You could hear echoes of past debates over stadium subsidies in the chatter that followed Mayo Clinic’s proposal for up to $585 million in government financing for Rochester infrastructure as its campus grows.
So Mayo gets what it wants or it may leave, like the Minnesota Vikings were decamping for Los Angeles without a new publicly funded place to play?
Actually, the situations are quite different. While Mayo’s CEO talks of other options should its plan die, the “Destination Medical Center” initiative really only makes sense in Rochester.
And, more importantly, the threat to the state here is far bigger than no pro football, if inaction means the Mayo Clinic loses a lot of ground to well-funded competitors among global medical care centers.
Mayo employs more than 34,000 in Rochester, working in about 15 million square feet of facilities. Mayo in Rochester is a happy accident, a major global center in a small Midwestern city that gets cold in the winter and is not that easy to reach.
Perhaps it’s some indication of how much out-of-towners want a piece of the Mayo brand that Mayo had to establish an office to field inquiries from other parts of the country and world looking for a Mayo facility.
Mayo wants to stay put, serving a broader market by sharing information and expertise over an Internet connection while its clinics remain what President and CEO John Noseworthy said is “the destination for when hope is gone or when no one can figure out what’s wrong with you. That’s an outgrowth of what Mayo has been for the last century.”
Noseworthy said what’s different about Mayo’s plan from what some other medical centers have pursued is that not one penny of public investment will be for a Mayo facility or piece of hardware. Mayo plans to put about $3.5 billion of its own capital into expansion over the next 20 years.
The idea of the plan Mayo unveiled 10 days ago is for state and local government money and private investment to go toward infrastructure and amenities that will attract professional staff and patients, both of whom have other top medical centers as options.
“I’ve had a number of folks say to me at the State Capitol, ‘Maybe we would be more comfortable if you just asked us for money for your facilities,’ ” Noseworthy said, adding, “Well, I don’t think that’s what you are there for. You’re there for roads and sewers and parking and transportation.”
A well-developed transportation system with a major international airport already exists, of course, in the Twin Cities, along with shopping, hotels, major league sports, a fine opera and lots of other amenities Mayo would love to have nearby.
But it’s just not workable to set up a satellite campus in the Twin Cities and have the kind of team-based approach Mayo considers key to its care model. Rochester is where there are multiple fully staffed departments within an elevator ride of each other, a full complement of diagnostic equipment, broadly capable labs, more than 2,000 physicians and thousands of nurses and other staffers.
In the 1980s Mayo opened centers in Florida and Arizona, and they are not candidates, either, at roughly a quarter the size of the Rochester campus. While Noseworthy said they have “wonderful” relationships with public officials in those states and good regional referral networks, the global Mayo brand means Minnesota.
Noseworthy said Mayo will look at other options should Mayo’s plan stall at the Capitol, but he said he intends for it to get approved this year and is confident it will.
He has a sense of urgency, as the competition is moving fast. The economic power provided by premium health care institutions, from attracting visitors to their huge payrolls to the spinoff business activity they create, also means that Mayo’s rivals are getting plenty of public help.
One is the Cleveland Clinic, in Mayo’s league with revenue of $4.6 billion for the first three quarters of 2012 and facilities in northeast Ohio, Florida, Canada and elsewhere. It released a new master plan for its 160-acre main campus in Cleveland a little over a year ago that left no doubt it intends to be one of the handful of global medical destinations. The plan had sites identified for 14 major new buildings.
The $465 million, downtown Cleveland Medical Mart & Convention Center is set to open this year, pitched as a national and international center for medical meetings and funded by a countywide general sales tax and other public sources.
Next door to the Cleveland Clinic campus is the Global Cardiovascular Innovation Center, a kind of innovation incubator that was made possible by a $60 million grant from Ohio Third Frontier, a state program.
And talk about infrastructure, one of the first major projects in the recent renaissance of the neighborhood that includes the Cleveland Clinic’s main campus was the $200 million reconstruction of Euclid Avenue, a main thoroughfare. It included a dedicated lane for bus rapid transit called the HealthLine.
It’s a similar story in Baltimore, with a massive redevelopment project on the edge of the Johns Hopkins Medicine main campus, funded in part with state, local and philanthropic money.
Stephen Parente, a professor of health finance at the University of Minnesota’s Carlson School of Management, described himself as “kind of impressed by the audacity” of Mayo’s proposal. But maybe it’s not audacious enough.
The competition in the rarefied air of global medical centers is increasingly intense, he said. A conversation among state leaders concerned about Mayo’s future could be far broader than funding streets and parking garages in Rochester.
How about high-speed rail service from the Twin Cities? Or laying the foundation for a technology corridor that extends from the Twin Cities all the way into southeastern Minnesota?
Maybe it would surprise cautious Minnesotans, he said, that a plan to publicly fund such concepts would not be considered far-fetched in some other states or regions.
“There are a number of competing communities that don’t have a Mayo and would love to have the opportunity that a Mayo presents,” Parente said. “And they are thinking bigger.”
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