By Mathew Keller, RN JD
Regulatory and Policy Nursing Specialist
Regulatory and Policy Nursing Specialist
A recent statement by the Mayo Clinic’s CEO John Noseworthy, as reported in the Star Tribune, speaks volumes as to the true status of healthcare in America: those with the money get the care they need, those without, get something else. As Noseworthy put it, “if [a] patient has commercial insurance, or they’re Medicaid or Medicare patients and they’re equal…we prioritize the commercial insured patients enough so … we can be financially strong at the end of the year.”
A Mayo spokesman went on to say, “We can provide the care they require for complex medical issues. 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.”
There’s something fundamentally wrong with a healthcare system, especially one as vaunted as the Mayo clinic, that bases the care patients receive on their ability to pay. Unfettered capitalism simply has no place in healthcare—is there any limit to the amount you would pay to stay alive? To keep your spouse or children alive? When it comes to healthcare, the patient seldom enters into the hospital room as an equal partner to the transaction, able to shop around for the best prices, negotiate, and otherwise operate as a wise consumer. The average patient typically has zero leverage. In healthcare, it’s take it or leave it, and leaving it often leads to horrendous consequences.
The Mayo Clinic and other healthcare institutions would have you believe that they’ve been forced to such measures due to the expansion of Medicaid under the Affordable Care Act. The numbers show otherwise: hospitals are saving enormous sums of money on reduced need for charity care as well as lowered bad-debt write offs, to the tune of $43 million in Minnesota between 2013-2015 alone. The patients who are now covered by Medicaid were the patients who formerly needed charity care, or who simply could not afford to pay the bill. The Mayo Clinic itself “saw charity care costs decline by 14 percent, or $11.4 million, between 2013 and 2015.”
Even as Mayo’s charity care costs declined due to the Medicaid expansion, it pulled in eye-popping sums in excess revenues: $579 million in net income over the last two years for which financial disclosures are available. This is a corporation that holds nearly $10 billion dollars in assets. Indeed, Mayo is doing quite well on the financial front, and so is Noseworthy. He pulled in a cool $2.3 million in reportable compensation in 2014, a 42 percent increase from 2010.
And yet, Mayo would have you believe that it can’t afford to treat Medicare/Medicaid patients equally to private insurance patients. But the vaunted clinic might be in for a reckoning—under 42 CFR 489.53 (a)(2), discriminating against Medicare patients is grounds for termination of participation in the Medicare program. That would be a big hit for the Clinic, which receives about 50 percent of its annual $3.2 billion in revenue from the Medicare and Medicaid programs.
It also stands to reason that an institution that receives hundreds of millions in tax breaks as a non-profit institution deserves to have that status scrutinized if it turns its back on its charitable origins and the community of patients who need care the most.
As the brothers who founded the clinic roll in their graves, Mayo would do well to remember that its mission, “providing the best care to every patient,” and its primary value, “the needs of the patient come first,” have no caveats for “only if they can pay.”
At the very least, the Minnesota legislature should consider taking a second look at the $585 million in public funds it earmarked for Mayo’s destination medical center. Perhaps those funds ought to be contingent on Mayo serving publicly insured patients on an equal basis to privately insured patients.
Excellent commentary. The discussion seems to center around the high-profile Rochester operations. But consider Red Wing, where Mayo bought the hospital from Fairview, seems to have, pursued a de-facto monopoly on medical care in this part of MN, and now says Mayo is too good for significant segments of our local population????
In my opinion, the “DMC” scam was as offensive in its own way as the football stadium scam. Over half a billion $ focused on helping Mayo attract wealthy foreign patients, and not a word about improving health care for Minnesotans. No wonder so many people don’t care for the Legislature and the Governor. They may not think it through analytically, but they sense something hugely amiss.
I have always been deeply troubled by the fact that Medicaid/Medicare expect a modicum of subsidization from paying customers. These socially important programs should stand on their own and should not require medical professionals to do a complicated balancing of how many of each kind of patient they can afford to treat. It seems to me that whatever medical insurance package Members of Congress have voted for themselves should be the yardstick by which all Americans receive care That Noseworthy thinks that his compensation package somehow makes him competent to limit the treatment which others receive is contemptible, at best.
I would have to imagine that Mayo Clinic is not the only institution that practices like this. I am sure that every clinic/hospital does. Just once again, Mayo’s name gets plastered all over with all the negativity. You cannot stay in business if your customers/insurance don’t pay – plain and simple.
