NCPA - National Center for Policy Analysis


January 8, 2010

President Obama is a great admirer of the Mayo Clinic.  Time and again he has extolled it as an outstanding model of health care excellence and efficiency.  So perhaps the president will give some thought to the Mayo Clinic's recent decision to stop accepting Medicare payments at its primary care facility in Glendale, Arizona, says columnist Jeff Jacoby.


  • More than 3,000 patients will have to start paying cash if they wish to continue being seen by doctors at the clinic; those unable or unwilling to do so must look for new physicians.
  • For now, Mayo is limiting the change in policy to its Glendale facility, but it may be just a matter of time before it drops Medicare at its other facilities in Arizona, Florida and Minnesota as well.

Why would an institution renowned for providing health care of "the best quality and the lowest cost" choose to sever its ties with the government's flagship single-payer insurance program?  Because the relationship is one it can't afford, explains Jacoby:

  • Last year, the Mayo Clinic lost $840 million on its Medicare patients.
  • At the Glendale clinic specifically, a spokesman told Bloomberg, Medicare reimbursements covered only 50 percent of the cost of treating elderly primary-care patients.
  • Not even the leanest, most efficient medical organization can keep doing business with a program that compels it to eat half its costs.

The Centers for Medicare and Medicaid Services, a branch of the U.S. Department of Health and Human Services, estimated last month that the Senate bill would squeeze $493 billion out of Medicare over the next 10 years.  As a result, it cautioned, "providers for whom Medicare constitutes a substantive portion of their business could find it difficult to remain profitable and… might end their participation in the program."

Nearly six months ago, the Mayo Clinic tried to sound an alarm, says Jacoby.  Instead of making American health care better and more affordable, it warned, the legislation working its way through Congress will do the opposite and the real losers will be the citizens of the United States.

Source: Jeff Jacoby, "Medicare and the Mayo Clinic," Jewish World Review, January 3, 2010.

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