Mayo CEO on Minnesota expansion: 'We'll have to rethink ... the best use of our money'

  • Article by: KEVIN DIAZ , Star Tribune
  • Updated: April 9, 2013 - 11:28 PM

He warned legislators on eve of hearing on $500M tax proposal.

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Dr. John Noseworthy, Mayo Clinic president and CEO, spoke Tuesday at the National Press Club in Washington, D.C.

Photo: Kevin Diaz, Star Tribune

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– In blunt words aimed squarely at the Minnesota Legislature, the president and CEO of the Mayo Clinic warned Tuesday that the hallowed medical institution has “49 states” eager to have Mayo’s planned multibillion-dollar expansion if the state is unwilling to pitch in.

“We’re never going to leave Minnesota, and we don’t want to leave Minnesota,” Dr. John Noseworthy said in an interview at the National Press Club, where the CEO made a pitch for federal investment in health care and medical research. “But we’ve got to decide where we’re going to put the next $3 billion.”

That money would be part of a $5 billion, 20-year expansion in Rochester dubbed “Destination Medical Center,” which would require a half-billion dollars from state officials for infrastructure improvements.

“If they say yes, that’s great, we want to stay in Minnesota,” Noseworthy said. But, he cautioned, “If they say no, or you’re going to have to go for a bonding bill every year for the next 30 years, we’ll have to rethink about whether that’s the best use of our money.”

Noseworthy, a neurologist, said Mayo is not threatening to leave Rochester, where the renowned clinic was established 149 years ago.

But in a clear message to the Legislature, where the clinic’s proposal is encountering significant sticker shock, Noseworthy pointed out that “there are 49 states that would like us to invest in them. That’s the truth.”

Noseworthy’s comments came on the eve of a House tax committee hearing, where skeptical legislators have split Mayo’s $500 million plan into separate tax and bonding provisions, a development that has concerned backers.

Mayo, the state’s largest private employer, says the taxpayer funding is needed for infrastructure improvements to keep up with the clinic’s expansion plans in Rochester.

Noseworthy said the clinic plans to pour $3.5 billion of its own money into the project and $2 billion from other potential private investors, fostering the city’s growth as an international destination, creating 40,000 jobs and expanding its tax base.

None of the proposed state money would be earmarked for the clinic, he said. “We just hope they’ll help us build some sidewalks and sewers,” he said.

Noseworthy also flexed some lobbying muscle in Washington, where he met with members of Congress on Tuesday to promote funding for medical research, quality care and payment reform under Medicare. Lagging federal provider rates have cost the clinic $128 million, he said, on top of another $47 million in the first year of the sequester budget cuts.

“This is a big deal,” he told the National Press Club audience. “It’s a very serious thing for all of us.”

The sold-out event, which included U.S. Sen. Amy Klobuchar, D-Minn., is an indicator of the Mayo Clinic’s influence in promoting a Minnesota model that drives down costs by emphasizing quality of care and collaboration among medical providers.

But the health care giant faces a tougher audience in St. Paul, where legislators are raising questions about the amount of the requested taxpayer assistance to a city of little more than 100,000 residents, about a third of them in the health care industry.

Noseworthy said the clinic is responding to legislators’ concerns.

“Yes, we’re listening to that input, and we’re trying to see how are we going to get the right answer,” he said. “It’s being reviewed, amended, revised and rethought as we go through.”

Some legislators have suggested that Rochester could pony up more for the stadium-size price tag by raising local sales tax rates.

But Noseworthy said the town doesn’t have the tax base to support the infrastructure improvements that could justify Mayo’s further expansion.

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