America is well served by Mayo Clinic's thoughtful health-reform critique

This commentary originally appeared on on August 5, 2009. Permission to reprint in whole or in part is hereby granted. 

In recent weeks the American Medical Association (AMA) stepped out and enthusiastically endorsed the health-reform bill proposed by House Democrats. This sparked a nationwide flurry of criticism from health-care providers, who made it known that the AMA does not speak for them and that the bills in Congress fall far short of solving America’s health care issues.  

Of these provider voices, the Mayo Clinic’s may be the most influential. President Barack Obama regularly cites Mayo as a model for reform. Consequently, its criticism of congressional reforms is tough to ignore.

A reporter picked up on this fact in President Obama’s most recent prime-time news conference.  To a question citing Mayo’s criticism of the House proposal, the president responded:

I think it’s important to note that the Mayo Clinic was initially critical and concerned about whether there were enough changes in the delivery system and cost-saving measures in the original House bill. After they found out that we had put forward very specific mechanisms for this [Independent Medicare Advisory Council (IMAC)] idea, this idea of experts getting the politics out of health care and making decisions based on the best evidence out there, they wrote in their blog the very next day that we actually think this would make a difference.

A misleading implication

The implication in this statement — that Mayo supports the president’s reform after being “initially critical” — is entirely misleading. True, Mayo “sees potential” in the IMAC idea. However, this is merely support for one idea, not for the administration’s whole reform effort, which still misfires on a number of fronts identified by Mayo — most notably, the public-plan option. 

A review of the Mayo Clinic Health Policy Center’s recommendations suggests that administration officials should brace for more criticism if they persist on their current path. The fact is, Democratic proposals largely fail to advance the four cornerstone principles that underlie Mayo’s recommendations. 

According to Mayo’s four principles, health reform should create value, coordinate care, reform the payment system and provide insurance for all.  The first three focus on value — the need to measure value properly and the need for a payment system that rewards providers that deliver high-value care. Unfortunately, as the Mayo blog laments, the Democratic congressional proposals actually undermine these principles. 

The administration’s IMAC proposal does represent a step toward addressing these value questions in Medicare. However, it’s a small step and certainly not the game changer that President Obama implied. According to the Congressional Budget Office, there is a “high probability” (PDF) that no savings will materialize from IMAC. In addition, Mayo already complained that the timeline for implementation is too long. And the day after blogging about IMAC’s potential, Mayo officials sent a letter (PDF) to Congress, entitled “Getting Reform Right,” expressing much stronger support for a separate Medicare payment reform bill sponsored by Sen. Amy Klobuchar, D-Minn.
Different routes to universal coverage

On top of diverging over value-based payment reform, Democratic proposals and the Mayo recommendations take radically different routes toward universal coverage — Mayo’s fourth principle.  Here, Mayo officials are concerned not just that people get covered. They’re concerned about how people get covered. Coverage, according to Mayo, should be mandated, guaranteed, portable, affordable, competitive and individually owned.  

Among other things, this means reforming the tax code so that it’s no longer biased against individual-owned insurance. Denis Cortese, the president and CEO of the Mayo Clinic, recently emphasized the importance of tax code reform in an interview with Charlie Rose: 

Some equalization of that tax deductibility for purchasing of health insurance — either get rid of it or extend it for both or cap it, but do something about that — I think that is a fundamental important step that has to be made.

Democratic proposals all fail to include this “fundamental” step. These proposals follow some of Mayo’s coverage recommendations related to guaranteed issue, individual mandates and sliding-scale subsidies. Yet they fail to increase portability, spur competition, promote individual ownership, and, as just noted, equalize the tax treatment of purchasing health insurance. Instead, Democratic proposals promote the status quo employer-owned insurance model through an employer mandate and extend coverage primarily by broadening access to government health plans.

Considering the administration’s mild effort to reward providers for value and the absence of tax code reform, Democrats will need to chart a new course if they expect to garner support from the Mayo Clinic and likeminded providers. 

Not opposed to reform efforts

As the Rochester Post-Bulletin — Mayo’s hometown newspaper — reports, Mayo is not against the administration’s reform efforts. Mayo certainly agrees our system needs reform and would like to work with the administration toward that end. Their initial criticism can be viewed as the first step in that effort and it has clearly moved the administration, albeit slightly, in the right direction.  

In contrast to the AMA’s blithe support for reform for reform’s sake, America is well served by the Mayo Clinic’s more thoughtful, cautious and ongoing critique.