Health care reform

[Star Tribune, January 29, 2010] If a final health bill passes—and that's a big if—it's likely to include a payment formula that would reward efficient, high-quality providers. Leading a coalition of hospitals from the Midwest and Pacific Northwest, Mayo Clinic proposed a radical new payment formula, called a "value index.'' Instead of paying the same amount every time a hospital or physician does a procedure—which encourages more procedures—Medicare should pay for value. "Value'' would combine patient outcomes, safety, service and total costs over time.

By this measure, health systems in Minnesota would do well. "It's absolutely the right thing to do," said Ken Paulus, chief executive of Allina Hospitals and Clinics. Looking at price per procedure, Mayo is expensive compared to local competitors. For example, a colonoscopy costs $1,177 at Mayo and $570 at Allina, according to Minnesota HealthScores, a website that shows what private health plans pay.