Schafer: Mayo's clinic for business execs serves as reminder

  • Article by: LEE SCHAFER , Star Tribune
  • Updated: November 1, 2013 - 8:57 AM

The recent announcement by the Mayo Clinic of a more than $67 million gift completely overshadowed news of a $10 million gift announced just a week earlier to help expand Mayo’s center for executive health in Rochester.

The contrast between the two announcements could not have been more striking. Robert and ­Patricia Kern gave $67 million that Mayo intends to use to improve health care for everybody. The other news release reads like a product announcement, of a premium offering that was already top shelf and is just getting better. In a political environment with health care cost and access so much in the news, it really was surprising to read such tin-eared language.

“The new center is located on the fifth floor of the Mayo Building and is the centerpiece of Mayo Clinic’s worldwide program offering premium services and all-inclusive care targeted for busy business leaders,” it said.

“Within this center, executives will experience a quality, relaxed atmosphere with concierge services, a complimentary lounge with food and beverages and a full range of business services. ... Executive patients will experience an uninterrupted health care visit with applicable tests, physician appointments and services in one central location.”

Really? A concierge? And complimentary lounge? While the rest of us sit and wait, thumbing through nine-month-old copies of Redbook?

It’s possible to hear a less-promotional tone in an announcement of Black Friday deals at J.C. Penney. It was all about improving the customer experience for those really busy people who have the dough to pay for it.

And it sure isn’t the way Mayo’s leadership explained the $67 million gift.

With that one, from the Wisconsin couple Robert and Patricia Kern, Mayo said it would be able to do more to “re-engineer health care” so “patients everywhere get the high-quality, high-value care they need and deserve.”

The commercial nature of the executive health announcement, in fairness to Mayo, reflects that it’s got lots of competition in this niche of executive health, with the likes of the Cleveland Clinic. Mayo has long been one of the best-known providers of what’s known as the big physical — a very thorough patient exam. It can be a multiday experience, and if physicians find a problem, the patient happens to be at a pretty good place for treatment.

Mayo did not respond to a request to discuss the service, but it’s known that these physicals can cost several thousand dollars. My health insurance plan said I can get one at Mayo any time I choose — if I am willing to pay for it.

The $10 million for the program came from W. Hall Wendel Jr., who had been instrumental in shaping today’s Polaris Industries. None of this is meant to criticize his extraordinary generosity, and he should be celebrated in the same way the Kerns were. The existence of a service like Mayo’s is hardly a bad thing, and I am certain it’s made a difference in the lives of many patients.

And it’s actually helpful, when health care reform is being debated, to be reminded that health care is a service available in a functioning market. There are plenty of buyers perfectly willing to pay premium prices.

In the ongoing debate over government’s role in the health care marketplace, you sometimes see the term “public good” being used. But this is mostly off the mark, as Mayo’s announcement suggests.

The thing is, a public good perhaps isn’t what some folks think it is. It’s not just something that would be “good for the public” or that would be good to get. What a public good is, in the usual definition, is something people use that is both non-rivalrous and non-excludable.

OK, that definition seems unhelpful even to economists, but it’s actually not that tricky. Non-rivalrous means any use by one individual does not reduce its availability to others. Hot dogs are rivalrous, because at some point the concession stand will run out of them and two hungry football fans can’t both eat the last one.

The term non-excludable means that there is no way to stop someone from using a good. That’s what makes a streetlight a pretty good example: There is no way to turn on a light yet make it stay dark just in front of the house of someone who didn’t pay.

So a street light is a public good. A big physical at Mayo Clinic is clearly not.

This is more than just an academic question, as confusion over this kind of thing makes it more difficult to make good choices. Public goods are things that you just can’t ­readily get in the market, as there is not enough incentive to produce them. But health care is clearly not one of them, as there are plenty of providers doing a great business taking care of patients.

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