NCPA - National Center for Policy Analysis

MAYO CLINIC IN ARIZONA TO STOP TREATING SOME MEDICARE PATIENTS

January 5, 2010

The Mayo Clinic, praised by President Barack Obama as a national model for efficient health care, will stop accepting Medicare patients January 1, 2010 at one of its primary-care clinics in Arizona, saying the U.S. government pays too little.

Mayo's move to drop Medicare patients may be copied by family doctors, some of whom have stopped accepting new patients from the program, said Lori Heim, president of the American Academy of Family Physicians, in a telephone interview yesterday.

"Many physicians have said, 'I simply cannot afford to keep taking care of Medicare patients,'" according to Heim, a family doctor who practices in Laurinburg, North Carolina.  "If you truly know your business costs and you are losing money, it doesn't make sense to do more of it."

  • The Mayo organization had 3,700 staff physicians and scientists and treated 526,000 patients in 2008.
  • It lost $840 million last year on Medicare, the government's health program for the disabled and those 65 and older.
  • Mayo's hospital and four clinics in Arizona, including the Glendale facility, lost $120 million on Medicare patients last year.
  • The program's payments cover about 50 percent of the cost of treating elderly primary-care patients at the Glendale clinic.

"We firmly believe that Medicare needs to be reformed," says Michael Yardley, a Mayo spokesman.  "It has been true for many years that Medicare payments no longer reflect the increasing cost of providing services for patients."

Mayo will assess the financial effect of the decision in Glendale to drop Medicare patients "to see if it could have implications beyond Arizona," he says:

  • Nationwide, doctors made about 20 percent less for treating Medicare patients than they did caring for privately insured patients in 2007, a payment gap that has remained stable during the last decade, according to a March report by the Medicare Payment Advisory Commission, a panel that advises Congress on Medicare issues.
  • Congress last week postponed for two months a 21.5 percent cut in Medicare reimbursements for doctors.

Source: David Olmos, "Mayo Clinic in Arizona to Stop Treating Some Medicare Patients," Bloomberg News, December 31, 2009.

For text:

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aHoYSI84VdL0

 

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