What would Mayo do? ‘Pay-for-value insurance, how to cover everybody’ are chief goals of policy center

President Obama
President Obama answers a question during his news conference at the White House Wednesday.

President Obama pointed again to Minnesota’s Mayo Clinic during his press conference Wednesday as an example of what’s working in the American health-care system.

Even though Mayo has been in the news for its reservations about reform legislation and the Medicare payment system, Obama said that he thought Mayo appeared to be on board with a proposed independent Medicare panel that will come up with recommendations on improving the system.

Obama continually has singled out the Rochester, Minn.-based system’s high-quality care delivered for lower costs. “That’s the whole idea behind Mayo — patient care is the No. 1 concern,” the president said during questions from reporters.

Early Wednesday afternoon, before Obama’s conference, MinnPost did a Q&A with Jeff Korsmo, director of Mayo’s Health Policy Center, as part of our “Best hopes, worst fears for health reform” series with thought leaders.

‘Very, very much in favor of health-care reform’
After reading recent media coverage about Mayo, Korsmo says in the Q&A that he wants to make it clear that Mayo favors health reform.

Jeff Korsmo
Jeff Korsmo

“The way the news media have covered us the last few weeks sometimes makes it sound like we’re against reform,” he said. “We’re very, very much in favor of health-care reform. It has to be done. There are some good things that are in the legislation so far, and we’re pushing hard on the points where we believe we haven’t reached where we need to go and that’s this pay-for-value insurance and how to cover everybody.”

This post in the Health Policy Center’s blog about the House’s tri-partisan bill ended up getting a lot of media attention in recent days:

“In general, the proposals under discussion are not patient focused or results oriented. Lawmakers have failed to use a fundamental lever — a change in Medicare payment policy — to help drive necessary improvements in American health care. Unless legislators create payment systems that pay for good patient results at reasonable costs, the promise of transformation in American health care will wither. The real losers will be the citizens of the United States.”

Mayo’s CEO also signed an open letter (PDF) to Congress this week.

MinnPost: The Mayo Clinic has been in the news this week because of objections to some health-reform legislation in the House, and it has been singled out by President Obama for its approach to providing high-quality care for lower costs. As director of Mayo’s Health Policy Center, what are your best hopes and worst fears for health-care reform?

Jeff Korsmo:
Let me start out by saying we believe strongly that there needs to be health-care reform. The system is broken and is not serving our patients well. So, our hopes are that we’ll have reform that is patient-centered, that improves access to health care for all Americans and that it is a system that encourages the highest value to be provided by those who deliver care for patients. In other words, the highest-value care is the best care, the best outcomes at a reasonable cost — that is our hope and that is the goal of the Mayo Health Policy Center.

MP: Your worst fears?

Our worst fear is that it won’t be that, that it won’t be patient-centered. Mayo’s primary value is that the patient comes first, and everything we do here is based on that. We’ve had that since 1910 as our primary value. So, it has to be patient-centered, meaning whatever it is it’s got to be the best for the people who need the care and it’s possible that legislation could end up not meeting that value. I think it’s likely that legislation will improve access significantly, but if it didn’t that would be a fear and then we would end up with legislation that does not change the way we provide incentives in the health care system, meaning that we really pay for the inverse of value today. Our fear would be that we would continue that model.

MP: I must admit to assuming that because Mayo Clinic is regarded as the Rolls-Royce of health care that its costs would be out of reach for many Americans. What’s Mayo’s big secret in offering high-quality care for less money?

There are a number of factors that we think create the culture that results in high-value care, meaning high-quality, lower-cost care. First, we’re guided by that primary value: The needs of the patient come first. Literally every decision we make around here has that front and center. So it’s really patient-centeredness.

We are also an integrated organization, meaning that our hospitals and physicians are all part of the same organization. We don’t have artificial boundaries between us. We all work together in teams focused on the patients. So, in almost all of our sites we have what we call an integrated medical center. We’re committed to delivering care that is team-based, so teams of physicians, teams of nurses and physicians, pharmacists and home health care — that people from all across the care spectrum deliver care as a team to patients. We draw on everybody’s best skills and we try to create a system where we remove as many disincentives to do those things.

