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U should separate from Fairview and hook up with Mayo

U should separate from Fairview and hook up with Mayo
University of Minnesota
Proposal: The medical schools at the University of Minnesota and Mayo merge and become a single institution with campuses in Minneapolis, above, and Rochester.

We knew it was coming sometime, and Dr. John Noseworthy finally said it on Tuesday: “We’re never going to leave Minnesota, and we don’t want to leave Minnesota,” but “we’ve got to decide where we’re going to put the next $3 billion,” and emphasized that “there are 49 states that would like us to invest in them. That’s the truth.”

Obviously there is much at stake. Mayo Clinic is Minnesota’s largest private employer and its economic impact is felt throughout the state, especially in Rochester. Minnesota’s reputation as a leader in health care and medical technology depends in part on having Mayo within the state.

It will be easy for policy makers in St. Paul to be distracted by actual and perceived threats, large numbers ($500 million just for Rochester?) and economic impact estimates flung around by all sides. Things will be made worse by the fact that we’ve just finished a whirlwind week involving the state attorney general, Sanford Health, Fairview Health Services, University of Minnesota Medical Center, and feelings at the Legislature and in the business community are still raw.

Clear goals

We can minimize the effects of these distractions on our long-run economic health by clear goals for any state involvement in Mayo’s expansion, in particular, and for thinking about changes that are certain to come in Minnesota’s health care and medical technology industries.

First, we should maintain and foster a high-quality health care system for Minnesota residents, one that both promotes lifetime wellness and attacks of illness and disease. Minnesota’s human capital stands on this foundation.

Second, public policy should nurture a world-class medical sciences community working on both basic research and applications in treatment and technology.  

Third, we have world-class medical clinics that attract patients from throughout the world and public policy must foster their continued growth. Medical sciences and medical clinics have direct economic effects in terms of output and employment and have multiplier effects due to spinoffs and smaller businesses that serve larger firms.

Fourth, to complement the first three goals, we must preserve and improve our world-class medical education institutions.

A road map

These should be our public policy destinations. How do we get there? Here is my road map.

The first step is to separate the University of Minnesota’s Health Sciences from Fairview. This will allow Fairview to pursue any mergers or combinations that improve its ability to provide high-quality medical care to Minnesotans without the thorny issue of who controls the University’s medical center.

The second step is to foster closer ties between the University of Minnesota and Mayo Clinic. My specific proposal is that the State of Minnesota, the University of Minnesota and Mayo Clinic enter into an agreement in which the state will finance infrastructure on the scale that Mayo requires in order carry out its $5 billion Rochester expansion. In return, Mayo and the University will do the following:

  • The medical schools at the University of Minnesota and Mayo will merge and become a single institution with campuses in Minneapolis and Rochester.

  • University of Minnesota-Twin Cities health sciences programs will merge with those at University of Minnesota-Rochester. The latter are already collaborative programs with Mayo, and thus the merged program can leverage these connections.

  • University of Minnesota Hospitals and Physicians will join with the Mayo Clinic Health System to create a network of clinics both within Minnesota and in other states.

Mayo Clinic and the University of Minnesota share deep historical ties. In 1915, Drs. William and Charles Mayo founded the Mayo Graduate School of Medicine, affiliated with the graduate school at the University of Minnesota. This relationship continued until 1983, when Mayo Medical School became an independent institution. William Mayo served as a university regent for 32 years and Dr. Charles Mayo was a professor of surgery. The Mayo Memorial Building at the university is the official state commemoration of Mayo’s importance to Minnesota.

This is a win-win for everyone in Minnesota. We will have stronger medical education programs, both in medicine and in the health sciences more generally. We will promote better health care both through the U of M-Mayo collaboration and by allowing companies such as Fairview to grow and prosper. And all of these combinations will work with new and existing medical technology companies and foster continued innovation in biotechnology.

Let’s think big and not get lost in the minutiae.

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Comments (12)

Great idea

This is too practical too sensible and too timely to work in today's political climate.

What?

