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Lawrence J. Massa: Critics put up false roadblocks to Medicare payment reform

They say we can't replicate Mayo. Of course not, but we don't need to. There are many models.

By LAWRENCE J. MASSA

Last update: October 23, 2009 - 7:27 PM

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The No Child Left Behind Health Care Reform Plan

This article points to some nice sounding rhetoric. It is not backed up by good science. All would agree that MN/WI providers should not … read more get short changed. All would agree that good providers should not get paid less. The devil is in the details. Encouraging, if not requiring, a hospital to use process improvement practices to create high quality, cost effective methods of delivering care is a great idea. Paying them for patient health outcomes will create the wrong incentives unless there is some cost effective way to control for all the other variables that affect the patientÃ¢â¬â¢s health outcome. Location is everything. Who your patients are and where they come from is everything. If you are located in a poor area, in an area with pollution that is causing more illnesses, in an area with little or much poorer coverage for poor people, you will have worse outcome results. Cherry ! picking healthy people is already done by insurance companies. We don't need to set up an incentive system for docs and hospitals to do the same. Again, quality improvement as meaning process improvement is important and will result in better outcomes. But you cannot compare health outcomes without adjusting for all the other variables and that is a very expensive endeavor. You can make dramatic changes in hospital costs if you: Make them all non-profit. Put them all on a budget. That means an independent entity would approve an annual budget and they would be paid out of the $ pool to cover that budget. They would submit annual audits and requests for any changes. There would cease to be incentives to over build, etc. and eliminating all of the time spent on those horrendous itemized bills would cut costs dramatically. No longer would they feel obligated to create the exec. jobs with pay and perks set to be like the big U.S. companies who pay ridiculous amounts for top level corporate management. They can focus on providing health care to their service area instead of focusing on making money. (Mayo is in a world of its own in terms of service area since they serve the whole world.) And, they must provide services and tech. offerings that are approved by the independent entity. No more having two hospitals next to each other buying the same big buck items and then competing to get the tests ordered to pay for them. No more closing a unit like an ER , even though desperately needed, just to satisfy the stockholders' bottom line.

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A recent Washington Post article ("Is the Mayo Clinic a model or a mirage?", linked at StarTribune.com), questioned the merit of changing Medicare payments to reward cost-effective hospitals and doctors. The critics' reasoning is that doing so is risky because it will be "difficult for even the most dutiful hospitals elsewhere to mimic" the Mayo Clinic.

The proposed reforms, however, do not require that Mayo be mimicked. This is like arguing that we shouldn't try to reduce our dependence on foreign oil because renewable energy seems tricky.

There is only one Mayo Clinic, and any attempt to replicate it would be difficult indeed. It earned its worldwide reputation by delivering state-of-the-art, patient-centered, high-quality care year after year for more than a century. Its scope of care, research, technology and international stature are unrivaled.

It is also true, however, that Mayo's ability to provide Medicare patients high-quality, low-cost care is not unique. In fact, Mayo is just one of hundreds of hospitals and health systems delivering better-than-average care for less-than-average costs to Medicare patients. According to the Dartmouth Institute for Health Policy, the average cost to provide medical care to a Medicare beneficiary is approximately $8,300 per year, whereas Minnesota's health care providers delivered better, higher-quality care for only $6,600.

And Minnesota's health care providers have consistently ranked first in the nation in overall health care quality performance. According to the 2007 National Healthcare Quality Report from the Agency for Healthcare Research and Quality, Minnesota hospitals rank in the top quartile in every measure gauged.

Pick any region of Minnesota, Iowa, North Dakota, South Dakota, Wisconsin, Utah, Montana, Washington or Oregon, most of New York, or many regions in California, and you'll find providers of every size, shape, organizational structure and patient mix delivering higher-quality care to Medicare patients for less-than-average cost.

Unfortunately, Medicare's payment system has distorted incentives that result in these high-value providers getting paid far less than providers with lower quality and higher costs.

In Minnesota, we have plenty of other examples of high-value hospitals and health systems serving a very diverse population. In the Twin Cities, for example, we have one of the largest Hmong and Somali populations in the United States. More than 80 languages are spoken by the children in our schools. According to the Diversity Council in Rochester, Minn., where the Mayo Clinic is headquartered, 11 percent of the population of that city is from other cultures -- Africa, Somalia, Vietnam, Laos, Cambodia, Bosnia and many other countries around the world. To say, as some have suggested, that Mayo and Minnesota providers do not face the challenges of meeting the needs of diverse populations is simply not true.

The hospitals, health systems, physicians and other providers in Minnesota, as well as many health care providers in other states, save Medicare billions of dollars a year by delivering better care at lower costs. The fact that Medicare pays these providers, including Mayo, much less -- often less than the actual cost of providing care -- is indefensible.

The focus should be on truly reforming health care delivery and payment to improve access, quality and affordability for all Americans.

Lawrence J. Massa is president and CEO of the Minnesota Hospital Association.

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