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America is well served by Mayo Clinic's thoughtful health-reform critique

In recent weeks the American Medical Association (AMA) stepped out and enthusiastically endorsed the health-reform bill proposed by House Democrats. This sparked a nationwide flurry of criticism from health-care providers, who made it known that the AMA does not speak for them and that the bills in Congress fall far short of solving America's health care issues.  

Of these provider voices, the Mayo Clinic's may be the most influential. President Barack Obama regularly cites Mayo as a model for reform. Consequently, its criticism of congressional reforms is tough to ignore.

A reporter picked up on this fact in President Obama's most recent prime-time news conference.  To a question citing Mayo's criticism of the House proposal, the president responded:

I think it's important to note that the Mayo Clinic was initially critical and concerned about whether there were enough changes in the delivery system and cost-saving measures in the original House bill. After they found out that we had put forward very specific mechanisms for this [Independent Medicare Advisory Council (IMAC)] idea, this idea of experts getting the politics out of health care and making decisions based on the best evidence out there, they wrote in their blog the very next day that we actually think this would make a difference.

A misleading implication
The implication in this statement — that Mayo supports the president's reform after being "initially critical" — is entirely misleading. True, Mayo "sees potential" in the IMAC idea. However, this is merely support for one idea, not for the administration's whole reform effort, which still misfires on a number of fronts identified by Mayo — most notably, the public-plan option. 

A review of the Mayo Clinic Health Policy Center's recommendations suggests that administration officials should brace for more criticism if they persist on their current path. The fact is, Democratic proposals largely fail to advance the four cornerstone principles that underlie Mayo's recommendations. 

According to Mayo's four principles, health reform should create value, coordinate care, reform the payment system and provide insurance for all.  The first three focus on value — the need to measure value properly and the need for a payment system that rewards providers that deliver high-value care. Unfortunately, as the Mayo blog laments, the Democratic congressional proposals actually undermine these principles. 

The administration's IMAC proposal does represent a step toward addressing these value questions in Medicare. However, it's a small step and certainly not the game changer that President Obama implied. According to the Congressional Budget Office, there is a "high probability" (PDF) that no savings will materialize from IMAC. In addition, Mayo already complained that the timeline for implementation is too long. And the day after blogging about IMAC's potential, Mayo officials sent a letter (PDF) to Congress, entitled "Getting Reform Right," expressing much stronger support for a separate Medicare payment reform bill sponsored by Sen. Amy Klobuchar, D-Minn.
 
Different routes to universal coverage
On top of diverging over value-based payment reform, Democratic proposals and the Mayo recommendations take radically different routes toward universal coverage — Mayo's fourth principle.  Here, Mayo officials are concerned not just that people get covered. They're concerned about how people get covered. Coverage, according to Mayo, should be mandated, guaranteed, portable, affordable, competitive and individually owned.  

Among other things, this means reforming the tax code so that it's no longer biased against individual-owned insurance. Denis Cortese, the president and CEO of the Mayo Clinic, recently emphasized the importance of tax code reform in an interview with Charlie Rose: 

Some equalization of that tax deductibility for purchasing of health insurance — either get rid of it or extend it for both or cap it, but do something about that — I think that is a fundamental important step that has to be made.

Democratic proposals all fail to include this "fundamental" step. These proposals follow some of Mayo's coverage recommendations related to guaranteed issue, individual mandates and sliding-scale subsidies. Yet they fail to increase portability, spur competition, promote individual ownership, and, as just noted, equalize the tax treatment of purchasing health insurance. Instead, Democratic proposals promote the status quo employer-owned insurance model through an employer mandate and extend coverage primarily by broadening access to government health plans.

Considering the administration's mild effort to reward providers for value and the absence of tax code reform, Democrats will need to chart a new course if they expect to garner support from the Mayo Clinic and likeminded providers. 

Not opposed to reform efforts
As the Rochester Post-Bulletin — Mayo's hometown newspaper — reports, Mayo is not against the administration's reform efforts. Mayo certainly agrees our system needs reform and would like to work with the administration toward that end. Their initial criticism can be viewed as the first step in that effort and it has clearly moved the administration, albeit slightly, in the right direction.  

