Mayo says Medicare changes needed in Obama plan

Mayo Clinic
The Mayo Clinic in Rochester, Minn.
MPR Photo/Tom Weber

President Obama's speeches on reforming America's health care system frequently invoke Mayo Clinic as a model for the rest of the nation to emulate, but the Mayo Clinic doesn't support Obama's plan as it currently stands.

Mayo contends that there can't be any real reform unless Medicare starts rewarding systems that provide quality health care at reasonable prices.

When Mayo Clinic agrees to treat a Medicare patient, it starts losing money. Medicare is the federal government's health insurance program for those with disabilities and those aged 65 and over. It will cover you regardless of your income or health problems.

Peter Amadio, an orthopedic surgeon and member of Mayo Clinic's Health Policy Center, said for each Medicare patient Mayo treats, the federal government pays about 70 cents of every dollar the treatment costs.

"We have to find that 30 cents someplace else, either from cost shifting from private insurance, which private insurance rates go up, from donations from grateful patients to various sources," Amadio said. "However, we get the sources of our income, we have to do that to make the institution whole or else we'd have to close our doors."

Medicare reimburses different areas of the country at different rates. So while Medicare pays on average about $3,800 per patient in Rochester, it pays about $6,300 in Fort Lauderdale, Florida. That's because Medicare pays largely based on the number of procedures doctors order and the number of days patients spend in the hospital.

But more procedures and hospital time don't necessarily mean people get well. A Dartmouth College study found even after controlling for regional costs-of-living and sicker patients, Medicare enrollees in higher-spending regions like Florida weren't any healthier or lived longer compared to those in place like Minnesota.

Mayo contends that, while President Obama has talked about controlling costs, improving quality, and increasing access, the current proposals don't get the country any closer to those goals.

"If you look at the whole country and try to do this as one nation, you'll never get there."

Mayo says until Medicare reimburses regions based on how well patients do, the system will encourage parts of the country to overspend and over treat and ultimately will go broke.

Marilyn Moon, an expert on Medicare for the American Institutes for Research said while Mayo's goal is laudable, the nation doesn't have the tools to do it. She said it's best to go slowly.

"Because if you suddenly jump right into it and then you make mistakes and you deny people care that turns out to be good care, then you really are in a worse situation," Moon said.

But Peter Amadio disagrees. He said the tools already exist and experts know that when doctors work together in teams, as in Minnesota, the cost is less than in places where doctors work alone or with a single partner. He said that's because groups of doctors talk to each other and share their knowledge and coordinate care for individual patients rather than competing against each other.

"You end up doing less things to patients," Amadio said. "Why is that? It's not rationing. It's not ignoring what the patient wants, it's actually listening to what the patient wants and then providing that and not more than that and providing it well without mistakes, rework, complications."

Studies have also found when physicians spent more time with patients and involve them in the decision-making, patients tended to opt for less invasive and less costly procedures.

Former Minnesota Republican Sen. Dave Durenberger said Medicare needs to reward areas of the country that offer high-quality, low-cost health care and withhold rewards from areas until they improve. To do that, Durenberger envisions many Medicares based on geography.

For instance, the upper Midwest, which tends to offer high-quality, low-cost health care would be one Medicare program; parts of California, where cost is high and quality is low would be another. Durenberger said that would lead to more accountability.

"If you look at the whole country and try to do this as one nation, you'll never get there," Durenberger said. "But if you reduce it to geography, where people know each other, the doctors went to relatively the same medical schools; you're going to get a different outcome."

Durenberger said Medicare already has regional centers set up to handle administrative work and if there ever was a time when Medicare could make the step to multiple programs, it's now.

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