of course is that Medicaid patients are being punished by the success of the AMA Medicaid expansion, while the other says that it’s a response to that expansion crowding out Mayo’s ability to provide for commercial customers. Either way, it says something is wrong with the system.

    1. Tomonthebeach

      The issue here is not just Medicaid. Medicare insures the bulk of us who are over 65 because the government creates huge disincentives for not joining Medicare. Moreover, all military retirees are “required” to pay Medicare B premiums or lose their TRICARE coverage, which in retirement is basically medigap insurance.

      The easy way out of this dilemma, is for Congress to pass a law that forbids what Mayo, and probably most hospitals are doing when it comes to triaging by insurance vs illness.

        1. yamahog

          A healthcare worker actually said it. And then Tony yelled at her and called her some choice words.

          What’s interesting about the show is how medical bills date it. After mobsters would beat each other up, another mobster covered the medical bill – $1000 to wrap up a broken arm, $5000 for a few nights in the ICU, ect.

          It seems as though the mob could scarcely afford to rough people up these days.

      1. millicent

        What Mayo does is already against the law. If they accept federal funds they may not in any way, shape or form discriminate. This policy places senior citizens and poor people in a second class (if that) status. A complaint needs to be filed with the funding agency, presumably NIH, to investigate with the idea of withdrawing federal funds.

        1. Joey

          I see this everywhere in ‘healthcare’ bidness. For example, earlier my physician used to be a small office with personalized care. Now it is part of a large ‘non-profit’ system wherein the employees appear to be constantly ‘upselling/cross selling’ services right from the point I enter their office (and actually even by mail/phone) just like any other for-profit business. They use fear tactics to nudge me towards tests that I may be hesitating about (sending certified mail!).

          This change greatly accelerated with ACA.

          Sad to say, patients have to be on guard and seek second opinions or their own counsel as the ‘care’ they receive may not necessarily in their best interests.

        2. Hoonose

          What you are referring to is EMTALA, which requires Medicare approved/participating ER’s to see and treat all true medical/surgical emergencies, without asking the patient about ability to pay.

          So the bulk of Mayo’s medical encounters unrelated to emergencies is not so restricted. That is more of a simple business decision.

      2. Carolinian

        Sounds like there already is such a law. In fact many of the supposedly charitable things that hospitals do–such as offering payment discounts for the indigent–are actually requirements in order to maintain a non-profit status that gives them tremendous financial benefits such as property tax breaks on their extensive campuses. Our medical establishment is at once subsidized by the government (not least by all those non compete licensing measures that Dean Baker talks about) while thinking themselves entitled to this cavalier attitude toward the general good represented in the above article. Meanwhile the Democrats go to the mat defending Obama’s medical industry income protection act.

        It’s all very bleak until the Swamp finally gets drained (not by Trump it increasingly appears). Both political parties are adamantly opposed to real reform.

      3. RUKidding

        I am still working so I got around the Byzantine system of being “forced” to buy Medicare (although I get Part A for “free”) after turning 65. But once I fully retire, then I have a matter of months to get onto Medicare, which will become my Primary insurance. I realize that for people who are under or unemployed, Medicare is a life-saver. For my part, I’m not particularly looking forward to it, and I suspect that it’ll just get worse over the next several years before I stop working full time. The crappification of Medicare is one of the more major motivators for continuing to work full time for as long as I can.

        This is just one example of what awaits me in my so-called “Golden” years.

        Thanks for the post. I had heard a snippet about this yesterday. It’s just outrageous, especially given all the tax cuts, perk, incentives and tax loopholes these behomouth medical complexes get.

