Mayo Clinic’s CEO attempts a do-over

Dr. John Noseworthy (l), CEO of Mayo Clinic being interviewed by Dave Lee, morning host of WCCO radio in Minneapolis at the Economic Club of Minnesota.

The CEO of Mayo Clinic, castigated recently for telling staff to prioritize care for privately insured patients over those with government insurance, said Wednesday that his remarks had been taken out of context.

Dr. John Noseworthy, added that he regrets having used the word “prioritization” in the videotaped talk he gave to employees and first reported by the Star Tribune in Minneapolis.

“I can see why it may have led to a sense that there must be a policy change, but nothing was meant,” Noseworthy told reporters following an address to the Economic Club of Minnesota. “I regret the heartache that that has caused to many patients, because our Minnesota Medicaid and our contracted Medicare patients have exactly the same access to Mayo Clinic for serious and urgent medical issues.”

Noseworthy added that he meant Mayo employees should focus on measures that will help generate savings to cover the cost care for patients whose government-provided reimbursement falls short of private payers’ rates.

“There will be continuous pressure and reduced reimbursement for the work that we do,” Noseworthy told club members. “All the healthcare providers will have to find a way to improve quality and reduce their costs.”

Noseworthy implied that Mayo and other healthcare systems that produce good outcomes should be reimbursed better for their efforts.

“You would think that in healthcare, that if you get the diagnosis right and if you do better procedures with less morbidity and mortality, if you change people’s lives, if you reduce their medications, if you support them and so on, that there would be value added to that and the reimbursement might reflect that,” he said. “That’s not currently the case. We’re working with CMS on this.”

The agency should employ risk adjustment to properly reimburse health systems that care for patients who are most likely to have the most expensive hospitalization, Noseworthy told reporters separately. That analysis should include a consideration that the patient’s home hospital could not provide the level of care that a system like Mayo could, he added.

Mayo has also been working with the Trump administration on reforming the Veterans Administration health system. It has not been asked for advice on the American Health Care Act, but Noseworthy offered it anyway.

He expressed concern about President Trump’s plan to cut funding of the National Institutes of Health by 18.3 percent, or about $5.8 billion. Noseworthy said he spoke with President Trump, emphasizing the importance of stable research funding to produce new treatments, commercialize biomedical discoveries and foster medical research careers. Under President Barack Obama, NIH gave Mayo a $142 million grant to serve as the nation’s precision medicine biobank.

He also took said Trump’s immigration policies could harm medical research and patients’ health.

“I made the point to Reince Priebus that the nation needs a global talent pool for research and medicine and that sick patients from all over the world must be able to come to America and to the Mayo Clinic for their health,” Noseworthy recalled saying to Trump’s chief of staff.

Headquartered in Rochester, Minnesota, Mayo Clinic employs 64,000 in five states. It treats 1.3 million patients per year from 50 states and 140 countries, and invests more than $900 million in research and education annually, Noseworthy noted. 

Mayo has been making strategic investments in improving quality and reducing costs since 2009, according to Noseworthy. It weathered the recession and changes wrought by the Affordable Care Act, and continues to work with CMS to demonstrate how it has been cutting costs while providing care to patients with complex medical needs.

“It’s been a wild ride, a time of unprecedented change, but these challenges present wonderful opportunities for Mayo Clinic and its staff to make organizational adjustments and to innovate,” he said.

Photo: Economic Club


Old video surfaces showing Mayo Clinic CEO prioritizing patients with private insurance

Left to right, Mayo Clinic CEO John Noseworthy, VA Under Secretary for Health Dr. David J. Shulkin and former VA Secretary James B. Peake discuss telemedicine at ATA 2016.

Looks like Paul Ryan isn’t the only one being embarrassed by the surfacing of old videos.

Mayo Clinic CEO Dr. John Noseworthy is under fire after telling employees of the Rochester, Minnesota-based health system they should “prioritize” treating patients with commercial insurance over those with Medicare or Medicaid if their conditions are the same.

In a 2016 videotaped speech to employees, of which the Star Tribune obtained a transcript, Dr. Noseworthy said,


We’re asking … if the patient has commercial insurance, or they’re Medicaid or Medicare patients and they’re equal, that we prioritize the commercial insured patients enough so … we can be financially strong at the end of the year to continue to advance, advance our mission.

Addressing employees, Dr. Noseworthy noted the Mayo Clinic had reached a
“tipping point” with a 3.7 percent increase in Medicaid patients. He cautioned that without balancing out the number of commercially insured patients, Mayo’s finances would suffer.

