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  • April 2014
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New Year; Same Bad Healthcare Plan

When President Obama spoke about a “model” for national healthcare, he cited several privately-run systems, including the Mayo Clinic, in an online townhall on healthcare held at Northern Virginia Community College on July 1, 2009. 

In his prepared remarks, the President said, “We have to ask ourselves why there are places like Geisinger Health Care Systems in rural Pennsylvania, or Intermountain Health in Salt Lake City, that offer high-quality health care at costs that are well below average, in some cases 30 percent lower than in other communities.  If they can do it, there’s no reason why all of America shouldn’t do that.  We’ve got to identify the best practices across the country; we’ve got to learn from those successes, and then we’ve got to replicate those successes elsewhere.”

In response to a question about medical malpractice, President Obama said, “There are some places, like the Mayo Clinic, many of you have heard of, provides outstanding care, some of the best in the world.  People fly in from everywhere to go to Mayo Clinic to get treated.  Turns out Mayo provides care much more cheaply than a lot of other health systems, even though it’s better care.  And part of the reason is they do some things that are commonsensical, but unfortunately we don’t do in the health care system. For example, instead of you going to one — your primary care physician, who has you do a bunch of tests, then refers you to a specialist who has you do a bunch of tests, then maybe you go to a third specialist, another bunch of tests; go to the hospital, they retest you.  What they do is, at Mayo Clinic, when you meet with the — your primary physician, he calls in all the specialists all at the same time, and as a team they evaluate you, do all the tests right there, so you’re not duplicating a whole bunch of stuff.  And that coordinated care drives down costs tremendously.”

It turns out this coordinated care, “some of the best in the world” as the President called it, is not sufficiently compensated by Medicare, the government’s largest existing healthcare program.  A December 31, 2009 Bloomberg article noted that the Mayo Clinic would no longer accept Medicare patients as of January 1, 2010 at its family clinic in Glendale, Arizona because it was losing too much money. 

The article stated that “The Mayo organization had 3,700 staff physicians and scientists and treated 526,000 patients in 2008. It lost $840 million last year on Medicare, the government’s health program for the disabled and those 65 and older, Mayo spokeswoman Lynn Closway said.  Mayo’s hospital and four clinics in Arizona, including the Glendale facility, lost $120 million on Medicare patients last year, Yardley said. The program’s payments cover about 50 percent of the cost of treating elderly primary-care patients at the Glendale clinic, he said.”

The Medicare Payment Advisory Committee in a March 2009 report  found that physicians had been paid 20 percent less for Medicare patients that for those with private insurance for the past decade.  As they have for several years, the House and Senate eliminated a proposed 21.5 percent reduction in Medicare physician reimbursement for 2010 by large majorities in November.  Nonetheless, the House and Senate healthcare bills are relying on future 20 percent reductions to help fund their new entitlement program following the one-year “fix” that will stop the cuts from taking effect this year.

Using Vulcan logic (because the whole Obama/Reid/Pelosi plan really is from out of this world, and not in a good way):  If Mayo (along with many individual physicians and smaller healthcare practices) is dropping Medicare patients because the providers are losing their shirts on the program, and the healthcare bills cut Medicare physician reimbursement to help finance the new entitlement program, more and more providers will drop Medicare patients, and those individuals will all end up in … the new healthcare entitlement plan.    Maybe members of Congress are more diabolical than anyone thinks.

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