By Christopher Snowbeck
TwinCities.com
February 5, 2011
Bloomington-based HealthPartners last year started marketing health plans that feature a network of hospitals and doctors that doesn’t include the Mayo Clinic. In exchange for not having access with low co-payments to the iconic Rochester, Minn., clinic, subscribers pay lower premiums when they select a HealthPartners plan with Mayo as an out-of-network option.
Last year, Eagan-based Blue Cross and Blue Shield of Minnesota also started emphasizing health insurance products for individuals in which Mayo isn’t in the network of providers.
Mayo has been celebrated nationally for providing high-quality and low-cost health care, but health insurance brokers say the local reputation is different as far as cost goes.
“Mayo is cheap only compared to other national care centers, but in general is a higher-cost center when compared to its Minnesota peers,” said Christopher Schneeman, a health insurance broker with SevenHills Benefit Partners in St. Paul.
“The Mayo Clinic is world-class,” said Greg Sailer of Sailer Benefit Services in Lake Elmo. “But it’s expensive, and you’re going to pay for it.”
Mayo Clinic officials argue that the Rochester center offers greater value by providing comprehensive care that steers patients to the most-effective treatments. That ultimately adds up to lower overall cost, the clinic says.
“When we looked at Mayo’s total cost of care — the combination of price and utilization — they, on average, have a higher total cost of care than other health systems that are seeing comparable groups of patients,” said (Andrea Walsh, chief marketing officer of HealthPartners).
http://www.twincities.com/ci_17298533
Comment:
By Don McCanne, MD
For many years, the most common example given of the variations in the costs of health care demonstrated by the Dartmouth Atlas was the high costs of health care in Boca Raton, Florida when compared to Rochester, Minnesota, home of the Mayo clinic. These observed variations throughout the nation have led to the recommendation – now enacted in the Affordable Care Act (ACA) – to establish accountable care organizations (ACOs).
Although the precise details of what constitutes an ACO have not yet been released by HHS, the law states that the ACO will be “accountable for the quality, cost, and overall care of the Medicare fee-for-service beneficiaries assigned to it.” Payment will be based on a “Medicare Shared Savings Program,” in which the ACO shares with the government the savings for which it is accountable. It is a program designed to reduce health care spending.
Since Mayo Clinic certainly has the capability of providing overall care of the patient, it would seem to be an ideal institution to serve as an ACO. In fact, the authors of the legislation had in mind institutions such as Mayo as important models that could provide high quality care at a lower cost.
But will Mayo deliver at a lower cost? Not according to the current experience in Minnesota. Mayo argues that they provide greater value because they provide “comprehensive care that steers patients to the most-effective treatments,” even if that care is more expensive than elsewhere in Minnesota. (Time for a little soft shoe?)
The point is that the cost savings in ACA, such as the ACOs, are not much more than a fantasy at this point. And for this we gave up universal coverage and have established under-insurance as the new standard. We can still reach our goals of comprehensive, affordable care for everyone by replacing ACA’s financing system with an improved Medicare for all.