Come Together on Patient-Centered Reform

January 27, 2010 – 9:55 pm

In his State of the Union address, President Obama urged Congress to continue to push forward and find a way to come together on health care reform. If we don’t act now, health care costs will continue to rise and more Americans will not have access to affordable, quality health care. The urgency for the American people is real as more baby boomers reach retirement age; reform needs to happen in 2010.

Reforming health care in America will not become easier with the passage of time. The status quo is not sustainable, and Mayo Clinic remains firmly committed to moving forward with patient-centered reform.

We at Mayo Clinic encourage all stakeholders – government officials, patients, insurers, providers and employers – to work together to pass common sense reforms that provide quality, affordable health care for all Americans.

In order to truly bend the skyrocketing costs of health care, we believe that the government must reform the payment system and provide insurance for all.

We believe there must be two core elements in any successful reform measure:

  • Change the Medicare payment system to create incentives for doctors and hospitals to offer the highest quality care at the most reasonable cost, thus increasing the value of health care.
  • Coordinate basic, private insurance offerings and provide sliding-scale subsidies to enable all Americans to purchase health insurance.

Each major stakeholder plays a role in reform and must contribute something to the process – be it a patient making a commitment to a healthier lifestyle or a physician investing in interoperable health information technology for sharing medical records. We remain hopeful that lawmakers will come together to support reform legislation aimed at achieving high-quality, affordable care for all Americans.

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Keep Patient-Centered Reform Moving Forward

January 22, 2010 – 1:15 pm

Reforming health care in America will not become easier with the passage of time. The status quo is not sustainable, and Mayo Clinic remains firmly committed to moving forward with patient-centered reform.

We at Mayo Clinic encourage all stakeholders – government officials, patients, insurers, providers and employers – to work together to pass reforms that provide quality, affordable health care for all Americans.

A reminder of the current state of American health care:

  • Over 46 million uninsured Americans;
  • Skyrocketing costs – health care consumes about 16 percent of the gross domestic product;
  • Uneven quality and safety of medical care, with about 100,000 people dying from medical errors each year;
  • An increasing number of physicians closing their practices to Medicare and Medicaid patients because reimbursement doesn’t cover costs; and
  • Medicare’s imminent collapse. In 2011 – next year – the first baby boomers will qualify for Medicare. This marks the beginning of a huge influx of Medicare beneficiaries and will put significant strain on the program’s already precarious financial position.

Over the past four years, the Mayo Clinic Health Policy Center has convened more than 2,000 stakeholders – including providers, academics, medical industry leaders, businesspeople, insurers, political leaders and patients – for a series of events to help develop consensus-driven principles for reform.  Those recommendations include four cornerstones:

Create Value
Improve patient health outcomes and satisfaction with U.S. health care. Decrease medical errors, costs and waste.

Coordinate Care
Coordinate patient care services across people, functions, activities, locations and time.

Reform the Payment System
Change the way providers are paid in order to improve health and minimize waste.

Provide Health Insurance for All
Provide guaranteed, portable health insurance for all individuals, giving them choice, control and peace of mind.

We believe that the government has an important role to play in accomplishing two of these cornerstones – reforming the payment system and providing insurance for all.

Therefore, we believe there must be two core elements in any successful reform measure:

  • Change the Medicare payment system to create incentives for doctors and hospitals to offer the highest quality care at the most reasonable cost, thus increasing the value of health care.
  • Coordinate basic, private insurance offerings and provide sliding-scale subsidies to enable all Americans to purchase health insurance.

Each major stakeholder plays a role in reform and must contribute something to the process – be it a patient making a commitment to a healthier lifestyle or a physician investing in interoperable health information technology for sharing medical records. We remain hopeful that lawmakers will come together to support reform legislation aimed at achieving high-quality, affordable care for all Americans.

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High Value, Affordable Care Will Benefit All Patients

January 6, 2010 – 3:27 pm

The Mayo Clinic Health Policy Center offers the following commentary in response to a Jan. 6, 2010 article in the Washington Post, “Health bills would shift Medicare money to Mayo and other ‘high-value’ hospitals.” 

We feel the primary goal of health care reform must be ensuring that all Americans have access to high quality, affordable care.

Reforming Medicare payment to reward quality care will improve health care in all geographic areas because all providers will have an incentive to deliver what patients want: high quality care at the most affordable price.

Paying doctors and hospitals according to their ability to deliver the best results for patients is what we call “pay for value” in health care.  Paying for value isn’t just about lower costs; it is the quality of care (outcomes, safety and patient satisfaction) that a patient receives compared with the cost of that care over time.

Implications of language in Senate and House bills
Both the Senate and House have passed provisions that will begin to move Medicare toward a system that pays for value.  The Senate provision, introduced by Sen. Maria Cantwell (and supported by Senators from the Northeast, South, West, Northwest and Midwest) will help move Medicare in the direction of paying for value by creating a value modifier – which considers both quality and cost – for physician Medicare payments.

The Senate bill provides for a separate payment modifier that will, in a budget-neutral manner, pay physicians or groups of physicians differentially based upon the relative quality of care they achieve for Medicare beneficiaries relative to cost.  A similar provision passed the House bill creates a mechanism to better define value, measure it, and create new payment methodologies that reward it.