This man probably was fired by Mayo
I agree with both previous comments. I am on Medicare and go to the Lake City Mayo. I’ve been there for quite a few years seeing the same Nurse Practitioner who has been fantastic. She has always taken the best of care of me,is very punctual, and very professional. When I see my bills and see that Medicare has reduced my payments excessively in some cases, I wonder, how do they stay in business this way. The answer I believe is to raise the cost of other patients to compensate. And why do the politicians get nothing but the most extravagant care to be had (at our expense), and they dictate to us and the health care systems what we are allowed?
I think you have an extremely narrow point of view on the article and video. The reality of healthcare or any business is to be financially stable in order to serve its customers or patients. How does a hospital do that without making the hard choices? Government reimbursement for procedures or visits pays less than what the cost is. How do you fix that?
What solutions do you have to solve payer mix? Or do you just enjoy pointing out problems without solutions and writing gotcha articles?
You’d think MNA would be partners with hospitals in this. You would think that everybody with common sense would be appaled at the thought that commercial/private insurers need to subsidize government insurance just to “make the system” work.
MNA is standing to come out looking pretty foolish publishing an article like this. The system is indeed broken, but to paint Mayo as the bad guy is flat out absurd. They didn’t invent a system where they take an operating loss on every government-insured patient they treat. How about pointing the blame at the law-makers (and voters) where it belongs?
After 13 years of continuous care at Mayo Clinic for multiple serious health issues, when I moved back to Minnesota from Scottsdale, they dropped me – refused an oncology appointment and just never made the appointment with Opthamology. A person in their billing department told me most of Rochester’s doctors now refuse Medicare patients. So, they milked my employer provided insurance for everything they could get and then kicked me to the curb. They need to remove their so-called motto, “The needs of the patient come first.” The good news? The world is full of incredible, talented, caring Doctors who provide outstanding care and accept my insurance. Mayo Clinic has forsaken their mission and I am not interested in physicians who every decision is based on financial considerations.
What happens if Mayo has to close there doors? If you don’t make money you can’t provide best in world care and attract top staff with good paying jobs. i have been a patient at Mayo for 23 years. I travel from Pennsylvania to be treated for cancer and actually enjoy the staff at the clinic, they are the best. The public should look at medicare reimbursement to actually see how little the Clinic is reimbursed for care. In some cases it’s 20% or less. I look at the medicare statements. It’s easy for the government to exist just raise taxes; that isn’t an option in business. Dept of health services should do better analysis of cost and reimburse accordingly.
Gonna go out on a limb here and speculate that Mayo is not in any imminent danger of closing its doors. Just sayin
It really doesn’t matter to me if they close as they have declined to see me since I went on Medicare last year. I would hate to see Minnesota lose this world class medical facility, but they will lose that edge quickly now that money is their focus. Thankfully, the are outstanding facilities here that provide world class care and seem able to do so for Medicare patients
Oh, I don’t think they will go out of business, but once your business model focuses on cash, your soul is gone, so we won’t be missing much
I’m glad the Star Tribune published those comments. It’s a conversation that is lacking in the overall healthcare debate. Every hospital wants to see more private insurance vs Medicare/Medicaid. Payer mix is an important issue for hospitals. If a hospital only served people with government insurance they would go bankrupt. An organization can’t perform it’s mission if it is financially insolvent. Also, Mayo wouldn’t turn anyone away that comes to its door.
Yes, Mayo, did turn me away, when I switched to Medicare after years of receiving care from them
I just realized/remembered that MNA is the state nursing UNION! NOW I realize why they want to pile on this ridiculous narrative. They’ve always hated Mayo because Mayo doesn’t force their nurses to join MNA/pay member dues.
Mayo Clinic has treated my family the same when we had insurance through my employer of 11 years and when I returned to school as an adult learner for 2 years and had to go on state sponsored insurance.
The disturbing part of medical services in MN is the inequality of high premiums and high co-payments to the majority (98%), while the 2% have high income and excellent insurance coverage, they never have to make the hard medical choices for their families based on low-income and pathetic coverage! Oh, not to mention the billions of dollar SURPLUS the state is currently hoarding. SMH. It was cheaper for me to “pay the penalty” for being non-insured this year and pay out of pocket for a Fast Care visit and an annual check-up, then to have to pay high premiums for horrible healthcare insurance. Our government is corrupt!!!
Hospitals and clinics all across the country deal with the payer-mix (private-insurance/Medicare) and resort to cost-shifting measures to balance their budget. Instead of opportunistic blogging and fueling misinformation, MNA would be more helpful to discuss health care reform, e.g., single-payer insurance. The nurses at Mayo Clinic are wise to not have MNA for a worker/nursing union.
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