The Mayo Clinic, praised by President Barack Obama as a national model for efficient health care, will stop accepting Medicare patients as of tomorrow at one of its primary-care clinics in Arizona, saying the U.S. government pays too little.
More than 3,000 patients eligible for Medicare, the government’s largest health-insurance program, will be forced to pay cash if they want to continue seeing their doctors at a Mayo family clinic in Glendale, northwest of Phoenix, said Michael Yardley, a Mayo spokesman. The decision, which Yardley called a two-year pilot project, won’t affect other Mayo facilities in Arizona, Florida and Minnesota.
Obama in June cited the nonprofit Rochester, Minnesota-based Mayo Clinic and the Cleveland Clinic in Ohio for offering “the highest quality care at costs well below the national norm.” 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.
My former primary health care Doctor stopped taking new medicare patients 10 years ago. Last December he retired…medicare and supplemental insurance don’t pay enough per patient to offset the massive amount of paper work required to file the claim and the salary of the extra employees needed to push the papers.
Frances Scott
Overall,
[blockquote]”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 spokeswoman Lynn Closway said.
Mayo’s hospital and four clinics in Arizona, including the Glendale facility, lost $120 million on Medicare patients last year,…”
[/blockquote]
It would be interesting to see the accounting principles used in coming up with those figures. I am not sure if these are real loses or relative loses. Real losses can be found in underpayments for goods and services that have measurable costs. Examples would be Medicare paying less than the aquisition costs for chemotherapy, underpayments for radiographic procedures, and 2010 no payment for hospital consultaion codes.
Undergroundpewster,
Please refer to this URL for Mayo Clinic annual reports, including financial statements – http://www.mayoclinic.org/annualreport/.
While it does not have the detail of a SEC 10-K, it shows that they appear to be suffering from cuts in Medicare reimbursements. If you want to see the latest 990 forms they have filed with the IRS try http://foundationcenter.org and search for Mayo Clinic.
I am sure, speaking as a CPA, that they follow all the GAAP rules applicable to them. Your definition of “real” losses appears to leave out indirect expenses incurred in providing medical care; e.g., depreciation of equipment, pension costs for personnel, administrative costs for complying with government regulations. These types of costs are routinely part of government contract, so I have no reason to believe the Mayo Clinic would not include them in their costs of providing services to Medicare patients.
This article points out the insanity of the current health care bills that purport to save hundreds of billions by cutting Medicare payments. Government officials are either lying, or they truly do intend to ration care.
I also seem to remember a part of the health care bill that prohibits those eligible for Medicare from paying additional funds on their own to make up the difference between what Medicare pays and what is billed.
You do realize that Medicare pays at the 25th percentile, I trust? As to why a business cannot run off 1/4 payment of the going rate, that I leave in simple mathematical skills unpossessed by Beltway inhabitants and all those who presume the current healthcare debacle to be a positive.
I firmly believe that all the impoverished in this most affluent and profit-driven nation in the world have a duty to sacrifice themselves and die to keep the status quo and preserve free market capitalism. Those who make the decisions to refuse care for the indigent can always console themselves and relieve whatever guilt (though I do not believe that guilt is really an issue for them) they may feel by blaming the government.
And we believe, because we refuse to face the reality faced by so many in our day, that American corporate medicine is utterly pure and free of corruption. What meadow muffins.
As for Ms. Scott’s suffering doctor, what was the cost of his retirement home and where is he living? Has he applied for welfare yet?
Dan Crawford, I will not argue for a moment that we need better means of providing access to healthcare in this country to those who can ill afford it, but this sort of sarcasm is simply out of touch with the reality of what Medicare reimbursements (to which private insurance reimbursements are also pegged) do to medical practices.
I ceased taking new Medicare patients earlier this year, because more than 50% of my visits (I am a primary care internist) are with Medicare patients. I am currently making (with adjustment for inflation and cost of living rises) less money than I was when I started in practice 17 years ago – and even then I was near the bottom of the range for internists salaries. And I’m a physician in some demand in the university town in which I practice.
My family and I live comfortably – but that comfortable lifestyle would not be possible without dividend income from my wife’s family investments. I don’t own – nor will I own – a retirement home, my family haven’t had a real vacation in several years (because we can’t afford it), and we don’t drive snazzy cars (in fact, my wife’s minivan is working on 250,000+ miles at this point, and could seriously stand replacement). So despite my being in some demand (I have people calling on nearly a daily basis wanting to become new patients), because of a serious drop in income that I’ve experienced in the last eight years (largely because of Medicare reimbursements) I’m among those people who regret not being able to provide more for their families than they were able a decade or so ago, when the costs of providing for them rise steadily, year after year. (And this in the face of seeing friends in the business and academic worlds whose careers have gone from strength to strength both in achievement and in financial compensation.)