        1. gepay

          I am retired and do not receive Medicare Part A for free. I am charged something over a thousand dollars that comes directly out of my SS check. I am fairly healthy and mostly self diagnose and treat myself so I did not get Plan B which costs another &1500 or more. I don’t use any drugs so I don’t use Plan D. When my wife was alive I got her drugs from Canada and saved $3000 a year for the same drugs made by the same pharmaceutical companies. i could have saved more by getting generic drugs made in Turkey or India – sometimes these do not work as wel l- sometimes they do.
          Before retiring I was self pay as you go. I never received a hospital bill without mistakes in their favor – sometimes being charged for doctor’s visits that didn’t happen – the last time I was charged $1200 5 times for alcohol – I was only there a week and had no external injuries. I used to think US hospitals were the best place to go for injuries from auto accidents and such – no more. I had an auto accident and was in the hospital – when they realized I didn’t have private insurance they moved me to a different section. while I was unconscious they gave me 5 vaccinations – one was for Hep A. I had already had the disease when I was in China. Another for Hep B – not being a needle drug user or sexually promiscuous I didn’t need. I complained of a sore throat so they gave me a CAT scan – which found nothing wrong but cost over a thousand – I had Strep throat that they took 4 days to notice because a doctor never looked at my throat. When I kept complaining they took a swab which did result in a diagnosis. Because it took so long I began having a heart arrhythmia so they wanted to keep me in the hospital after my collapsed lung had healed. I took myself out before they killed me and healed my heart arrhythmia with alternative methods. It took me a year to get my health back.

        2. bernie

          I just want to put in a good word for Medicare. My experience has been excellent. I pay a premium for UH Supplemental Medicare Part N of $121/monthly. And I can go to almost any physician/facility including John Hopkins/Mayo/Cleveland virtually free. Same with my home town care is virtually free.

          I do pay a $30/month premium to Silverscript – which is mandatory in addition to the above bill. And I get some of my drugs from Canada. But, fortunately, I have little drug costs.

          There are many blogs and many people ON THOSE BLOGS, that will help neophytes to get the right plan. It is not daunting. Its really easy once you spend a bit of time with it. I consider myself very lucky to have medicare. I have had heart caths, checkups, colonoscopys, you name it without any financial concerns.

          And I have never seen an MD push me to the back of the line because I am medicare paying.

  2. sleepy

    Mayo’s longterm plan is the development of itself and the city of Rochester into a Destination Medical Center, complete with $585 million in state subsidies.

    The Mayo Clinic is located in the small city of Rochester (pop. 111,000), about a two-hour drive from Minneapolis, Minnesota. And it is, right this minute, competing fiercely for a small-but-extremely-lucrative slice of the global medical tourism industry. The wealthy American, European, east Asian, and Gulf Arab patients who have been the clinic’s bread and butter have been instead choosing to get treatment abroad or at domestic rivals like Baltimore’s Johns Hopkins University or the Cleveland Clinic. But that may be changing–and the reason, if not the construction, is simple: the Destination Medical Center.

    That’s an audacious 20-year plan by Rochester, the Minnesota state government, the Mayo Clinic, and their private partners to spend more than $6.5 billion on a kind of real-life version of SimCity, designed to turn Rochester into a global biotech hub, and double its population in the process.

    Vast plots of land would be used for fresh office space for biotech and pharmaceutical firms, local schools would get a cash injection, and development of amenities like hip restaurants and upscale shops would be subsidized by local and state government to attract out-of-town talent and medical tourists.

    https://www.fastcompany.com/3041355/the-65-billion-20-year-plan-to-transform-an-american-city

    I live in northern Iowa, 85 miles from Mayo. Around here–southern MN, northern IA,–Mayo functions as the local hospital where area residents are routinely sent to for anything that requires treatment beyond the basics that the small local hospitals provide. It was never viewed locally as the super-exclusive, luxury-style medical facility that many not from this area think of. In its waiting rooms you see a farmer whose foot was hurt in a tractor accident sitting next to an Arab prince.

    Mayo announced recently that it no longer accepts newly privatized Iowa medicaid. Squeezing out medicaid and medicare patients will result in travel to the University of Iowa, 160 miles away. Local Rochester patients will most likely travel to Minneapolis.

    1. Carla

      This HAS to illegal.

      LOCK ‘EM UP.

      Mayo will continue to function with their CEO and COO behind bars. In fact, it will probably function better without their toxic influence. And the message needs to be sent to the execs at the Cleveland Clinic, Hopkins and their ilk, who of course are doing the same thing, but maybe not as arrogantly and stupidly talking about it.

