Rochester, Minn.-based Mayo Clinic President and CEO John H. Noseworty, MD, and Oakland, Calif.-based Kaiser Permanente Chairman and CEO Bernard J. Tyson recently discussed how their systems help keep health costs down at The Wall Street Journal's CFO Conference.
Mr. Tyson said Kaiser is different than many other health systems today, but it is that difference that helps it keep health costs down. With the exception of Kaiser and a few other select systems, Mr. Tyson said, "The industry is on a fee-for-service basis. It's volume driven." He attributed that to quality being defined in our society over the years "as more is better." However, Kaiser is working at changing that belief. Mr. Tyson said Kaiser has brought outcome based data to the argument to disprove the philosophy that being cost effective means a system is going to skimp on quality.
Dr. Noseworthy discussed how Mayo is helping a specific employer keep its health costs down. He highlighted the agreement Mayo has with Wal-Mart, and the value the health system brings to the retail giant. Mayo has been the exclusive transplant provider for Wal-Mart for 18 years, regardless of where the employees needing the services live. That agreement "makes good sense for Wal-Mart," said Dr. Noseworthy, due to the avoided costs. Wal-Mart sends employees to Mayo for complex care knowing they will get an accurate diagnosis and the right treatment, which will allow them to get back to work sooner, according to Dr. Noseworthy. He said, employers recognize complex care is "very expensive," but they also recognize "it will be a lot less expensive if they do the right thing and do it quickly."
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