Medicare and Mayo

When President Obama touted the Mayo Clinic as a model for cost-efficient health care in this country, I’m sure he wasn’t able to see into the future and determine just how much that statement would make the health care system he supports look more and more like a bad idea.

According to the president, Mayo provides health care “much more cheaply” than other facilities around the country.  Back in July, the Clinic roundly criticized the House legislation as missing “the opportunity to help create higher quality, more affordable health care for patients.”

Clinic officials went on to say that it would, in fact, do just the opposite because the proposals being touted by Washington aren’t patient-focused or results-oriented.  “The real losers will be the citizens of the United States.”

Now, we see that even without the proposed cuts of over $400 billion contained in the Senate version of health care reform, Medicare reimbursement rates are still too low for such “cheap,” but quality care as is offered at Mayo.  This presents us with quite a problem.

At a primary-care clinic in Arizona, Mayo has stated that these reduced reimbursement rates from the federal government have led them to stop accepting new Medicare patients.  In 2008, at all of its hospitals and clinics,  Mayo lost $840 million on Medicare patients and $120 million at its Arizona facilities alone.  At the Glendale, AZ clinic, only 50% of the costs of treating a primary-care patient are covered by Medicare.

Is a further erosion in that reimbursement rate really supposed to lower health care costs for those on private insurance plans?  On the other hand, if those rate reductions aren’t implemented, the cost of the current Senate bill skyrockets.

One of the reasons for which the Mayo Clinic’s operations have been praised is that their doctors are put on a salary rather than being paid on a per-treatment basis.  Remember the populist rhetoric used to convince many Americans that their doctors were more interested in making money by cutting off the feet of diabetics than keeping them healthy through less expensive preventive measures?

There still needs to be money coming into the facilities, though, in order to pay the doctors, salary or not; so unless we expect our medical professionals to not feed their families or pay their mortgages, 100 percent of the costs of treatment must be paid.  When the government fails to reimburse at adequate rates, private insurance companies must make up the difference.  Of course, these increased costs are then passed on to those purchasing private insurance.  Because government currently pays nearly 50 percent of medical costs in this country already, the enormous burden placed on private insurers amounts to a tremendous transfer of capital from the privately insured to government insured patients.

Do we really believe that increasing that percentage to 70, 80, or 90 percent will do anything to control costs without drastically reducing quality of care?  There are plenty of free-market based proposals that help to bring down actual costs – maybe it’s time to acknowledge the truth about what works and what doesn’t and begin moving into that post-ideological world we were promised.  Is that simply too much to ask of this administration and Congress?

Leave a Reply

Your email address will not be published. Required fields are marked *