Dr. John Noseworthy is best known as president and CEO of the Mayo Clinic, but he’s also a governor with the World Economic Forum (WEF). At the group’s 46th annual meeting in Davos, Switzerland, earlier this month Noseworthy spoke on a WEF panel with U.S. Health and Human Services Secretary Sylvia Burwell and others about the future of health care. In a phone interview after the discussion, Noseworthy talked about Mayo’s work for Medicare’s value-based purchasing program on hip and knee surgeries, and whether the developing world can benefit from lessons learned in expensive health care systems in developed nations like the U.S.
Q: The theme for Davos this year was the “Fourth Industrial Revolution.” What does that mean for health care?
A: We’re entering an era of enormous speed and scale of change, with impact across all integrated systems in multiple sectors of the economy, if you will. And the speed of change and the breadth of that is unprecedented in human history. And essentially health care, and what health care is going through, is a poster child of this.
Q: Why is health care a big topic at Davos?
A: What has been shown very clearly is that economic growth is tied to the health of the population and the health investment in the population. So if you want to have a strong country, with a strong economy, you better make sure you have a healthy country where you are looking after it. Because of the recent evidence that has shown that is the case, the World Economic Forum has made it a priority to advance health and wellness and disease prevention. And that is particularly a focus in the emerging nations. Prevention is so important. And then in developed nations, how do you create a sustainable high-quality health care system where you get better outcomes at lower costs?
Q: What’s happening in the U. S.?
A: Secretary Burwell has said that by the end of this year, 30 percent of [Medicare] payments will be directed to better performance in value — in other words, better outcomes. And they are going to pay less for groups that are not producing safe, high-quality health care. And by 2018, that will go to 50 percent. So this alternate payment mechanism that you’ve read so much about, that the government is driving, is on a [quickly approaching] timeline.
Q: How is Mayo working with the federal government to refine value-based purchasing?
A: I brought a team to Washington in the third quarter of last year. They have come to visit us. We have gone back to Washington. And we basically have a very tight timeline to develop advice for the government of how you recognize higher quality care at lower cost. For their first project, which is on joint replacement, hip and knee replacement, they have something called a bundled payment mechanism, which is now mandatory. We’ve turned to our Center for the Science of Health Care Delivery, one of the innovations that we’ve invested heavily in, to look at that and say what have we learned the last several years? How do we demonstrate that we can control costs and improve outcomes through careful analysis of our data? And we’ve done that, and we are sharing that with [Burwell].
Q: The government wants to reduce the wide variation in health care costs and quality. Is it doable?
A: For a pretty routine case, you can engineer the health care in a process that is very efficient and very safe, and allows you to do a large number of cases and control the costs. But you will always have 10 or 15 percent of the patient population who have multiple comorbidities, multiple conditions, and those together drive up the cost. If that’s the way it is, you then identify that population that needs more help, and you focus like a laser on identifying how we can make their care better at a lower cost. That’s the partnership we have with [Medicare]. Hips and knees are their first out of the gate, but they’re talking about what are they going to do next. They mentioned congestive heart failure. They mentioned heart attack, pneumonia.
Q: If value is a combination of price and quality, can’t you set the price to get the value that you want?
A: Every health care organization sets prices for their services, and then negotiates those prices with the payers based on your ability to demonstrate that you do the work well, safely and at lower cost overall. Those are line-item charges. If you go to a place like Mayo Clinic, where there is integrated care, you often need less diagnostic work-up and can get the answer more quickly, which greatly reduces the cost of the care overall. Those negotiated prices are based on years of demonstrating more accurate, safer care more quickly, and that helps us drive the cost of health care down overall, as opposed to simply restricting the cost of any single line-item. It’s the team approach that gets there more quickly that reduces the overall expense.
Q: What was surprising to you at the conference?
A: One of the insurance company folks talked about how they are motivating, incentivizing their employees to more healthy behaviors. This was a very memorable item. In their cafeteria, where employees work, you can buy a cheeseburger. But it will cost $7. You can buy a veggie burger and it will cost you $2.50. They’re moving on that, and others have started to show that these healthy choices — exercising, weight control, better sleep, all the things we do in our wellness programs — actually reduce absenteeism and improve the job satisfaction of the worker.
Q: You were asked on the panel whether the developing world should invest more in wellness and intervention. What did you say?
A: Of course, that is absolutely critical. The young people, the Gen-Xers and millennials [in the developed world], they are very keen on healthy choices in food, and that has driven the food manufacturers to reduce the fat content of food and reduce the calories, reduce the sizes of processed foods. What I said was, your generation, the under-35-year-olds and so on, they should learn from this, be engaged, make healthy choices, so that we can delay if not prevent many of the conditions that have developed in North America, China and so on, with obesity driving hypertension, heart failure, kidney failure, stroke, cancer and so on.
Q: So don’t just follow the developed world’s example, but learn from our mistakes, too?
A: Learn from our mistakes. Again, the complex health care ecosystem that has grown up in North America, that’s nothing to necessarily copy and try to put into a developing nation. Learn from our mistakes, create leaner, more-aligned incentives for health and wellness. And they’ll be further ahead. That is why these global dialogues are so helpful.