Mayo Clinic CEO: Here’s Why We’ve Been The Leading Brand In Medicine For 100 Years

Mayo Clinic CEO: Here’s Why We’ve Been The Leading Brand In Medicine For 100 Years

Max Nisen | Feb. 23, 2013, 10:53 AM | 1,478 | 

For more than 100 years, the Mayo Clinic’s built an enviable reputation and medical practice. People all over the world regard it as one of the best places to treat any illness, and it has routinely come in at the top of hospital rankings.

We’ve already written about the Clinic’s plan to spread that knowledge worldwide, but we also spoke to CEO Dr. John Noseworthy about how the clinic built its reputation, attracts the world’s best doctors, and manages to stay at the top.

Our conversation has been edited for length and clarity:

What’s it like leading such a large and well-known institution in the aftermath of the Affordable Care Act? 

It’s a great privilege to work at the Mayo Clinic, and obviously to be the physician leader of this fine institution is a great privilege. Yes, the law is going to change how we work, but we’ve been at this for 148 years. For well over 100 years everything we do every day is continually retooling how we work to provide safer care, better care, and more efficient care for our patients.The Affordable Care Act and everything else that’s happening in the industry is putting a sharper pencil on that, but to be candid, we’re not really reacting to the law. We’ve been on this journey for a long time to drive out waste, use technology, use our staff to provide better care.

This is just another step in our history. We’re the first and largest physician-led group practice of medicine supported by research and education, and we’ve been a model for a lot of other groups, some of whom you’ve covered. We’ve been at this for a long time.

Why has Mayo been so successful? 

I think it all comes down to our core value, which is that the needs of the patient come first. I know that might sound kind of trite in today’s world, but our staff is extraordinarily committed. If you spend a day here, and you grab anybody at the Mayo Clinic and ask them what’s the purpose of your work, they would say “to meet the needs of our patients.”

I’ve been working here 22 years and I’ve never had a physician say they’re too busy to help me with a patient, day or night. That’s probably why Mayo has been the leading brand in medicine for the last 100 years.

What do you guys do to build that brand? 

Sometimes we have to make decisions that don’t make a lot of sense from a business standpoint, but they’re the right thing for the patient. I mean, we don’t want to make stupid decisions that will get us in financial trouble, but whenever anything comes up, there is a singular focus on that.

In my role, what I hear every day from patients and family members is that the minute they step onto a Mayo campus, whether it’s in Rochester, Minnesota; Scottsdale, Arizona; Florida; or in our large integrated health system, they immediately sense that there’s something different. They feel it right form the first person they speak with and it’s the physicians, it’s the science, it’s the engineers and technologists. It’s that patient focus and a relentless focus on quality. This goes all the way from the heart surgeons down to the cleaning staff.

How do you get research to the point where it helps patients?

We have a very strong research effort — we invest 600 million a year in our research, half of that is Mayo dollars [and] a third of it comes from the National Institutes of Health. Our research is very integrated. You’ve probably seen our logo; it has three shields that intersect. Those represent practice, education, and research. For research, we do the full spectrum of discovery research, translational research, then clinical outcomes research, but what we say is that our discovery research is about creating hope and solutions for patients, a reason to come to Mayo Clinic for diagnosis or new treatment.

Our basic science and physician researchers are completely integrated into the Clinic and they work very closely with the physicians to understand the key questions that are out there, so that their work has real meaning. When I said we sort of have a three-legged stool about how we approach the future, one is driving quality, the second is improving the speed with which research gets right into the patient’s room, we call that “knowledge to delivery.” The third part of that stool is creating a workforce that will help us do that.

How do you create that workforce?

We have five schools in our education system, so we train an awful lot of folks from technologists all the way up through heart and brain surgeons, but we recruit heavily from the outside as well. Whenever we post a nursing position, we usually have over 20 applicants for that single position because people want to work at the Mayo Clinic. You have to assume, well you don’t assume it you check it, but first of all is the person qualified to work at Mayo clinic?

If [physicians] come from outside and we don’t know them, they basically come for a 2- to 3-day visit where we watch them practice and teach as well as talk about their science to see if they’re a good fit for us. Competence and passion and compassion are all necessary, but there has to be a fit.

We’re not looking for individuals, we’re looking for people who can be part of and lead teams, because teams and systems of care always beat individuals. When they’re hired, they’re kept on for 3 years before we decide whether they’ll stay as full consultants. It’s a period of testing them, and then staff votes and says whether this person is or is not someone whom we want to keep on. There’s quite a training period. We make a huge effort to articulate our culture, what it means to work at Mayo Clinic. We’re very proud that our staff generally come and work at Mayo for their entire career. Our workforce is very, very stable … our physician workforce … the turnover rate is about 1-2 percent, which is extraordinary in today’s world.

How are you responding to increased cost pressures?

Well as I said, we’ve been doing this forever; we’re good at it, if not perfect. One of our secrets is we’ve had a very strong tradition of engineering at Mayo Clinic. We have 100s of engineers that are integrated in many departments, and their science is efficiency. We’ve had a quality academy now for over 8 years that trains our staff on systems thinking and on driving out waste. We’ve published approximately one scientific or medical research paper a week on outcomes at Mayo Clinic, so well over 350 papers in the last 7 years on the quality initiative, and that’s better outcomes, safer care for patients. Better quality at affordable cost, that’s really value — we call that the value equation.

I know many of your readers probably wouldn’t anticipate this, but over 50 percent of the patients we see at Mayo Clinic are government-paid patients — Medicare largely, but some Medicaid — and because they are obviously older, they have more complex medical problems. Close to 60 percent of the work we do is with patients who are paid for by Medicare. We, like almost everybody else, struggle to pay for that because the government reimbursement doesn’t cover our costs. That said, we don’t turn away Medicare patients, but at some point you do reach a tipping point where you say, well how much further can you go? We’ll have to see how that plays out, but that does drive us to make certain that we’ve created an efficient health care system.

What role does data play at Mayo?

Data is absolutely everything. As you can imagine, physicians want data if they’re going to change how they practice or perform surgery, they’re going to want to know that it’s data-driven. We have quite good data in the medical profession on quality outcomes, but that’s not always what we’re asked to measure.

A lot of it is measuring the process — did you ask this question or do that. But the quality outcomes, readmission rate, infections, falls, retained foreign objects, that sort of thing, that data, everyone is collecting that and using that to drive change. The part of the value equation that’s still in evolution is the cost data. You need to drive costs down, and  value really goes up if you get the same outcomes or better outcomes at lower cost.

Perhaps you saw this announcement in The Wall Street Journal, that the Mayo Clinic announced a research strategic alliance with a subsidiary of United Health Group called Optum to put together a data center on health care outcomes and cost. That’ll be an open innovation center in Cambridge, Massachusetts called Optum Labs, and this is seen as a huge shift in how we believe health care research will go forward.

What it basically is doing is taking the clinical data which the Mayo Clinic has — how did the patient do, what was their diagnosis, what happened over a couple of decades — for about five million lives. We de-identify, we strip the identifiers from those folks of course, then United Health Group, through Optum, has insurance claims data, all the costs that their patients incurred over time over a couple of decades. That database covers 109 million lives; it’s the largest, best database on insurance claims. By linking those two data sets together we — Mayo, Optum and other highly qualified research driven partners from academia, other insurance companies, policymakers, life science companies — are coming together to say let’s really look at outcomes and costs. What outcomes do we want in health care for Americans, and how do we drive the costs down? This is the way of moving forward and we’re very excited about this relationship.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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