Mayo Signs Deal with Shriners, Consolidates Two Hospitals

Mayo Clinic has entered into a formal collaborative with physicians at Shriners Hospitals for Children – Twin Cities, which will become the first pediatric hospital to join the Mayo Clinic Care Network .

"The relationship between Shriners and the Mayo Clinic Children's Center has been a long-standing and rewarding one, and by formalizing our collaboration, we'll be able to work even more closely together to enhance the care we provide children," David Hayes, MD, medical director, Mayo Clinic Care Network, said in prepared remarks.

Shriners provides specialized pediatric orthopedic care in a seven-state region and is part of a network of children's hospitals located across the U.S., Canada and Mexico. Mayo Clinic Children's Center specialties include orthopedics, rheumatology, hand surgery and neurology and consist of 200 pediatricians and surgical subspecialists from more than 40 medical and surgical specialties. The center provides care for more than 50,000 children and teens each year, Mayo Clinic said.

In a separate announcement, Mayo said that Saint Marys and Methodist Hospitals in Rochester will transition to a single licensed hospital operating under the name Mayo Clinic Hospital – Rochester.

The change is effective January 1, 2014 and Mayo Clinic said in a media release that the consolidation will "better reflect Mayo Clinic's integrated hospital practice, ensure accurate reporting of data, and reinforce our ability to prove the value of Mayo Clinic care, while still honoring the commitment to the organization's founders' values."

Mayo Clinic said it now has a "single integrated hospital practice" divided between two hospital licenses and two legal entities, and regulations mandate separate reporting of quality, financial and operating data for the two hospitals to organizations such as the Centers for Medicare & Medicaid Services, The Joint Commission, and The Leapfrog Group.

The separate reporting had created an increasingly "incomplete and incorrect picture" of the care being delivered. "Reporting as one hospital will ensure that regulatory agencies, payers and patients have accurate information about Mayo Clinic," the clinic said in a media release.

The change was approved by the Academy of Our Lady of Lourdes (Sisters of Saint Francis), and Saint Marys Hospital will no longer be designated as a Catholic healthcare institution.

"Although the Catholic identity and the name of Saint Marys Hospital will change, much will remain the same," Sister Marilyn Geiger, Sisters of Saint Francis, said in prepared remarks. "The chapel will continue to be used as a Catholic chapel, a public place of worship available to patients, their families, employees, and local residents. The Sisters of Saint Francis and Mayo Clinic will continue to work together to perpetuate the Franciscan Mission and the values of Mother Alfred Moes and Dr. W.W. Mayo."

Healthcare economist Adam Powell says he believes the two initiatives are being driven by "somewhat different motives."

"The Shriners initiative is about increasing revenue, while the hospital integration is about reducing variability in quality measures," says Powell, president of Payer + Provider Syndicate, a Boston-based consulting firm.

"The participation of Shriners in the Mayo Clinic Care Network is beneficial for Mayo, in that it provides an additional customer for the eConsults and AskMayoExpert services. This move would have been advantageous for Mayo under any circumstances, but has likely been facilitated by recent technological advances and greater acceptance of telemedicine. The general trend towards greater use of evidence-based medicine has likely also motivated Shriners to adopt the AskMayoExpert service."

"The integration of Saint Marys and Methodist Hospitals within the Mayo system represents an effort to reduce costs and red tape, in light of growing hospital regulation and reporting requirements," Powell says. "By combining quality data from two hospitals, Mayo will have data representing a larger population, and as a result will have less random variation in outcomes. Given that value-based contracts are tied to quality outcomes, it is vital for Mayo to do everything that it can to reduce random variation. As hospital systems transition towards value-based payment, we may see more efforts to stabilize metrics."