Do poor, urban patients equate to higher spending?
Some suggest that a pay-for-value system would adversely affect high-cost areas that treat poorer and sicker patients. However, treating poorer, urban patients doesn’t automatically translate into higher spending. For example, while Medicare spending in Los Angeles is more than 30 percent above the national average, Medicare spending is at or near the national average in Cleveland, Buffalo, Pittsburgh, Milwaukee and El Paso – all of which have substantial minority populations and median incomes that rank them far below Los Angeles. 

It’s not just cost; utilization matters
Significant evidence points to the need to pay for value.  A  December 2009 Medicare Payment Advisory Commission (MedPAC) report to Congress found a 30 percent variation in service use (i.e. office visits, tests, procedures) in patients with comparable health status. That means some care givers used 30 percent more services to care for patients with similar illnesses. In addition, in February 2008, Peter Orszag, as director of the Congressional Budget Office, reported that three previous studies of patient demographics and severity of illness found that these differences explained less than one-third of the regional differences in Medicare spending.  These data support the idea that payment systems must be changed from the “pay-per-procedure” model to a pay-for-value method, which rewards providers who deliver the best outcomes and safest care at the most affordable price.

Supporting Data:
Measuring Regional Variation in Service Use, MedPac, December. 2009  
““Getting Past Denial – The High Cost of Health Care in the United States,”  New England  Journal of Medicine, September 24, 2009
Geographic Variation in Health Care Spending, Congressional Budget Office, February 2008 

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Medicare and Mayo Clinic in Arizona

January 5, 2010 – 3:15 pm

Mayo Clinic in Arizona Continues to Provide Care for Thousands of Medicare Patients

Some recent media reports have inaccurately stated that Mayo Clinic in Arizona is no longer seeing any Medicare patients. This is not true.

Rather, a five-physician Mayo Clinic Arizona family practice clinic in Glendale, Ariz., has opted out of Medicare as part of a Mayo Clinic time-limited trial that will be reviewed at its conclusion. This means that Medicare will no longer reimburse Mayo Clinic for primary care services at this specific primary care facility, not at Mayo Clinic in Arizona overall. This affects only primary care office visits for the five Mayo family practice physicians at this site. Specialty care, laboratory services, imaging studies and ancillary services at Mayo Clinic are still covered by Medicare. Current Medicare patients may continue receiving primary care at the Glendale clinic but will be required to pay out-of-pocket for office visits.

Why?

Mayo Clinic loses a substantial amount of money every year due to the reimbursement schedule under Medicare. The discrepancy between what Medicare pays and our cost of providing services is particularly acute for our clinics that provide primary care. Due to these ongoing financial challenges, the five physicians at Arizona’s Mayo Clinic Family Medicine – Arrowhead in Glendale will no longer accept Medicare payments for primary care office visits. This is one of several options we are exploring to address the Medicare shortfall situation.

A Harbinger of Change

Mayo Clinic remains committed to serving Medicare beneficiaries, but we struggle to afford it. We continue to explore a variety ways to modify our practice to be able to serve Medicare patients. We are currently one of the largest Medicare providers in the country. In many ways, Medicare patients are Mayo Clinic’s ideal patients – they match the strengths of Mayo’s practice. Medicare patients are typically dealing with multiple complex health problems, which many people face as they age.

Nevertheless, decades of underfunding and paying for volume rather than value in Medicare have led us to this decision. Providers who do fewer unnecessary tests and services are paid the least, and they are the doctors and hospitals which will go out of business first if we don’t change the payment system.

That is why Mayo Clinic strongly supports health insurance reform and health care delivery reform. Health care delivery reform in the patients’ best interests means changing the payment system to reward value — defined as better outcomes, better safety, better service and lower cost. Better value results in fewer tests and decreased overall costs.

As leaders in Washington work on the final details of the health care reform plan, Mayo Clinic remains firmly committed to reform because the status quo is not sustainable.

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Mayo Clinic Encouraged by Senate Health Care Reform

December 22, 2009 – 1:06 pm

As leaders in Washington work on the final details of the health care reform plan, Mayo Clinic remains firmly committed to reform now more than ever.  As we’ve said before, the status quo is simply not an option. 

Much in the Senate Manager’s Amendment is aligned with our recommendations—including provisions to pay for value in health care, an insurance exchange, an individual mandate, subsidies for people to achieve coverage, and pilot projects on accountable care organizations and bundling of payments.

Senate leadership made a wise decision to drop plans to expand Medicare eligibility.  We also applaud the Senate for not pursuing a Medicare-like, price controlled public option.  As we’ve said, we must build health care reform upon what’s working… not on a failing Medicare system.   Read more.

