Mayo Clinic Prefers Privately Insured Patients. So What?

Philip Betbeze, April 6, 2017

Outraged? Don't be. The CEO's acknowledgment that private pay patients take precedence over other patients is a rational response to an irrational healthcare payment system.

John Noseworthy, MD
John Noseworthy, MD

You may have heard that John Noseworthy, MD, the president and CEO of the Mayo Clinic, recently told employees that the Rochester, MN-based health system will give preference to patients with private insurance over those who rely on Medicaid or Medicare.

At this point it's safe to say he wishes he hadn't said that.

Predictably, that statement opened up a nasty public relations crisis for which the health system has still not fully recovered, even two weeks later. I asked to speak with Noseworthy, but through a spokesperson, he declined to further address the issue beyond the written statement proffered after the Internet exploded in reaction to his comments.

Worst-kept Secrets
I don't necessarily blame him. Noseworthy disclosed publicly one of the worst-kept secrets in healthcare, and he's paying for it dearly in the news cycle.

He articulated what many, many hospitals and health systems struggle with—how to manage their payer mix. Many actively try to manage that mix, albeit in more subtle ways.

In fact, when meeting healthcare executives for the first time, a description of the health system's payer mix usually happens right after they introduce themselves. 

Noseworthy and Mayo are suffering because Noseworthy had the temerity to admit that healthcare, at least as we practice it in this country, is a business. And businesses exist to maximize revenue under the law.

The mess all started when the Minneapolis Star-Tribune got a transcript of the videotaped speech, made late last year to employees, in which Noseworthy said the health system essentially would prioritize commercially insured over public-pay patients to bolster the bottom line.

His actual words were more nuanced, according to the Star-Tribune:

"We're asking... if the patient has commercial insurance, or they're Medicaid or Medicare patients and they're equal, that we prioritize the commercial insured patients enough so... we can be financially strong at the end of the year to continue to advance, advance our mission."

Noseworthy even said in the same speech that the Clinic would always take patients regardless of ability to pay, in circumstances where such patients could not find that medical expertise elsewhere.

Piling on Misses the Point
The predictable piling on of bloggers and bloviators in search of page views described Noseworthy's faux pas in biting, breathless headlines.

Philip Betbeze

Philip Betbeze is the senior leadership editor at HealthLeaders Media.

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