All of our people are salaried. Nobody gets more money for doing more surgery or less money for doing less surgery. They’re paid a salary, but there’s no incentive to either protect the patient from being seen by somebody else or for doing more than is appropriate for them.

Since 1908, we’ve had a medical record that is called a single medical record or unit medical record (it’s all electronic now). But it’s a medical record where everybody who cares for the patient sees what everybody else is doing for the patient. So that transparency among those who deliver the care is a very good thing both for efficiency as well as kind of a peer review process so that people know that they’re always capable … of seeing exactly what their assessments are, what their test ordering is. It’s just a natural way to create the right kind of balance and focus on the patient.

MP: How can that be replicated elsewhere, and how difficult do you think it will be to get doctors, clinics, hospitals, insurers and the government to do things Mayo’s way?

It’s taken many, many years for this to happen at Mayo. The Mayo brothers and the Franciscan sisters started it. It’s not something you can just make happen overnight. But our goal should not necessarily be to try to create a whole bunch of organizations that are exactly like Mayo Clinic. It’s rather to really understand which of those things I described to you drive the high-value health care.

We think they all do, but how do we provide the right incentives for organizations to be more patient-centered, to remove the wrong incentives to provide more care than is needed, to have the IT infrastructure to connect them? Those are the sorts of things that need to be done in order to create an organization that’s really patient-centered, that’s connected, that has removed the wrong incentive to do the wrong thing, and ultimately we think that probably more organizations or providers should come together into what our terminology calls “accountable health organizations” to really focus on the patients.

But there are examples of organizations in the country who have achieved some of these things and they are not even part of the same organization. There’s a group in North Texas. There’s a group we’ve heard of in California. There aren’t a lot that we know of, but there are some that have managed to replicate some of the features without actually coming together as an organization.

I think it’s going to be difficult to do that because it means a lot of change but if we put the right positive incentives and potentially adverse consequences in place so that people see it is in their best interest to truly focus on the patient, if that means they need to come together to do it, well maybe we can begin to make progress on that.

Again, I’ll just say our goal is not to create more Mayo Clinics per se because people will challenge us on that. … “Well, you can’t possibly create more Mayo Clinics.” We say, “Well, you can create organizations that are patient-centered, that remove the strong incentives, that truly encourage the teamwork, and you don’t have to become just like Mayo to do that.” It will be a challenge.

MP: Why does Mayo think that an individual mandate is preferable to an employer mandate, or to a public option or even a national single-payer plan? How do you align a patient-centric approach with an individual mandate? What happens when people lose their jobs and cannot afford to keep up their health-insurance premiums?

Well, the starting point is that the prerequisite in this country to having access to health care is to have health insurance. You can get care through emergency rooms or whatever, but if you don’t have health insurance your odds of getting good health care are not very high. So, we believe everybody should have health insurance. Now, you can go a number of routes. I don’t think the way you asked the question is the way to ask it. To me, an appropriate question is, “Why an individual mandate vs. a government mandate?”

The reason we said we would support an individual mandate is we really believe the right thing is for people to be able to take their insurance with them wherever they go. So, if they lose a job or they switch jobs to another employer, that they have the ability to take that insurance with them. Now if they lose their job and don’t have income, then one of the things we’ve supported is a government role to provide sliding-scale subsidies for people who are not able to afford their health insurance. That would be a role for government.

We’re not saying the employer shouldn’t continue to provide the insurance. We’re fine with employers continuing to provide insurance; it’s just that the insurance should be portable with the individual and that people ought to be expected to have insurance coverage.

The public-plan issue is very different. You could have a public plan that is employer- based, or you could have a public plan that is government-based, or you could have a public plan that is individual-based. There isn’t just one public plan. There are at least five different options thrown out there as potential public plans, and our position has been that a government-run, government price-controlled Medicare-like program is not the right solution; it’s what’s gotten us into the problem that we’re in now.

