Oct. 07--Mayo Clinic said it is joining the medical network of UnitedHealthcare, making it cheaper for 20 million of the insurers' commercial members around the country to seek care there.
This is the first national contract Mayo has signed and is part of a move by Mayo to shed its aura of exclusivity in an era when affordability trumps. UnitedHealth members will now pay in-network prices if they go to Mayo, which can offer significant savings over out-of-network prices.
"This national agreement with UnitedHealthcare will allow even more people to experience Mayo Clinic," said Dr. John Noseworthy, Mayo's chief executive.
The contract starts Nov. 1 and covers all Mayo's group practices and hospitals in Rochester, Jacksonville, Fla. and Scottsdale, Ariz.
Mayo had smaller, specialized contracts with UnitedHealth in the past. Since 2004, it's been part of UnitedHealth's transplant network.
Mayo also has contracts with other national insurers, but those agreements only cover people in some regions of the country.
Price vs. value
The Mayo-UnitedHealth deal is all the more significant since Mayo has a reputation for being more expensive per procedure while UnitedHealth has a reputation for driving a hard bargain with providers.
Mayo officials said they persuaded the insurer that care at an integrated, coordinated center costs less over time because it eliminates unnecessary services.
"It's not about price, it's about value -- all the right care and only the right care," said Bob Chase, Mayo's chair of contracting and payer relations.
UnitedHealthcare is the commercial arm of Minnetonka-based UnitedHealth Group. Other top-rated medical centers in its network include Johns Hopkins Hospital in Baltimore, Cleveland Clinic, UCLA Medical Center and Stanford Hospitals and Clinics.
The promise of more commercial business is attractive to Mayo because it loses millions each year on Medicare patients. Medicare patients make up more than half of patients at its Arizona and Florida branches.
After barely breaking even in 2008, Mayo reported an operating margin of 4.4 percent last year, when total revenue was $7.6 billion.
Mayo treated 528,000 patients last year. Currently, 20 to 30 percent of patients travel more than 500 miles for Mayo treatment.
Chen May Yee --612-673-7434
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