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Head of Mayo Clinic describes plans for 'destination medical center'

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Mayo Clinic president
Dr. John Noseworthy, president and CEO of the Mayo Clinic, announces a $5 billion proposal to build what the health provider is calling a "Destination Medical Center" in Rochester, Minn., and surrounding communities, at a news conference at the State Capitol on Jan. 30, 2013.
MPR Photo/Tom Scheck

Mayo Clinic announced plans today to invest $5 billion over 20 years in Rochester and surrounding communities to build what it describes as a "destination medical center."

The Rochester-based health care provider is also seeking more than $500 million in state funding to develop the area's infrastructure.

Mayo Clinic president and CEO John Noseworthy announced the plan alongside Gov. Mark Dayton on Wednesday at the state Capitol. MPR's Tom Crann interviewed Noseworthy soon after the announcement.

Tom Crann: Many people already think of Mayo as an international destination for medical care over the years. What's different about this plan today?

John Noseworthy: We are, and thank you. We're the leading brand, if you will, in medicine globally, and we have the largest practice of national and international practices in the world. We want to defend and grow that going forward because our competition is going after this market.

Crann:  This is a tough competitive environment for health care?

Noseworthy: It is absolutely. And the leading competitors for national and international patients in this country are seeking to copy the Mayo model and invest in their destination medical communities and centers.

Crann: What are you asking from Minnesota taxpayers?

Noseworthy:  What we would like from Minnesota taxpayers is the agreement that as we grow, and as we've proved that we grow, that some of the tax revenues that come from that growth will come in to support the public infrastructure to help Rochester grow to support the practice.

Crann: What specifically are we talking about?

Noseworthy: In order for us to make that investment, we need to know that there will be public infrastructure, roads, bridges, sewers, parking and an opportunity for the hospitality industry, retail, medical research, business growth and so on, to land here and to develop here. Without that, we probably shouldn't do it.

What will happen as this evolves over the next 20 years with the $3 billion investment from Mayo Clinic and $2 billion to $3 billion from the private sector, we anticipate growing approximately 25,000 to 30,000 new jobs in Minnesota, about a $3 billion growth in taxes to the state of Minnesota. And we're asking for some of that to be allocated for state-funded, public-funded infrastructure to support this growth.

Crann:  What are we talking about &dmash; put a dollar amount on that.

Noseworthy:  It's about a 10 to 1, private to public payout once we have grown. Crann: As you know, at the Legislature there's a lot of competition for funding. What is your argument for the return for Minnesota taxpayers for this investment of $500 million?

Noseworthy:  We are not asking for a handout. We're asking for nothing upfront. We're not asking the state to fund the medical facilities, the science facilities and so on as other states are doing for our competitors, by the way. We're simply asking for, once we have grown and proven that growth, to have some of that tax revenue infused into the public infrastructure.

Crann:  Will this put Mayo at an unfair competitive advantage in this very competitive health care world with other larger systems within the state - Allina, University of Minnesota, with whom you have some partnerships? Does it make Mayo the state-favored, in effect, official health care system?

Noseworthy:  I don't think so at all Tom. As you know, and as your listeners know, Mayo Clinic is the largest private employer in the state. We are responsible for 70,000 jobs and $9.5 billion in revenue to the state. We are the only truly national practice of medicine in the country, outside of the state notwithstanding. So because we have established this over a hundred years, this will help grow additional traffic to Minnesota and that will benefit the entire state.

Crann:  There's been talk of an expansion of Mayo Clinic in the Twin Cities, specifically the Mall of America. Where does this larger plan leave those plans for expansion?

Noseworthy:  We have no plans to expand into the Twin Cities at this time, but I'll tell you, in this competitive environment, Mayo Clinic needs to decide where it's going to make its investments. Other states would like us to make them in those other states. We have to decide where we're going to put $3 billion, where are we going to invest, and we're looking for a partner to help us do that.

Crann: There has already been some reaction from the Legislature today, including one Democratic lawmaker who's saying with any proposals like this, we've got to look and make sure that it's the right thing, the right benefit for the investment for the state of Minnesota. Do you expect this to be a tough sell?

Noseworthy: I don't think so. This is complex, but I think once the Legislature sees the bicameral, bipartisan support — we have the support of labor and business — and once they realize that this is a pay only, a value capture only after we show our growth. We're not asking for the hand-out. This will grow the state of Minnesota's economy unlike anything else that we currently have in the state. This is leveraging that, as I say, with a ten-to-one private-to-public expenditure, so this is a very good deal. I believe the state Legislature will be excited about this once they understand the innovative funding model. 

Crann: Your plan also mentions establishing medical centers around the world. Other renowned health care institutions that are mentioned in your peer group, Mass General, Johns Hopkins, they've exported their care models. Does this mean that Mayo has chosen to focus on Minnesota and Rochester and not do that?

Noseworthy:  We don't have any plans, Tom, to build new facilities overseas, but what we are doing across the nation with our Mayo Clinic care network, and what we'll be doing soon internationally, is sharing Mayo-vetted knowledge to help doctors and patients get better care in their communities. We'd rather export our knowledge than build new facilities.

Crann: We're talking here about, between Mayo and public and private expenditure, about $5.5 billion. What does that mean specifically for the Mayo Clinic in terms of facilities and expansion in Rochester?

Noseworthy:  We want to remain at the cutting edge as health care expands, as we understand more about biomedical research and how to bring that to our patients. This is all about bringing cutting edge care to our patients, our patients in Minnesota, in the upper Midwest, nationally and internationally. 

Currently, patients come to Mayo Clinic from over 100 countries and all 50 states every year. They already pour into the state. We simply want to stay at that cutting edge to provide them with the best care and a supportive community for them.

Crann: Are you talking here about bigger hospital buildings? What does it look like?

Noseworthy: Well, it depends on where medicine goes. There'll be new technologies. As you know, we're building a proton-beam therapy program at the moment. We're building out our healthy living center. We're remodeling the hospital at St. Mary's Hospital. We'll need to see where we need to go, depending on where the industry goes. 

Crann: This is an ambitious 20-year plan. Ideally, what does the downtown core of Rochester, with Mayo Clinic, what does it look like if this all goes according to plan?

Noseworthy:  Well as you would expect, Mayo Clinic and Rochester have a master plan that goes out over decades, and we've worked very closely with city leaders to align what we believe, in a directed, purposeful manner, what would be the best thing for the downtown core. This will be thoughtfully planned out and delivered to meet the needs of the citizens of Rochester.

Crann: You mentioned infrastructure improvements for the public funding part of this. What are you talking about, bigger airport or a high-speed train from the Twin Cities? What are we talking about?

Noseworthy: All of those things will be considered, but roads, bridges, parking, sewers and whatever form of transportation is currently needed five to 20 years from now. Who knows? Light-rail would be great. We have an international airport there, but that'll need to be upgraded as more private money, more private investment in hotels and retail and so on come to Rochester.

Interview edited and transcribed by MPR reporter Madeleine Baran