      It’s gonna be prison sooner, or the guillotine later.

      1. washunate

        Right on, but that’s the thing. It’s not really that illegal; it’s actually what our political class wants. The major point of PPACA was to forestall real reform of the healthcare delivery system, especially hospital chains, drug dealers, and equipment vendors, because that’s where the bulk of the predation occurs.

        Even the former First Lady had a cushy, overpaid admin job at a hospital chain back in Illinois.

    2. Herky

      Sleepy- we should connect, as I too live in Northern Iowa. I’ll leave my email address with Yves / Lambert for you to pick up if you want.

  3. amouise

    Don’t forget, on March 9th Mayo announced that they would be slowly starting their campus renovation and expansion at some locations. and that some of that money will eventually be coming from the state of Minnesota. I would imagine that other states are also chipping in since Mayo is rather world renowned. It is interesting that no state dollars will flow, according to the 2012 article until $200 million is spent by Mayo.

    Plus Mayo has their own Economic Development Plan called Destination Medical Center (DMC) which involves consultants for the city of Rochester, Olmstead county as well as the state of Minnesota. I’ve linked to the transit plan to show a piece government involved planning. Someone with more time can track down more information because it is a multi-decade, multi-billion dollar investment project which will remake Rochester, MN.

    My point is that elites (and let’s face it Mayo has a world-class elite reputation) make the stuff they want to happen with public dollars happen. Right now it’s limiting Medicare and Medicaid patients, but Mayo is internationally known. A global medical destination center. Is there a possibility that somewhere in the future, US privately insured patients will be given less priority than the global elite? Wouldn’t it be ironic if US citizens became unable to utilize Mayo for medical services somewhere down the road.

    There’s a hell of a lot more to this story than most people realize. And the CEO’s public statement really serves many aspects of the beast although most will only see the most obvious Medicare and Medicaid pieces.

    http://www.bizjournals.com/twincities/news/2017/03/09/mayo-clinic-to-spend-217m-on-st-marys-renovations.html

    http://www.startribune.com/rochester-mayo-clinic-celebrate-585-million-windfall-from-the-state/208594531/

    https://www.co.olmsted.mn.us/planning/rocog/2040lrtp/Documents/Chapter%208%20Transit.pdf

    https://www.fastcompany.com/3041355/the-65-billion-20-year-plan-to-transform-an-american-city

  4. Norello

    About a year ago a family member applied for a doctors position at the Minnesota Mayo Clinic. They communicated to him one of the most important things they were looking for in a doctor was that they knew how to minimize costs in the effort to maximize profits. In their view their current doctors spent too much on “unnecessary” things that did not increase the profit the hospital would make.

    As to the articles question of what management’s motivation is, that I cannot say. What I can say is from what little I heard it seems like they are moving towards the poor patient care standards of other hospitals in order to make more money.

    1. SpringTexan

      That is really interesting — and distressing — but not surprising — about your family member’s interview.

      The recent Seattle expose of Swedish-Cherry Hill involved a doctor who judged everyone by how many RVUs (“relative value units” — comes down to $$) they could generate and bragged of his own.https://projects.seattletimes.com/2017/quantity-of-care/hospital/

      In the past, the SNI surgeons pooled a portion of their pay and redistributed it among each other. It was a system designed to encourage doctors to pass along patients to their peers when they thought a co-worker might be a better specialist to handle the patient’s procedure. In some surgical settings, all income is pooled this way.

      The revised contracts at Cherry Hill’s SNI program ended the pooling system, according to records and interviews. Surgeons would be paid almost entirely on their production, as measured by Relative Value Units, or RVUs. RVUs are part of a Medicare reimbursement formula that assigns a value to each procedure.

      Volumes had been rising among SNI’s top surgeons in 2013 and 2014, and they continued rising under Delashaw’s stewardship and the new contracts, according to state data that track details of each inpatient hospital visit in the state. Among the institute’s brain and spine surgeons, the average billing per case also jumped.

      and

      The doctors in the neuroscience unit are incentivized to pursue a high-volume approach with contracts that compensate them for large patient numbers and complicated surgical techniques. Of the six top-producing brain and spine surgeons in Washington state in 2015, five were part of Cherry Hill’s neuroscience team, averaging $67 million in billed charges.

