Doctors Inc.

Can ‘the Mayo way’ save U.S. health care?

Updated: 2014-01-02T16:34:24Z

By ALAN BAVLEY

The Kansas City Star

— Since William Mayo opened his horse-and-buggy practice just shy of 150 years ago, the Mayo Clinic has turned this farm town into a medical mecca with two hospitals and gleaming marble medical buildings where more than 350,000 patients a year come from around the world.

With 1,900 employed physicians on its payroll here, Mayo has a reputation for providing quality care and for saving money by keeping patients healthy and out of the hospital.

The federal government is betting that other groups of doctors and hospitals can do this too. It has embarked on an ambitious plan offering them financial incentives through the Medicare program to adopt something akin to Mayo-style health care.

Ultimately, the hope is that American medicine can be weaned from its costly reliance on fee-for-service payments that reward doctors and hospitals that do the most procedures or run the most tests, whether they’re needed or not.

The new federal program is one of the reasons for the rush by hospitals to buy up medical practices and hire physicians — they want to create care networks as Mayo has done.

But some Mayo doctors are skeptical “the Mayo way” can be transferred easily or quickly. And early results of the federal program aren’t entirely encouraging.

Mayo’s success comes from a “core commitment to patients’ interests, not because Mayo has to do it for ensuring financial success,” said Victor Montori, an endocrinologist who leads Mayo’s health care delivery research program.

Typically, when hospitals absorb physician practices, “it hasn’t been because they got religion,” Montori said. “It’s because they faced a financial threat.”

Mayo’s physicians are deeply inculcated in the Mayo way to ensure that they fit into the collaborative culture.

Physicians draw straight salaries. There are no bonuses for seeing extra patients or doing more complex procedures.

That’s an important difference from the many hospital systems that factor productivity into their compensation of employed physicians, said Mayo radiologist Stephen Swensen.

“Even if just 10 percent of your salary is based on productivity, it changes your relationship with patients” and could lead to unnecessary care, Swensen said.

Mayo doctors routinely consult with one another on patients’ cases, and they’re expected to follow standardized treatment protocols based on Mayo research.

These standards have not only improved quality by lowering infection rates, reducing dangerous blood clots and improving pneumonia care, they also have saved money — as much as $46 million a year, by Mayo’s estimate — by improving efficiency and cutting the time patients spend at the hospital.

On the clinic floor where primary care physician Robert Stroebel works, physician assistants, nurses and mental health professionals all take part in patients’ care.

Keeping patients healthy means making sure they get vaccinations on time, they receive regular mammograms and their blood test results are monitored. Management of chronic diseases like diabetes requires counseling.

“Physicians aren’t necessarily adept at doing this,” Stroebel said.

For patients with the most complex health problems, Mayo assigns nurses to stay in touch and coordinate their care. The goal is to nip problems quickly to avoid trips to the emergency room.

Two of Stroebel’s patients, Ken and Jacky Swenson, were given a care coordinator a few months ago. The Swensons, both 78, have heart problems and have been in and out of the hospital.

“Sometimes she calls and checks up on how you’re doing,” said Jacky Swenson, a retired schoolteacher. “To me, that was wonderful, to have the clinic concerned about me. I feel very special.”


Mayo has its detractors. They point to its charges, which tend to be high compared to those of other Minnesota health care systems. Mayo’s supporters counter that its patients are less likely to receive unnecessary care.

In a highly publicized study in 2008, Dartmouth researchers found that elderly Mayo patients who were chronically ill spent far less time hospitalized, and ran up substantially lower bills, during the final two years of their lives compared to similar patients at other leading academic medical centers.

If Mayo-style care had been used everywhere, the researchers concluded, Medicare costs would have been 17 percent lower for these patients, a savings of $50 billion over five years.

It was numbers like these that attracted the attention of President Barack Obama and his advisers.

The Affordable Care Act, also known as Obamacare, offers networks of doctors and hospitals the opportunity to make more money from Medicare if they coordinate patient care and keep down costs, as Mayo does.

These Accountable Care Organizations, or ACOs, as the networks are called, agree to take on the responsibility for the care of at least 5,000 Medicare patients for at least three years. The ACOs must meet quality standards for preventive care and managing patients with chronic illnesses.

ACOs that spend less than anticipated on their patients get to share the savings with Medicare. ACOs that don’t save money must absorb the cost of their investments in staff and the computerized systems needed to track patients and coordinate care.

The number of ACOs has been growing. By the start of 2014, more than 360 Medicare ACOs will be covering about 5.3 million Medicare members. There also are close to 200 private-sector versions of ACOs across the country.

But some health care networks, including most operated by hospitals in the Kansas City area and even the Mayo Clinic itself, have been reluctant to join the first wave of ACOs.

The first Medicare ACO in the Kansas City area was started early this year by the Kansas City Metropolitan Physician Association, a consortium of a dozen independent physician practices responsible for nearly 12,000 Medicare patients.

Beginning Jan. 1, two more local organizations join the Medicare ACO program. The Physician Collaborative of Kansas City ACO combines two of the largest remaining independent primary care practices, the Encompass Medical Group and Kansas City Internal Medicine. The Kansas Primary Care Alliance ACO includes several dozen physicians employed by the University of Kansas Hospital at its Jayhawk clinics around the metro area.

Medicare estimates its saving from ACOs could reach $940 million over the program’s first four years. That barely nibbles at Medicare’s $472 billion budget. But savings could increase significantly if ACOs succeed and the program expands.

Medicare earlier this year released the 2012 results of a select group of 32 “pioneer” ACOs. Most succeeded in reducing preventable hospital visits. But just 13 saved enough money to qualify for the incentive payments, and two lost money.

The pioneer ACOs were chosen because they already had substantial experience providing coordinated care.

It could take hospitals with newly acquired physician practices five to 10 years to shape their networks into efficient Mayo-style organizations, said Caroline Carlin, a health services researcher with the Medica Research Institute in Minneapolis.

“Frankly, I don’t expect to see huge drops in costs (quickly). That takes huge re-engineering,” Carlin said.

Swensen, the Mayo radiologist, thinks it can be done and must be done to keep U.S. health care sustainable.

“But it will be very hard,” Swensen predicted. “The tools won’t work unless you have a receptive culture. We’ve been doing it for 149 years and we’re still working on it.”

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