In contrast to the AMA's blithe support for reform for reform's sake, America is well served by the Mayo Clinic's more thoughtful, cautious and ongoing critique. 

Peter J. Nelson is a policy fellow at Center of the American Experiment in Minneapolis.

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Comments (4)

Mayo is offering no "plan" of any kind whatsoever. The principles they promote either so commonsensical as to be mundane observation (i.e. quality coordinated health care) or designed to inhibit structural change (recommending the preservation of existing insurance providers albeit with some cosmetic changes). Mayo as an institution is simply protecting it's own financial interests by promoting principles that will preserve and enhance it's own business model. The easiest way to accomplish all of Mayo's objectives would be via a single payer national system that would be able to provide universal direction and cost controls, yet Mayo opposes this.

Essentially the Mayo principles recommend we create an elaborate system of market incentives to basically trick providers into delivering good quality health care. For one thing, this approach is neither unique or new, and has already failed. Such an approach simply adds layers of indirect complexity to an already overly complex system by assuming quality health care cannot be addressed in direct fashion, but only indirectly via tricky incentives. Frankly I'm shocked by Mayo's apparent revelation that health care providers will not provide quality care without sufficient financial incentives. When I worked on a psychiatric ward in a hospital, we got paid either way so our desire to provide quality care was driven by a basic sense of humanity and ethics. It didn't cost anymore to do it right than it would to do it wrong. We tried to do it right because that's what we were there for. Looking at Mayo's recommendations for market incentives I suppose we should have gotten bonuses for saving patients lives.

The only thing Mayo is contributing to the dialogue at this point is more confusion. They're simply adding a new problem set to the mix by suggesting it's someone other than the hospitals responsibility to provide quality care. If you run a hospital, or a clinic, or your a doctor, you have a responsibility to provide the best care you can regardless of market incentives, if you don't get that, you have no business running a hospital. Efficiency and quality are common sense objectives in any human endeavor, if you need to be manipulated into pursuing these objectives you have no business running anything much less a hospital.

As far as I know Mayo's a great hospital, but all they're contributing to the health care debate is fog and confusion. Mayo is contributing to a sense of paralysis, is that their real objective? After all, they're doing rather well in the current environment.

Mr. Cortese noted in his article that, in his opinion, having doctors work on salary instead of a fee-for-service arrangement not only saved money but allowed doctors, other providers and health-care workers to concentrate fully and COOPERATIVELY on the patient and his/her needs.

He must have forgotten for a moment that he was in favor of competition as a major driver of quality health care. As much of the Congress has obviously forgotten as well, as they still talk about "consumers" being able to "shop around" for the lowest-cost/highest-quality care when a heart attack or broken leg demands attention.

Health care ain't widgets. Widgets are best invented, produced, marketed and sold by the private sector. Health care is best provided privately, but financed cooperatively as a common good like police and fire protection.

One serious frustration in the Mayo platform is linking physician income to patient behavior. Unfortunately, this is becoming a pretty common practice. It has at least one serious flaw: The doctor takes the hit for another person's behavior. If, despite the doctor's best efforts to provide treatment, advice and assistance, a patient continues to smoke two packs a day, the doctor should not have income reduced because of bad patient outcomes. This sets the physician to be the patient's whipping boy. One person should not be made to suffer from actions beyond their control.

What worries me about Mayo's two cents worth:

Their vested interests are not clearly stated; I expect they have profit and status quo concerns as a corporate institution.

They are an institution in the business of the care of others, in compassion and humanity, based in the Hypocratic Oath, yet they embrace as an institution this misguided notion that if you pay a doctor more to keep you well he or she will care more about you and do a better job than they will if you are just a simple beautiful human being in need of care. What an insult to the real motivation of doctors and human beings!

Their plan seems to be rather aligned with the private insurance industry's game plan- to delay, discredit, obfuscate, not put out any real reform of their own, and protect private insurers from government competition.