The Mayo Clinic’s chief executive recently told his staff to prioritize patients with commercial insurance over those with Medicaid or Medicare in cases where all other factors are equal.
The announcement came during a speech Mayo CEO John Noseworthy, M.D., gave to employees, reports Minnesota’s Star Tribune. Mayo issued a statement to KIMT News 3 in response to the article, stressing that the announcement refers specifically to cases where patients may be able to receive comparable care elsewhere, and that the clinic still uses medical need as the primary factor in its decision-making process. Mayo also cites an estimated $1.8 billion in unpaid Medicare services across the organization in 2016 as part of the basis for its move.
Among the Affordable Care Act’s effects has been a marked increase in enrollment for government payer plans such as Medicare Advantage. The tendency of those programs to offer low reimbursement rates has led to predictions that hospitals would cherry-pick patients who would be better for their bottom line. Noseworthy reportedly cited the recent 3.7% rise in Medicaid patients as a “tipping point” for the organization.
Mayo’s public statement suggests the practice “isn’t unique to Mayo Clinic,” but that providers are reticent to discuss the issue for obvious reasons. “We need to balance requests from these patients with their specific needs—if it’s necessary for them to come to Mayo—as well as the needs of commercial paying patients,” said Karl Oestreich, Mayo’s spokesman.
Market position makes it possible for providers like Mayo to command higher compensation for its services from commercial payers, Harold Miller, chief executive of the Center for Healthcare Quality and Payment Reform told STAT, though the business logic does little to solve the fundamental problem of high healthcare costs. “If institutions are simply going to say, ‘I’m not going to serve patients unless I get paid more,’ that’s only contributing to the problem,” he said.