      The hospital touts its star surgeons to draw patients from hundreds of miles away, but six current and former staffers said those doctors will sometimes do little in the operating room once the patient is under anesthesia. Instead, the surgeons will leave less-experienced doctors receiving specialized training to handle parts of a surgery. That allows the primary surgeons to be in another operating room — a practice known as “concurrent surgery” — to maintain high volumes. It is not prohibited but can test the limits of Medicare rules.

      Hospital leaders recruited one doctor from another institution as he dealt with an internal investigation and allegations that he had high rates of complications and may have performed unnecessary surgeries. At Cherry Hill, more allegations of patient care problems emerged about the doctor, but administrators promoted him to a top leadership position.

      The promoted doctor was the high RVU guy.

    2. SpringTexan

      The same parent outfit — note, this is also a “not-for-profit”, haha — is having problems in a Missoula hospital they took over, with many doctors leaving: http://missoulian.com/news/local/article_d7015284-5241-503e-ae03-1da1690008f0.html
      “As physicians at Saint Patrick Hospital, we are deeply concerned by recent events that directly affect our ability to provide high quality care to patients of Missoula and the surrounding communities of western Montana,” the letter read.

      It went on to state that there has been a loss of local organizational autonomy and governance at the hospital, which is part of Providence Health and Services, the Seattle-based, not-for-profit organization that operates hospitals and clinics across five states.

  5. Larry

    Another in the series of “How do they live with themselves?”. Non-profit leadership is principally interested in enriching themselves personally and their reputations generally. You don’t get to be a big muckily-muck by staying the course and running an efficient operation. No, no. You need to build ostentatious and modern buildings. Launch aggressive and highly public programs. And to pay for it all you must throw your mission under the bus. This article perfectly illuminates that with the perks that senior leaders who trash the mission receive. Heaven forbid they give up their maid or a quarter of their six figure salary in the name of the mission.

  6. Chris M.

    Nice to see that tax-exempt non-profits are putting profits first. Mayo definitely isn’t alone. Places like Mayo and Cleveland Clinic have many levels of service. If you are wealthy, a VIP or know the right people, you get premium care, the best rooms, the best care, short wait times and quick appointments with their best specialists. Lesser people have to stand in line and take whatever they can get. It’s kind of like the old Soviet Union. And it wouldn’t even bother me except these are tax exempt organizations and, thanks to ACA, give out much, much less free care than they used to. Seems like the least they could do is keep their discrimination quiet and not rub it everyone’s face.

  7. DH

    Another example of the private-public multi-headed schizophrenic hydra of the US health care system. “The private sector and markets will solve our problems” until it starts behaving like a private sector market, in which some pigs are more equal than others which is counter to ethical demands for everyone to be treated equally.

    This is a fundamental social contract question that has not been answered to date. Is the medical sector truly a “private sector and market” that accepts patients with government insurance or is it a highly regulated public market that happens to have some private suppliers and insurers providing services within it. From everything I see, it is the former in the US and the latter in Canada.

  8. Gordon Cook

    I wish I had seen this back in December. At that point in time I began to wonder about going to the Cleveland clinic for my current chronic problems. I actually purchased Medigap insurance before the December 7 expiration in order to make doing this possible. My communications with Cleveland over the next six weeks were absolutely bizarre and basically they fit the kind of insurance related situation questions discrimination etc. that people have detailed here. Ordinary non-wealthy people need not apply. I could be more specific but choose not to because I have enough other concerns that I don’t want to have my time taken by any outside inquiries as to who said what when.

    Many thanks and buyer beware

  9. YassirYouBetcha

    Yves,

    As a retired Minnesota doc, I admit to being deeply conflicted about Mayo. Though not trained in the gopher state, the final three-quarters of my career was spent here. Over four decades there were hundreds (at least) of patients whom I referred to and/or shared with dozens of colleagues in Rochester. Almost without exception, those colleagues, surgical and non-surgical, female and male, native-born and foreign-born, were startlingly brilliant and incredibly talented. My patients invariably benefitted from these virtuosos, whose abilities far outstripped my own modest skill-set. I remained on what appeared to be good terms with all these consultants over the entire span of time.

