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Mayo Clinic CEO walks back comments on prioritizing privately insured patients

March 20, 2017

Facing a possible civil rights investigation, Mayo Clinic’s chief executive is backpedaling from statements he made to employees about prioritizing the care of privately insured patients over those on Medicare and Medicaid.

Dr. John Noseworthy issued a press release late Friday saying that he regrets that the wording he used caused confusion about the hospital’s commitment to serving patients with government insurance. He sought to correct the record after Minnesota regulators said they are looking into potential legal violations based on his comments.

In his statement, Noseworthy said: “Patient medical need will always be the primary factor in determining and setting an appointment. In an internal discussion I used the word ‘prioritized’ and I regret this has caused concerns that Mayo Clinic will not serve patients with government insurance. Nothing could be further from the truth. In fact, about half of the total services we provide are for patients who have government insurance, and we’re committed to serving those patients.”

The controversy arose out of a speech to Mayo Clinic employees late last year in which Noseworthy said the hospital would prioritize privately insured patients in circumstances when they are seeking care for a similar condition to those with government insurances. He said the policy would only affect a small number of patients and it would not not apply to emergency care.

“We’re asking … if the patient has commercial insurance, or [if] 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,” Noseworthy said at the time. Mayo Clinic made $475 million in profit in 2016, down from $612 million three years prior.

His bold pronouncement, reported this week by the Minneapolis Star Tribune, reflects the growing unease among hospital executives who are watching profits shrink due to steady increases in the number of government-insured patients. Medicaid, whose enrollment has increased dramatically under the Affordable Care Act, traditionally pays hospitals significantly less than commercial insurers.

While Noseworthy walked back his prior comments, it is common for hospitals to shift operations to treat patients with insurance that pays them more money. He said it is important to talk about such matters openly in light of the financial pressures facing hospitals. “Changing demographics, aging of Americans and budgetary pressures at state and federal government pose challenges to the fiscal sustainability in healthcare today,” he said in his statement Friday. “While these discussions are uncomfortable, they are critical for us to be able to meet the needs of all of our patients.”

Noseworthy’s candor caught the attention of Minnesota Department of Human Services Commissioner Emily Piper. She said she was surprised and concerned by the comments, and has questions about what they really mean and how Noseworthy’s directive would be carried out. The Associated Press reported that Piper’s department is looking into whether there are possible violations of civil and human rights laws.

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