Mayo Clinic's sudden preference for not-poor patients has Minnesota DHS 'concerned'

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Mayo Clinic made $11 billion last year, but with fewer poor patients, it could've made even more. Star Tribune, Glen Stubbe

Mayo Clinic's patient list includes some of the most well-known hospital patients in American history. 

John F. Kennedy (rumored), Ronald Reagan, Johhny Carson, Johnny Cash, Groucho Marx, Ernest Hemingway, and Charles Lindbergh got treated there. New York Yankees icon Lou Gherig was in Rochester, Minnesota when doctors told him he wouldn't play baseball again, and was dying.

The list of elites goes on. And if Mayo can get away with it, there'll be a lot more like them, and a few fewer like... well, you.

On Wednesday, the Star Tribune got hold of a speech transcript from Dr. John Noseworthy, CEO of the esteemed hospital, who made the curious mistake of admitting that although his hospital's a nonprofit, it's still in the money-making business. In a talk given to employees, Noseworthy said Mayo Clinic would continue taking poor people, on Medicaid, and old ones, on Medicare. 

But if they show up at the same time as someone covered under private insurance, those less-fortunate patients can consider themselves triaged to the back of the line.

Noseworthy explained:

"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."

Mayo's reasons for preferring privately insured sick people are simple. They pay more. Medicaid payments, which come out of state and federal budgets, come to as little as 50 percent of the price hospitals can stick to privately insured patients.

In late February, Mayo reported its yearly earnings for 2016, which climbed to $11 billion, up from $10.3 billion the year before. Its combined net "income" those last two years is approaching $1 billion, all of which, Mayo assures, gets "reinvested in [Mayo's] practice, research and education missions."

But Mayo could be making even more. In 2016, it provided a combined $2.3 billion in "unreimbursed" Medicare and Medicaid coverage, a figure that does not include money lost on discount rates granted to those publicly funded programs.

So the move makes a certain amount of cold-blooded business sense. Though, you might be wondering: Is it even legal?

That same thought occurred to Department of Human Services Commissioner Emily Piper, who on Thursday told Minnesota Public Radio she was "surprised and concerned" when she read Noseworthy's plainly stated priorities. The DHS is investigating whether Mayo's business-first strategy is a violation of state civil rights or human rights laws.

Tom Barker, former general council for the Centers for Medicare and Medicaid Services, says what Noseworthy admitted Mayo's doing isn't "blatantly illegal." But preferring the privately insured to the poor does put the hospital in something of a "grey area," since hospitals receiving federal funds are explicitly subject to civil rights laws under the Affordable Care Act.

A "grey area"? Gee, Dr. Noseworthy, we're no professionals, but ... doesn't sound so good. You might wanna get that looked at before it gets worse.


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