Oh, yes – and this is after paying back about $80,000 in debt for medical school, which we did relatively quickly thanks to my wife’s financial ability. And that was debt accrued in the late 1980s. Debt for physicians graduating medical school now is usually at least double my figure. Remember too that for several years of residency (the length of time depending on the speciality, and on the length of fellowship for the subspecialty), one is paid something on the low side of minimum wage for the number of hours put in.
(Odd how no one’s healthcare overhaul does anything about helping medical students afford their education, whose costs – like those of higher education generally – have exploded in the last twenty years.)
I don’t think I’m entitled to anything simply because I chose to practice medicine and to incur the costs of learning to do that, but the simple fact of the matter is that Medicare reimbursements are a large factor in a shocking decline in the number of medical students choosing to go in to primary care medicine (internal medicine, family medicine) and will at some point seriously affect the numbers of people choosing to go into medicine period. What I’ve noted before about my own financial situation and the increasing number of my free-time hours spent doing “paperwork” (all “virtual” on an electronic medical record to make it easier to file the requisite materials for actually getting reimbursed by Medicare and the various private insurances) at a time when I want to spend more time with my adolescent children before they leave home, and I’m seriously questioning my choice of vocation at this point. But you can jeer all you want, relying on a well-worn stereotype of physicians as corrupt fat cats who are only in it for the money. And you can also thank the effects of Medicare reimbursements for the increasing wait times you’ll have to get in to see a primary care provider in the future – that is, [i]if[/i] you can get in to see a primary care provider.
RE: “I firmly believe that all the impoverished in this most affluent and profit-driven nation in the world have a duty to sacrifice themselves and die to keep the status quo and preserve free market capitalism.”
What “free market capitalism”? We’re talking about Medicare — which is not, under whatever definition one uses, “free market capitalism” — and its catastrophic failure.
RE: “Those who make the decisions to refuse care for the indigent . . . ”
Huh? Medicare. Not Medicaid — which is for the poor.
Furthermore, laws prohibit — that’s right, prohibit under pain of criminal penalty — physicians from cutting patients a break if they accept Medicare.
Dan Crawford continues to revel in displaying his utter ignorance.
But not to worry. Even when it’s proven that State-run collectivist care [i]does not serve the people it is intended to serve[/i] but rather hurts them and denies them care, he will continue to decry “free market capitalism” because . . . it’s more important to hate “capitalism” than to actually serve the impoverished that he claims to care about so very much.
Todd Granger, above, highlights what many of my age are worried about. I’ll be on Medicare in less than four years. There are no other options for insurance for 65+. I presume my internist won’t drop me, but I wouldn’t blame him if he did, since the government will underpay him for treating me and forbids me to make up the difference to him, as I am able to do. And if, in the future, my husband and I were to relocate to be near children as we age, there’s no guarantee we’d be able to have a family physician at all.
It seems to me that as a first step towards handling costs, we should all be required to pay the doctor in return for a form which will allow us to file a claim with the insurance company or Medicare. This business of walking out of the doctor’s office only $20 poorer, making the doctor and insurance company/Medicare responsible for the rest, is part of the reason costs are soaring.
I hope actions like Mayo Clinic’s in Glendale AZ will force REAL reform…Glendale is a NW suburb of Phoenix and Sun City, the HUGE retirement community is West of Glendale. So I think Mayo’s location for their pilot trial of cutting Medicare patients may be a good test…one of a vocal voting block.
Something has to give…I have/am costing the taxpayers a great deal over my lifetime with numerous expensive procedures and two life threatening diseases, MS and treatable but not curable lymphoma. I appreciate my care, Thank You All! And I know that with the present and soon-to-be (I hope not the ones in Conference now) changes, you cannot continue to pay for me any more than I can myself!! I just finished 5 “bags” of chemo…a year and a half ago they were $14,000+ each, haven’t seen the bill yet for these. Something has to give…and again, Thank You.
Very good points about the “free market capitalism” (irony quotes) of Medicare, Sarah. And good points about patients being forbidden by law to make up the difference in costs to the physician/medical practice, Katherine. (Or for us to cut the indigent a break, Sarah, though there are some quasi-clever ways of working around that – but they at least theoretically can get one into legal trouble with the Medicare administration.)
Many of my Medicare patients probably have higher annual retirement incomes than my working income, judging by their lifestyles. Not that I begrudge them that for a moment – they worked quite hard for it. And almost to a person they would be willing to pay for any difference between the reimbursement and the costs to me and our practice.
Means testing for Medicare and for Social Security have always seemed good ideas to me (yes, to which I myself am willing to be subjected in the fullness of time), but that’s opening up entirely another can of worms.
You’re welcome, LoieMom. And yes, hopefully REAL reform will happen at some point.