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Senators express concern over proposed Medicare buy-in; Gawande on tackling the real issue

December 14, 2009 – 12:56 pm

Last week twelve senators expressed their misgivings over the proposed Medicare buy-in for Americans aged 55-64 in a strongly worded letter to Senate Majority Leader Harry Reid.  In part, they state, “Creating a Medicare buy-in program that reimburses providers at current Medicare rates and according to today’s payment structure will exacerbate the existing funding inequity.  Medicare is spending over one-third more for each Medicare beneficiary in some states compared to ours.  The combination of an antiquated payment formula that tends to penalize rural providers and greater medical efficiency in our states has forced many physicians to stop accepting Medicare patients or limit the number of Medicare patients they serve.  Increasing the number of Medicare patients under a buy-in proposal without fixing the Medicare reimbursement rate will further exacerbate this problem.” 

Also of note today, a new article from Atul Gawande in the New Yorker looks at complex challenges in America’s history and considers what will be required to solve today’s most pressing issue – addressing the nation’s soaring medical costs.  He concludes, “The task will require dedicated and talented people in government agencies and in communities who recognize that the country’s future depends on their sidestepping the ideological battles, encouraging local change, and following the results. But if we’re willing to accept an arduous, messy, and continuous process we can come to grips with a problem even of this immensity. We’ve done it before.”

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Providers Speak Out Against Medicare Expansion

December 11, 2009 – 5:11 pm

In a phone news conference this afternoon organized by the Mayo Clinic Health Policy Center, CEOs and other leaders from several health care organizations expressed strong opposition to expanding Medicare eligibility to patients in the 55-64 age range, urging that this proposal be defeated even if it means the health reform debate continues into 2010.

Listen to the full News Conference audio.

Among the participants were:

  • John Noseworthy, M.D., Mayo Clinic CEO
  • Dr. Denis Cortese, M.D., Mayo Clinic CEO Emeritus
  • Karl Ulrich, M.D., President and CEO, Marshfield Clinic
  • Rob Nesse, M.D., CEO, Franciscan Skemp Healthcare
  • David Barrett, M.D., President and CEO, Lahey Clinic
  • Andrea Walsh, Executive Vice President, HealthPartners
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Medicare 55-64 Expansion: Bad for Patients, Providers, Government

December 11, 2009 – 1:48 pm

Peter Amadio, M.D., a Mayo Clinic orthopedic surgeon, discusses the U.S. Senate proposal to make people age 55-64 eligible to purchase Medicare coverage, and why this proposal will make the health care system worse, not better:

Dr. Amadio will be discussing concerns of Mayo Clinic and other health care providers with Neil Cavuto at 4:20 p.m. EST today on the Fox News Channel.

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Medicare Expansion Won’t Get Us There

December 9, 2009 – 12:03 pm

Proposal Would Not Increase Access to Health Care Services or Control Costs

The current Medicare payment system is financially unsustainable. Any plan to expand Medicare, which is the government’s largest public plan, beyond its current scope does not solve the nation’s health care crisis, but compounds it.  We need to fix Medicare by moving it to a system that pays for value – quality health outcomes that are affordable over time – and ensure its success, before bringing more people into a broken system.

Expanding this system to persons 55 to 64 years old would ultimately hurt patients by accelerating the financial ruin of hospitals and doctors across the country. A majority of Medicare providers currently suffer great financial loss under the program. Mayo Clinic alone lost $840 million last year under Medicare. As a result of these types of losses, a growing number of providers have begun to limit the number of Medicare patients in their practices.  Despite these provider losses, Medicare has not curbed overall spending, especially after adjusting for benefits covered and the cost shift from Medicare to private insurance.  This is clearly an unsustainable model, and one that would be disastrous for our nation’s hospitals, doctors and eventually our patients if expanded to even more beneficiaries.

It’s also clear that an expansion of the price-controlled Medicare payment system will not control overall Medicare spending or curb costs. The Commonwealth Fund has reported this result for Medicare overall by looking at two time periods – one four-year period where Medicare physician fees increased and one four-year period where Medicare physician fees decreased.  Overall cost per beneficiary increased at the same rate during each time period. This scenario follows the typical pattern for price controls – reduced access, compromised quality and increasing costs anyway. We need to address these problems – not perpetuate them – through health reform legislation.

We believe insurance coverage can be achieved without creating or expanding a government-run, price-controlled, Medicare-like insurance model.

Mayo Clinic supports the proposed insurance exchange model based on the Office of Personnel Management’s Federal Employees Health Benefit Plan (FEHBP).  This system will improve access to insurance, make reforms to the current insurance system that eliminate pre-existing condition exclusions, and create an individual mandate where individuals can purchase private insurance in various ways:

  • Through employers,
  • On the individual market,
  • Through co-operatives, or
  • Through an exchange model like the FEHBP.  

 We also believe that the government should help people pay for insurance premiums through sliding scale subsidies as needed.

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A Perspective on Current Health Reform Issues

December 2, 2009 – 11:22 am

At this juncture, Mayo Clinic will neither endorse nor oppose entire bills in the House or Senate, but will continue to point out provisions that we think move the country toward patient-centered health care that improves access, quality and affordability for all patients.

While many provisions passed in the House and currently in the Senate bill are aligned with our recommendations—including provisions to pay for value in health care, an insurance exchange, individual mandate, subsidies for people to achieve coverage, and pilot projects on accountable care organizations and bundling of payments—Mayo Clinic remains concerned about a “Medicare-like” public option.   Read more.

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