“If we don’t grow the commercially insured patients, we won’t have income at the end of the year to pay our staff, pay the pensions, and so on, so we’re looking for a really mild or modest change of a couple percentage points to shift that balance,” he said.

In 2016, Mayo Clinic, which sees more than 1.3 million patients annually, reported net operating income of $475 million. The same year, the health system also said it provided $629.7 million in care to individuals in need, including $83.3 million in charity care and $546.4 million that wasn’t covered by Medicaid or other programs that care for the uninsured or underinsured.

Last Friday, Dr. Noseworthy released a statement in response to the Star Tribune article:

Patient medical need will always be the primary factor in determining and setting an appointment. In an internal discussion I used the word ‘prioritized’ and I regret this has caused concerns that Mayo Clinic will not serve patients with government insurance. Nothing could be further from the truth. In fact, about half of the total services we provide are for patients who have government insurance, and we’re committed to serving those patients.

Changing demographics, aging of Americans and budgetary pressures at state and federal government pose challenges to the fiscal sustainability in healthcare today. While these discussions are uncomfortable, they are critical for us to be able to meet the needs of all our patients.”

Mayo Clinic confirmed to MedCity Dr. Noseworthy’s comment is the most up-to-date statement.

Minnesota Department of Human Services Commissioner Emily Piper told the Star Tribune the department will be examining whether Mayo violated patients’ rights or its Medicaid contracts with the state.

Dr. Noseworthy’s comments are especially ironic in a state that expanded the Medicaid program under the Affordable Care Act.

Photo: Twitter user Arizona Telemedicine 

Texas Medicaid payment reform initiative curbs elective early deliveries

Even though the health risks to babies born before they reach full term at 39 weeks have long been recognized, nearly 1 in 10 babies in the United States is born prematurely. Texas decided to try to change that.

In 2011, the Texas Medicaid program was the first in the country to take steps to curb elective early deliveries by refusing to pay providers who induced early labor or performed a cesarean section that wasn’t medically necessary before 39 weeks. In the first two years after that, Texas reduced the rate of unnecessary early delivery by as much as 14 percent. The state’s efforts also led to an increase in the length of pregnancies by nearly a week, with infants weighing on average nearly half a pound more, a new study found.

Those reimbursement changes were part of a Texas Medicaid payment reform law. Before it took effect, 10.63 percent of Medicaid single births in the state were early elective deliveries, according to the study, which was published in the March issue of Health Affairs.  After the law passed, the percentage of unnecessary early deliveries declined 2.03 percentage points.

About half of the decline was due to the payment reforms, while the rest could be attributed to other efforts to reduce early deliveries, unrelated trends and the economy, said Heather Dahlen, a research associate at Medica Research Institute in Minnetonka, Minnesota, and the study’s lead author.

Still, “in order for the rate to fall that much, there was a relatively significant effect on the target population,” Dahlen said.

The impact on early elective delivery was greatest for Latinos, whose rate declined 1.77 percentage points to 8.14 percent. The rate for non-Latino blacks declined 1.4 percentage points to 9.57 percent, while non-Latino whites saw a much smaller decline — 0.72 percentage point, to 8.43 percent.

Infants born before 39 weeks are more likely to have a range of health problems, including respiratory disorders, sepsis and feeding issues, and to be admitted to hospital neonatal intensive care units. Doctors and expectant mothers who opt for early delivery may not realize the risk or choose to go ahead for convenience. In some rural areas, women may be encouraged to schedule early deliveries to ensure they’re able to get to the hospital in time.

For the study, researchers analyzed data from 2009 to 2013 on the national Vital Statistics System’s Natality Detail Files, which is derived from information reported on birth certificates.

The federal-state Medicaid program for low-income people pays for roughly half of all births in the United States. After Texas passed its law, five other states passed similar laws in 2013: Georgia, Michigan, New Mexico, New York and South Carolina.

Reducing preterm births generally, and early elective deliveries in particular, is a priority for many groups, including health care providers, hospitals and patient-advocacy organizations. In addition to payment reform, these groups have employed other strategies such as educational programs for health care providers and patients and “hard-stop” policies that prohibit doctors from scheduling early elective deliveries unless they meet medical necessity standards.

“The Medicaid program was paying doctors for doing things that actually harm babies,” said Dr. Paul Jarris, chief medical officer at the March of Dimes, which publishes an annual report card that ranks states based on their preterm birth rates. “These payment changes actually make huge differences if they’re done right.”

Photo: Bigstock