But we also believe the [private] insurance system needs to be reformed. There are some things in some of the bills that are coming through that begin to do that, that remove things like pre-existing conditions from exclusion — we think those are positive things. The insurance system should be reformed and there are good steps out there, but our belief is we really think the role of government should be to provide sliding-scale subsidies to people who can’t afford it and let people have access through a reformed private insurance system.

But if there’s a desire to create another kind of option, we think something like the federal employee health-benefit plan or the cooperative sort of model that some people are putting out there — we think those rather than a Medicare-like approach are the right way to go. We don’t support a single-payer model but there’s currently not much discussion about that point.

MP: What if Medicare were reformed along the lines of your proposals of emphasizing outcome vs. volume?

First of all, it’s going to take significant time for Medicare to really be reformed. We can pass legislation, but it’ll still take time to know if the legislation has taken effect and has had the desired impact. Second, we are concerned — reasonable people can differ with us — but we’re concerned about too big of a government role in health-care insurance overall. The government, between Medicare and Medicaid and other programs, is already a very large chunk of the overall market and we think expanding that even more is probably not the right thing to do. Again, I know there are people who disagree with us.

But even if we think it would be very good and we obviously believe strongly that the Medicare system needs to be changed, we also believe that expanding the role of government even further than it is where it’s today by some measures I’ve seen at least 40 percent of overall market, to make government an even bigger player, we don’t think that’s a good idea.

MP: Is there anything you would like to add that I didn’t ask you?

The way the news media have covered us the last few weeks sometimes makes it sound like we’re against reform. We’re very, very much in favor of health-care reform. It has to be done. There are some good things that are in the legislation so far, and we’re pushing hard on the points where we believe we haven’t reached where we need to go and that’s this pay-for-value insurance and how to cover everybody. Those are the two main points that we’re pushing hard on now.

There are a variety of ways to pay for value; there are a variety of ways to get there, and we’re open to working with people on different ways of doing it. But we do strongly believe that the health-care system has to be reformed.

Casey Selix, a news editor and staff writer at MinnPost.com, can be reached at cselix[at]minnpost.com.

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Comments (10)

  1. Submitted by david granneman on 07/23/2009 - 11:20 am.

    hello all
    after listening to president obama last night, i ask myself, WHAT DID HE SAY.
    the president used his usual strategy when giving press conferences. he answeres the question by rambling on and on, then throwing out some usless numbers to make him sound knowledgeable, and then talking until even the people still awake forget the question he was asked. the answere for the first question took ten minutes.
    when asked if congress and the white house would have the same government health care as the public, he said no but it does not matter as your care will be almost the same as the politicians.
    i guess that means our health care will not be good enought for the ruling class.

  2. Submitted by Mike Wyatt on 07/23/2009 - 02:32 pm.

    Fine and dandy. But how will things change if the President appoints a “Medicare Oversight Board” and Congress is responsible for approving said organization? The medical industry is a huge political contributor. Politically-based appointments are hardly sounding like they will be removed from special interest influence. It seems Mayo understands that the removal of the private sector is meeting too much resistance and that their model is now closer to the one Obama is trying to muddle together. However, private insurers getting on the same page with providers does not seem feasible. With single payer, the set nature of pricing seemingly coincides with what Mayo is preaching- quality of care and established price structuring (like their doctors being salaried.) Why are they too opposed to single payer? Sounds like they enjoy doing things their way with the opportunity to haggle with insurance companies in establishing their pricing? $60 billion is wasted on this haggling process every year in the U.S. Paper shuffling is not “quality of care,” so what am I missing as to why Mayo is opposed to single payer?

  3. Submitted by dan buechler on 07/23/2009 - 05:17 pm.

    Kinda like old Teddy Roosevelt said: every damn cuss is a naysayer ‘cept the man with the balls to in the ring and the arena whose facing down the bull.

  4. Submitted by joel clemmer on 07/23/2009 - 09:14 pm.

    “…our position has been that a government-run, government price-controlled Medicare-like program is not the right solution; it’s what’s gotten us into the problem that we’re in now.”
    I have no idea what legitimate research Dr. Korsmo is referring to with this highly unusual statement. I’m not even sure what logic he is appealing to, other than “government- bad; not government – good.” In fact, Medicare provides near complete coverage of it’s target population, is highly popular with them and has been more successful at controlling costs than the industry dominated by private insurance companies. Congratulations to Mayo for their particular achievements but to gauge the needs of the rest of our vast system, it sounds like Dr Korsmo needs to get out of his box.