Why do these economist always think mergers and acquisitions are the only solution? There's no practical advantage of any kind to combining the University Medical school and Mayo. Bigger isn't necessarily better. Both institutions currently have robust programs, and they train at the same hospitals anyways. While undoing the Fairview merger might make some sense, converting Fairview into a for-profit hospital system will never make sense for the patients of MN.

But you know, as far as I know, no one has clearly stated what exactly is the problem everyone is trying to solve here? Why was Fairview trying to sell itself to Sanford in the first place? What is the problem at the U.? Everyone's got ideas but no ones identified the problem.

U and Mayo Possibly Makes Sense

Merger or acquisition is not needed. A hospital management contract and a cooperative education agreement between Mayo and U would probably be sufficient. It would also give the state a guarantee of Mayo's main focus staying in MN in exchange for the Rochester infrastructure investment. ($500 million invested in the City of Rochester over 20 years is not that much when compared to building five sports stadiums in the TC the last few years at a total public cost well over $1 billion. In 20 years the teams will probably want new stadiums again based on their past history, but Mayo's and Rochester/MN's infrastructure investments will still be used and generating good spin off jobs.)

You raise important questions about what the problems were/are at the U and Fairview. I don't know, but I suspect what the U was looking for from Fairview was hospital management experience and complex case referrals. Given the recent Fairview Accounts Receivable collection efforts and controversy, I suspect Fairview is looking for a partner(s) with deep pockets and Sanford wants access to the Twin Cities market and maybe to the U Med School. I hope MinnPost reporters and the AG investigate your questions and uncover the actual reasons.

The U and Mayo working together is worth serious consideration. Just on the face of it Mayo and the U look like a better deal for MN than the U taking over Fairview, especially if Fairview has financial problems. The state will probably do a deal with Mayo/Rochester in any event, so why not get a much bigger bang for those bucks?

Yes, healthcare is the savior

Yes, healthcare is the savior of Minnesota's economy--no worries there, eh?

It'll be just like having a Saks or Bloomingdales right in town.

All you need are enough paying customers.

Have any of these people reconciled the unaffordable nature of modern healthcare and the irony of building our future economy around that which is clearly unsustainable?

Dump Fairview

Fairview has been a disaster for the University, which should have remained independent, but I guess money motivates, and not always for the better. My experience of the U medical facilities since the Fairview takeover is that they have declined, most obviously in the area of cleanliness, which is itself a telling indicator. Doctors have expressed deep regrets at the association, and the nurses from the U felt flat out betrayed by their "sale" to Fairview. No, Fairview has meant only one thing: money in the pockets of the CEO, CFO, and others NOT directly connected to health or care. So would an association with Mayo be better. For me, and the uninsured like me who don't really make enough to by insurance, it will make no difference at all. What would make a difference is taking the capital spin out of healthcare and returning the power of the medical practice to the doctor.

I don't want to say great minds think alike

but apparently economists do. I was wondering the same thing yesterday.

This is certainly worth exploring.

Tends to sound good, but...

...I'm wondering if these organizations are really compatible enough for an integration of institutions and staff, as suggested, to be successful.

Then there's the issue raised by Paul Udstrand above - what is the clearly stated problem that all these solutions are seeking ?

If the problem is Fairview, then disconnect from Fairview. Whatever chicanery Fairview is up to (does anyone really know?) can be done on its own without the entanglement of a U of M asset. Go ahead, Fairview, have a ball !!

It seems to me that the 3rd proposal, "University of Minnesota Hospitals and Physicians will join with the Mayo Clinic Health System to create a network of clinics" has very deep and very wide practical problems - of systems, business processes and practices, business goals, value systems, governance, even down to compensation issues, which would have to be ironed out across the 2 organizations. What a headache !

And is there any reason to suppose this will result in a system which offers patients new advantages, new benefits, new economies, better treatment ? Or is that beside the point ?

Great idea

This is the best idea I have heard in years. Merging the medical schools would not be much of a problem. But there are vast differences in the cultures that underly how medicine is practiced at each institution. Realigning the University hospital using the Mayo model would be a challenge, but the benefits for patients would be huge.

