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October 21, 2015

CEO: Why Mayo Clinic doesn't want to acquire hospitals

Daily Briefing

John Noseworthy, the president and CEO of Mayo Clinic, tells U.S. News & World Report that increasing hospital consolidation might not be good for care—and argues that the clinic's patient-centered approach is a better way to compete.

According to a recent JAMA study, there were more hospital mergers in 2014 than any other year since 2000. Many health systems view size as a way to gain more leverage with payers, provide more coordinated care, and compete in a changing health care market.

But Noseworthy says the focus on increasing "purchasing power on the back end," can crowd out more patient-centered strategies. "We decided not to go with consolidation—to get bigger by owning more hospitals, so we can drive out costs and win," Noseworthy explains.

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Instead, the clinic has focused on a "front-line approach" that saves money through improved patient care. Other providers can access the clinic's expertise through its Mayo Clinic Care Network, which currently provides 35 independent hospitals access to best-practices, Mayo Clinic experts, and—if needed—fast-track referrals to clinic-owned hospitals.

The Mayo model

Noseworthy says the clinic's approach was partly driven by necessity. Its team-based, patient-centered model is difficult to scale. To fulfill the clinic's "humanitarian mission" of sharing its knowledge with others, it decided to digitize its expertise.

"We put those care models into a sharable data system, called 'Ask Mayo Expert,' which can be accessed as a subscriber to members of the care network," Noseworthy explains. For instance, the system can surface Mayo best practices for special situations—like when multiple specialists have to coordinate care on a patient with a specific condition.

From there, users of the system can get progressively more help from the clinic, beginning with reaching out directly to Mayo Clinic experts who helped formulate the best practices. If needed, patients with complex needs can be referred directly to a clinic facility.

 "That has enabled us to keep 80% of the patients in [their local hospital]," Noseworthy says.


Noseworthy argues it is a model that works for patients, but worries other trends in the health care industry—like narrow provider networks—could make it more difficult to implement. He says Mayo Clinic's job is to explain how it—and other centers of excellence—fit into the broader value-based care landscape.

"One of [the clinic's] strategies is to show that, although we may not be in other people's networks, we can actually save them money because we see this stuff all the time and do [treat patients] safely and efficiently" (Sternberg, U.S. News & World Report, 10/14).

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