People who need financial help with their reasonable medical care should receive public assistance. But the government can’t continue to do that on the cheap, effectively penalizing physicians, medical practices, and hospitals. Over time, there will simply be fewer and fewer medical practitioners, and that in the face of an aging population.
Means-testing is surely going to have to come, Dr. Granger. At this point, there is no other insurance market for the 65+ crowd, so for Medicare it would have to be a case of charging higher premiums for those able to pay. My husband and I have saved on the theory that the government will end up denying us Social Security payments. Both programs have been designed as one-size-fits-all entitlements.
As an aside, my current internist’s office says it does not accept Medicare assignment. Does that mean that they will require me to file my own claims? Sounds reasonable to me, as I said above, and if you were paid immediately the Medicare rate for your services instead of waiting months and spending your time and staff time filing paperwork, it might make things better for you.
My husband is on Medicare now …. I go on in 3 years. Advantage plans have made medicare work for us. You must have a supplement of some sort if you are not wealthy. Who knows what supplements will cost with these changes. I don’t understand why AARP has been so supportive of the changes.
julia, Medicare Advantage plans will be eliminated if the “reform” passes Congress. AARP is supportive because it makes lots of money on the Medicare+ supplemental insurance market. With Advantage gone, those people will once again be buying insurance through them, they hope. Personally I intend to look at supplemental insurance from someone other than AARP.
As the only geritrician in a fifty mile radius, three years ago I stoped taking new Medicare patients except those entering a Nursing Home–another story. Ten years ago I had to close my state of the art lab and x-ray because Medicare reimbursment was about $2000/month below my costs. What! a geritrician without lab and x-ray? Well now they all go out to the hospital and wait and then return to my office next week to get the results, which they use to get before they left the office. My wife and I are on Medicare. It just took us over three months to get her scheduled for a fairly small surgery. MY dermatologist makes us both pay–she does not except Medicare and none of the othe dermatologist do either. I don’t ever want not to be a physician. I would like to practice till they take the keys away from me. But I just dropped my geriatric board certification after 30 years like fifty percent of the other geritricians do. Medicare is socialized medicine, not free market, and socialism never works. This year I will have to make some dicisions and alterations to keep my practice open. I could retire because of some very fortunate real estate purchases not even planned by me, but I can’t continue on what I make as a physician. I would have more in retirement. I really have enjoyed the practice and honor of medicine in my life time, but “the thrill is gone.” I have had high ups in government tell me they think all this can be tended to by nurses, pharmacist, and three month trained “Medical Technicians.” Primary care and geriatrics aren’t really needed. Maybe so. We will see. I’m glad my son is a physician and maybe be able to take care of us in our old age.
For all the problems with Medicare, and even given its financial problems today, the program has been a success for the US. In 1960 45% of US citizens over the age of 65 had no insurance. If you were to break that down by urban vrs. rural you would find that close to 85% of seniors living in rural states were uninsured. Today Medicare covers almost all persons over the age of 65 and 60% of all cancer patients in the US. If you were a farmer in say rural South Carolina and contracted cancer in 1960; your options would have been to go to your county hospital where they would have administered morphine for the pain.
I would point out that the life expectancy of Americans has increased dramatically since Medicare became available. I would also point out that the inflation adjusted income of the average physicians is significantly higher today than it was in 1964, and that while the inflation adjusted income of primary care physicians (not specialists) has gone down over last few years, if you go all the way back to 1963 physicians have fared far better than the average American in increased income. The average primary care physician today makes $135,000 per year. While that may not seem like a lot to some, that places the average primary care physician in the top 10% of American earners, and making them by a significant margin the highest paid of all professions. see http://www.careerinfonet.org/oview5.asp?level=overall&id=1&nodeid=7
Further, while I lament Country Docs decision to stop specializing in geriatric care, I am pretty certain that absent Medicare there would be no geriatric care specialists, at all.
Finally, you do not have to hate capitalism to accept the fact it cannot solve all problems. I certainly benefit from capitalism. The fact that pure capitalism did not provide health care coverage for senior citizens and the disabled before Medicare, is significant evidence it would not do so if Medicare ceased to exist. Could Medicare be better? yes. Would we be better without Medicare, I see no evidence of that.
Todd Granger,
You are already “means tested” for Social Security by the IRS. The amount you contribute to Social Security is in included in your income subject to income tax, so you have already paid taxes on it when you earned the money you contribute to Social Security. Now, when you retire, if you are fortunate enough to have lived a frugal life and saved and invested an amount that provides your with a comfortable income, you will be taxed on the Social Security benefits again when they are paid to you. I believe the current tax cuts in at $34,000 of adjusted gross income for individuals and $44,000 for married filing jointly, and makes 85% of your Social Security benefits taxable as ordinary income. So you see, you are being double taxed on money you paid into Social Security. Isn’t government’s ability to repeatedly squeeze money out of the same dollar earned by a hardworking taxpayer fun?! 🙂