Furthermore, introducing the Mayo model in the metro area would be an enormous stimulus for the state economy.

I just hope there is a politician who would be willing to promote this idea.

Mayo

There is an assumption that Mayo would buy into these proposals which there is not clear reason for them to do so and inherit problems not of their doing and the drastic cultural differences between the 2 institutions would never work. People think mergers are just a matter of signing the paperwork and everything is seamless. Cultural integration of organizations can take decades and in the mean time disrupt all organizations involved. The U has no business being in the business of running a hospital. Hospitals are becoming more a more complex business both clinically and administratively. They have a full plate already and do not need another headache.

Mayosim

I also just have to say, everyone is all ga ga over Mayo but we have plenty of good hospitals. Mayo brings nothing to the Twin Cities that isn't already here except maybe some experimental treatments. Mayo is a certainly a good hospital but there's no good reason to let them take over the state. And this business off combining med-schools is far far far more complex than people here seem to realize. For one thing, we already have a lot of collaboration with med schools. You know for instance that both Mayo and U. med students do their residencies at the VA right? As well as at other hospitals. Seriously the 90s called and they want they merger mania back. Before you cram two med schools together you might want to find out how med schools actually function in this state.

Now if someone wants to fix Fairview let's talk about fixing Fairivew. But first we have to decide what we're fixing and why? People don't seem to realize that U. had a hospital on campus for almost 100 years before they merged with Fairview. Why does everyone think the only people in the world who know how to run a hospital are the guys asking for $500 million down in Rochester?

Why do people think it's better to have one premier research and teaching hospital in the state than two?

Again, why?

The writer suggests a number of goals, but really never makes the case for any of them. Let's take them one at a time.

"First, we should maintain and foster a high-quality health care system for Minnesota residents, one that both promotes lifetime wellness and attacks of illness and disease. Minnesota’s human capital stands on this foundation."

Is the Mayo necessary for this? Isn't it already a factor in this? While I don't know the Mayo's total capital investment in Rochester to date, I am not convinced that it will close up shop without a half a billion dollars from the state. Frankly, if anohter state wants to give it to them and it makes sense to the Mayo to open a new clinic or facility there, have at it. Any new developments made there will find their way here.

"Second, public policy should nurture a world-class medical sciences community working on both basic research and applications in treatment and technology. "

Again, why? The Mayo is a world class institution. Will it become any less so if some of its facilities are located elsewhere? Medical science is a worldwide collaborative effort, more so today than ever.

"Third, we have world-class medical clinics that attract patients from throughout the world and public policy must foster their continued growth. Medical sciences and medical clinics have direct economic effects in terms of output and employment and have multiplier effects due to spinoffs and smaller businesses that serve larger firms."

It makes no sense to me to develop 'destination medical spas' which will not be available to the average citizen, for a number of reasons. If the case is one of economic development, convince me that this is the best way we can spend $500 million in that area. Or at least that it's a good way to spend that money. I've yet to see anything other than claims that we're leveraging the state's requested investment, claims which sound strangely similar to those made by the Vikings only a year ago. No, we're not leveraging state dollars. The Mayo seeks to leverage its dollars at our expense. The least it can do is show us what we'll get for the money.

"Fourth, to complement the first three goals, we must preserve and improve our world-class medical education institutions."

See above.

Why Mayo/ University merger?

My interest in seeing a Mayo/University merger rests on my desire to see another "collaborative" medical practice established in the metro area. Here is a good explanation of how their (Mayo) approach to practicing medicine differs from most everyone else:

http://www.healthbeatblog.com/2008/10/what-makes-minn/

While the two hospitals associated with the Mayo Clinic (St. Mary's and Methodist) were recently merged, it is unclear to me exactly what role the Clinic exercises in managing the hospitals. So the Mayo may not be interested in such a merger because they do not want to be responsible for "managing" the University Hospital.

Nonetheless, it seems to me an idea with enough merit that it should be explored. Kudos to Mr. Johnstone for suggesting it.......................