    That said, over the same four decades, the institution which these medical paragons served seemed to evolve from a shining city on a hill to an increasingly aggressive and pitiless competitor. The institution finally became, at once a national treasure and a feral competitor. A comparison to Microsoft in its most belligerent days would not be too extreme. To quote Tolkien, “It does not do to leave a live dragon out of your calculations, if you live near him.”

    Once upon a time, a person much wiser than myself told me (and here I paraphrase) that for millennia the science and art of medicine was a priesthood. She added that for a few centuries it was a guild and then became, quite recently, a profession. Alas, we clearly have moved on to something else. A corporatism? A bleg? I don’t think we are going back.

    Best regards, Yves. Thank you for remaining a reliable beacon in a foggy world.

    YYB

  10. John S

    …a year ago I had “a heart event” and was being transported to the ER by the paramedics….I live in Orange County, CA, where there are lots of hospitals….it was the DAY AFTER THE SUPER BOWL and every ER was “Closed” due to the overwhelming number of people, who were waiting to be treated for flu symptoms. This is a yearly phenomen as people (1) put off getting treatment because they want to watch the Super bowl and (2) people, who gather to watch, invariably get sick and head to the ER for treatment…..

    All of the above I learned from the paramedics, who were calling the hospitals to get me admitted and the driver was sort of heading in different directions in case a call landed me a spot…..

    I had “stabilized” and told the Paramedics to emphasize that although I was on Medicare, my supplemental insurance was a PPO through my wife’s Fortune 50 Company………Hurrah! I was accepted by a nearby hospital immediately and was not dumped in the waiting room with the flu patients, but put in a ER cubicle to minimize my chances of catching something which would exacerbate my COPD …..

    I have no idea where a non-PPO patient would have been taken……Riverside or Arizona, perhaps?

    1. Hoonose

      EMTALA dictates – to the closest ER that has the capability of handling your medical emergency. Ability to pay does not come into play.

  11. PKMKII

    Also doesn’t help that too many boards have bought into the “More pay=better executives” kool-aid. So they assume that if they don’t shell out millions in salaries and perks, they’ll end up with bad management, despite all evidence to the contrary.

  12. Watt4Bob

    The crapification continues;

    I grew up in Rochester in the 1960s and 70s, and my family was served by the Mayo Clinic.

    As I understood it, all residents of Rochester were automatically Clinic patients.

    At that time, one’s first visit to the clinic was with a financial office, which examined your finances, and on a sliding scale, explained what your portion of the billing would be.

    My family had seven kids and a very low income, so the clinic decided that our responsibility would come to $10/Month!

    Between doctors appointments and ER visits I’m sure our bill much grew faster than $10/Month, but so long as you paid the amount stipulated, there was never a complaint, and never any delay in receiving medical attention.

    If however, you didn’t pay your $10/month bill, there was immediate notification, and demand for payment.

    The care my family received was superb, the price was negligible.

    That was then, this is now, and apparently, things have changed.

    Very sad development.

  13. mle detroit

    I just spent an afternoon in Lakeland, Florida, and noticed the local hospital’s many billboards announcing *and Mayo Clinic.* Brand Extension 101, I guess. Sorry about that, Lakeland.

  14. Synaesthesia

    You do realize that Medicare reimburses doctors and hospitals like 20 cents on the dollar compared with commercially insured patients for the exact same billing codes. Medicaid reimburses even less than that. Oftentimes what they reimburse is BELOW the cost of actually providing care. And Medicare has the most Byzantine, time consuming paperwork/games/hoops that must be completed to get their meager reimbursements.

    Of course these hospitals are trying to improve their “payor mix”, i.e., attract more commercially insured patients and pass the Medicare/Medicaid patients off to some other facility. If Medicare increased its rates to be comparable with private insurance, simplified billing and stopped hassling providers with mountains of required documentation, hospitals and doctors would fight over who gets the patients. As long as the commercial patients subsidize the Medicare/Medicaid patients, not so much.

