Issue link: https://beckershealthcare.uberflip.com/i/821337
38 38 CEO/STRATEGY 7 Healthcare Professionals on Mayo Clinic's Private Insurance Prioritization Policy By Laura Dyrda A video surfaced in March of Mayo Clinic CEO John Nose- worthy, MD, giving a speech in 2016 in which he said the system would prioritize patients with private insurance over those with Medicare or Medicaid in non-emergent cases, but the health system would continue to take all patients regardless of insurance source. Dr. Noseworthy faced criticism aer the video was made public, but he contended the health system needed to increase the number of pa- tients with private insurance to continue making payroll and providing pensions, along with other benefits. Mayo Clinic issued a statement in response to the negative reaction, which in part stated: "Balancing payer mix is complex and isn't unique to Mayo Clinic. It affects much of the industry, but isn't oen talked about. at's why we feel it is important to talk transparently about these complex issues with our staff," the statement reads. He also released a statement on March 17, clarifying that Mayo Clinic will continue to treat Medicare and Medicaid patients and they will receive the same level of care as patients with private insurance. e Minnesota Department of Human Services has since launched an investigation into the health system for possible violation of civil and human rights over the policy. Here, seven current and former healthcare professionals address Dr. Noseworthy's comments and respond to the broader financial chal- lenges facing hospitals and health systems that provide care for Medi- care and Medicaid patients. Responses have been lightly edited for length and clarity. Michael Coords, MD. Clinical fellow at the UC San Francisco: "I can completely understand where they are coming from. With all the gross inefficiencies within medicine, increased expenditure on administra- tion, increased workloads with decreased compensation, medicine has to become more business-like or hospitals will at the very least expe- rience huge cuts, which will significantly affect patient care or, in the worst case, hospitals will fail. I see more hospitals and private physi- cians going this route soon. ere is a solution for this, but unfortunately it's quite political and not what people want to hear. If we were able to cut down on the amount of non-physician staff in the hospital and redirect funds to the actual care of patients, such decisions wouldn't have to be made and healthcare would improve. Unfortunately the best way to do this is a single-payer healthcare system, and people don't want this. What people fail to real- ize is we don't turn patients away from hospitals even if they don't have insurance, so the hospitals eat the costs and one way or another we are all paying for people who don't have insurance. e simplest solution is to make it an efficient system, cut down costs and improve healthcare for everyone which is possible." Patrick J. Gless. Associate director of graduate programs in health- care decision analysis and adjunct professor of pharmaceutical and health economics at the University of Southern California Leon- ard D. Schaeffer Center for Health Policy & Economics (Los Ange- les): "Healthcare delivery costs are increasing faster than Medicare and Medicaid reimbursement. e Medicare Payment Advisory Commis- sion's March 15 report to the Congress projects a -10 percent Medicare margin for hospitals in 2017. Capital shis to areas of higher return when margins decline — such as from public payers to private payers. As one of the world's premier healthcare organizations, Mayo Clin- ic employs highly specialized staff and offers access to novel medical technology, but also incurs high costs per unit of service. Reimburse- ment rates must exceed costs in order to maintain these special service offerings. Although Mayo Clinic holds exceptional market power, empirical ev- idence suggests less selective providers with smaller market share and greater financial constraints are able to reduce costs and yield prof- itable margins from public payers. Additionally, trends such as baby boomers becoming Medicare-eligible and the increasing prevalence of care-intensive chronic conditions will likely exert upward pressure on demand, offering a large volume of patients for efficient Medicare providers." David Kashmer, MD. Trauma and acute care surgeon and associate director of e Surgical Lab (Center Valley, Pa.): "As a physician, I never look at the type of insurance a patient has before giving care, which means it never affects the type of services I provide to my pa- tients. At an administrative level, I realize that payer mix is extremely important when it comes to the profitability of a hospital. While I have never heard of the model that Mayo Clinic is suggesting, I believe qual- ity improvement projects are the best way to save costs — not prioritiz- ing patients based on their payer source. In other words, I do not agree with this policy. Instead, I urge hospital administrators to take the opportunity to improve quality and decrease waste by focusing on value instead of patient volume. Once a hospital has a quality system in place, the payer source becomes less important, which means no one has to be 'prioritized.' While the future of healthcare is unknown ... many Americans are wor- ried that they could lose their care. Knowing they could be depriori- tized over others (even if they keep their insurance) doesn't provide hope for when they need medical attention in the future. Prioritizing is not the right solution. Hospitals worried about their financial health should consider eliminating waste and improving quality care to save the most on costs. When this takes place, payer mix will not be an issue." Paula Muto, MD. Director and CEO of the Vein Center at Muto Sur- gical (North Andover, Mass.): "e healthcare dollar is precious and should not be squandered. Insurance companies traditionally spend an amount that is not insignificant on administrative costs and mar- keting. Medicare, on the other hand, had a fairly low overhead — but since the ACA, costs have ballooned. Moreover, expansion of Medicaid with federal subsidies has diverted dollars away from patients toward supporting the newly created bureaucracy. Private insurance companies increased their premiums across the board, citing the need to cover everyone, but even states like Massa- chusetts, which already had universal coverage in place, saw significant increases. It's private enterprise doing what it does best, optimizing their margins at the expense of those providing the care."