Mayo Signs Deal with Shriners, Consolidates Two Hospitals

John Commins, for HealthLeaders Media , April 1, 2013

Healthcare economist Adam Powell says he believes the two initiatives are being driven by "somewhat different motives."

"The Shriners initiative is about increasing revenue, while the hospital integration is about reducing variability in quality measures," says Powell, president of Payer + Provider Syndicate, a Boston-based consulting firm.

"The participation of Shriners in the Mayo Clinic Care Network is beneficial for Mayo, in that it provides an additional customer for the eConsults and AskMayoExpert services. This move would have been advantageous for Mayo under any circumstances, but has likely been facilitated by recent technological advances and greater acceptance of telemedicine. The general trend towards greater use of evidence-based medicine has likely also motivated Shriners to adopt the AskMayoExpert service."

"The integration of Saint Marys and Methodist Hospitals within the Mayo system represents an effort to reduce costs and red tape, in light of growing hospital regulation and reporting requirements," Powell says. "By combining quality data from two hospitals, Mayo will have data representing a larger population, and as a result will have less random variation in outcomes. Given that value-based contracts are tied to quality outcomes, it is vital for Mayo to do everything that it can to reduce random variation. As hospital systems transition towards value-based payment, we may see more efforts to stabilize metrics."

John Commins is a senior editor with HealthLeaders Media.

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