    1. Joey

      Does not sound right. I understand Medicare pays about 80% compared to insurance but may vary by service. But they make up with volume :)

      1. financial matters

        Yes, most hospitals, physician groups wouldn’t be able to give up Medicare entirely. Private insurers have slowly been lowering their reimbursements using Medicare as the standard.

        Ideally, Medicare, and extending into single payer would be the best and only payer on the block. This would take a critical look at both administrative and medicare care costs, pharmaceutical industry, cost of education for medical professions, etc.

        It would take a strong deal maker who also was interested in the best interests of the users of medical care.

        1. Hoonose

          Medicare reimburses us docs in primary care who have kept up with technology adequately. Surgeons not so. Specialists do more and get less per encounter. But very few docs still get rich off of Medicare. The ’80’s are long gone!

          Hospitals do well enough. In most cases as they can work to pile on more outpatient testing where they get much larger reimbursements per encounter than I the private doc.

          If hospitals are to be seriously crimped by Medicare, this is where CMS will push. IMO of course.

  15. Midwest

    As others have said, the problem with Medicaid is that reimbursement in many cases doesn’t cover the cost of care, even for a medical system as famously efficient as Mayo Clinic. A system must offset the loss from this population with profits from the privately insured. As a nun who ran a hospital in my town once said, “No money, no mission.” I can remember a doctor in southern Iowa who would take Iowa and Illinois but not Missouri Medicaid, because the reimbursement was so low. Sad to see this happening to Iowans.

    Private Medicaid=more money for a middle man, less for providers.

  16. Linda Kwiatkowski

    I am a 50 year old woman who dedicated my life to being a surgeon. I dealt with Medicare and Medicaid although they were difficult to deal with and didn’t pay as well as most private insurance. I recently became too ill to practice anymore. I had insurance for this, but that insurance required that I apply for Social Security. I was approved, and in doing that, I became eligible for Medicare. My illness was somewhat unusual and difficlult to diagnose for two years in NM where I lived and worked, so I had gone to Mayo and they were able to provide a diagnosis. I had most of my illness managed locally, but recently I developed another strange problem. I tried to make an appointment at Mayo and was told I could no longer be seen there because now I have Medicare insurance. I said I would just pay cash. They said no, the mere fact that I was eligible for Medicare allowed them to refuse care to me. They said had I not been a “new” patient it would have been ok, with “new” meaning being seen more than 3 years ago. However, I had tried during that time to get an appointment at least once, and was put off for some reason as well.
    I do not see how in the case of a large center of supposed medical excellence, that may be the only place one can go in this country to see a specialist in the area of a specific autoimmune disease with neurologic involvement, an entire segment of the population can be denied care. They should at least have to let these patients pay at some cash price, because otherwise this is even worse than the pre-existing illness clause. At least with that, you could get care if you paid for it. In this situation, you are being denied care period. Additionally, it is just so ironic that the people who discuss this topic discuss it as though it is a problem of “poor” people who didn’t plan or wok hard to save money. Medicare is not for “poor” people, it is for disabled and older people, but nonetheless, if you put it to the old “how would I feel if I were in that guy’s shoes” test, you would see how disgusting and wrong it is regardless of one is poor or not. The greedy CEO is so morally corrupt that he has decided this is ok for civilized people to do as long as it is justified under the pretence of not being able to keep financially afloat otherwise. You can certainly find a way to fix the problem, maybe the high level administrators need to make a few million less each year, so that a doctor like myself, who has spent my life caring about other human beings, can now get care when I need it. If Medicare and Medicaid aren’t paying enough, then fight to get more money for these programs, but with all of the tax breaks large corporations, such as Mayo, are able to get, I see no reason they can’t take Medicare and Medicaid when I was able to take those patients as a doctor running my own business, and that was in NM, which had one of the higher uninsured rates in the U.S. We are so rapidly approaching more and more outright disrespect for other people. If every institution decides the way May has, not to take these patients, then we are saying it is just fine if these patients don’t get any care at all. For this reason, I believe that they are just going to have to be told either they take care of all patients, or they can’t take care of any.

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