AN ALARMING SYMPTOM AT MAYO
March 23, 2009
We could go a long way towards fixing our health care cost burden by requiring that providers charge the exact same price for a procedure, regardless of who is paying for it. Insurance companies force prices down for members of their groups, but private pay patients pay lots more, says the Minneapolis Star-Tribune.
Take for example, the mighty Mayo Clinic with its gold-plated brand name, heavyweight donors and wealthy foreign patients. It barely broke even in 2008:
- While patient numbers held steady, income from patient care tumbled by a third and Medicare was a driving force in the decline; it almost always reimburses much less than private insurers.
- For Mayo's three locations in Rochester, Arizona and Florida, government-insured patients comprised about 44 percent of patients and 33 percent of patient net revenue in 2007.
- Total number of Medicare patients seen at Mayo's three main locations in 2008: 179,000.
- The cost of doing a hip replacement vs. the amount Medicare pays (dollars lost): $3,800 per hip replacement.
However, Mayo's financial health was far better than most health-care institutions, says the Star-Tribune. For many others, 2008 was a disaster -- a year in which the triple whammy of high-deductible health insurance, sharp declines in medical centers' investment portfolios and soaring numbers of people who lost their jobs and their health insurance delivered a staggering blow to an industry once thought recession-proof.
In this grim mix, overhauling Medicare becomes more of an issue than ever. Simply spending more on this $432 billion-a-year entitlement program is not an option. Medicare costs already comprise a disturbing chunk of the nation's gross domestic product. Medicare's antiquated payment system needs restructuring, says the Star-Tribune.
Source: Editorial, "An alarming symptom at Mayo," Minneapolis Star-Tribune, March 22, 2009.
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