  5. Submitted by Paul Udstrand on 07/24/2009 - 09:04 am.

    While the good Dr. makes some fine points about health care itself, he’s still just talking about moving deck chairs around when it comes to reform. Why is medicare so much more difficult to reform than private insurance? A public plan is far and away the most portable option available yet he’s against it? A large public plan is the only way to create a framework that would allow the kinds of treatment reform he advocates yet he’s against it? Why? He may be a Doctor, and may be from Mayo, but at the of the day he’s worried a public plan would reduce payments and he and his hospital would take a financial hit. The truth is providers need to take a hit because they’re charging too much for health care.

    And by the way, who says Mayo is so cheap? I’d like to see some actual data behind that claim. Does mayo charge less for a quadruple heart bypass or a colonoscopy than Henn Co. Medical center or the VA?

    Another thing to consider about Mayo is the fact that they are a research hospital, that means that a significant amount of their income is derived from research grants in addition to patient care, this is not the case with all hospitals.

  6. Submitted by Paul Scott on 07/24/2009 - 11:04 am.

    Korsmo isn’t an MD.

    I agree with most of the commenters here, I think he is wandering off script in blanket-trashing single payer. I think Mayo’s message should be efficiency and evidence based medicine. I realize it is their credo, but to me “the patient comes first” is kind of a meaningless statement. The message seems kind of muddled.

  7. Submitted by Paul Udstrand on 07/24/2009 - 05:31 pm.

    #6 Korsmo isn’t an MD.

    I stand corrected, thank you.

  8. Submitted by Glenn Mesaros on 07/27/2009 - 08:18 am.

    What Obama, (called Med-Pac) and Mayo want, the British have, and it is called “National Institute for Health and Clinical Excellence” (NICE). Be Careful whenever bean counters talk about health care. They want to kill Grandma to save money.

    The House Republican Health Care Solutions group, which the party has tasked to deal with Obama’s proposals, officially took up the attack against British health care rationing practices on July 23, when they held a hearing which featured testimony, by telephone, from Dr. Karol Sikora, a British oncologist and critic of the not-so-NICE system of health care rationing in Britain.

    In response to questions from members of the panel, Sikora noted that Britain is falling behind the rest of Europe in terms of cancer survival rates because of the way NICE bureaucratizes the approval of new drugs. “Over time,” he said, “our already low cancer survival rates will drop considerably compared to the rest of Europe.” He said that NICE approval takes up to three years after a new treatment has become available elsewhere. He reported, as an example, that the introduction of angioplasty as a treatment immediately following a heart attack in Britain was “enormously slow.” During his opening remarks, Sikora had reported that the National Health Service (NHS) is run by the largest bureaucratic workforce in Europe.

  9. Submitted by Bernice Vetsch on 07/27/2009 - 01:21 pm.

    Mr. Korsmo also doesn’t seem to realize that the essential element in their ability to focus on patients instead of fees is that doctors work on salary. Just as they do in all those countries with socialized medicine* where health outcomes are so much better than ours.

    Another case of free-market ideology getting in the way of otherwise superior thought processes?

    (*Not that enacting single payer would achieve that as single payer just means that, while the government may pay the bills, provider choice and all medical decisions are yours, not its.)

  10. Submitted by Paul Udstrand on 07/28/2009 - 09:27 am.

    Here’s the other reason you know these executives are blowing smoke when it comes to quality control and patient centered blah de blah. They never mention the fact that we already have a quality control mechanism that US hospitals pay 113 million dollars a year for. It’s called the Joint Commission, and they’re supposed to be the quality control guarantee in this country. In fact it’s a private industry rubber stamp for existing services. Study that if want to know whether or not private sector initiative is going to establish best practices. The fact that these guys never even mention it’s existence tells you they blowing smoke in your mirror. In theory it would be the quickest and easiest way to promote the changes they pretend to champion.

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