Stanley Feld M.D., FACP, MACE Menu


Mayo Clinic Rejects Accountable Care Organization(ACO) Provisions


Stanley Feld M.D.,FACP,MACE


The sooner President Obama’s Healthcare Reform Act (Obamacare) is repealed the faster we will be able to get on with healthcare reform that will work for all stakeholders. President Obama was figured that 30 existing and successful integrated medical care organizations would be in the first group of clinics to join and be included in his Accountable Care Organization (ACO) system of care.

ACOs are a critical part of Obamacare’s goal to provide affordable, universal and quality healthcare. ACOs are really HMO’s on steroids. ACOs are supposed to be better versions of HMO’s.  The public and physicians despised HMO’s because of its control over patient choice and access to care.  President Obama thinks Medicare will save over $500 billion dollars a year with ACOs.  Unfortunately for President Obama, neither the CBO nor the Medicare actuaries believe it.

So far at least 4 of President Obama’s premier integrated healthcare organizations have withdrawn from applying for ACO status. The stage 2 ACO regulations produced by CMS and CMS’s chief Dr. Don Berwick make clear President Obama’s intentions to control medical care and shift the risk of care to hospital systems and physicians.

Each organization has withdrawn with a slightly different excuse. It looks are if no one is going to show up at President Obama’s party.  

 “The Mayo Clinic says it will not be part of a critical piece of national health care reform under the government's proposed rules.”

 The Mayo Clinic announced that the proposed regulations “conflict with the way it runs its Medicare operations.” Mayo treats about 400,000 Medicare patients a year. The bottom line is that Mayo figured out that they would assume too much risk, lose too much money and relinquish too much control over its processes to the federal government.

Dr. Douglas Wood, Mayo's chairman of health care policy and research said Mayo "is not going to participate in a Medicare accountable care organization under the circumstances proposed."

Mayo Clinic’s public reasons as expressed by Dr. Wood are;


  1. Mayo does not want to significantly change what it believes is an efficient, patient-friendly program. President Obama has used Mayo’s program as an model.
  2. The gap between Mayo's way of staying accountable and the government's regulations may prove too wide to bridge.

3. Mayo objects to the government's demand that patients be included on oversight boards to judge performance. Mayo doesn't do that now and is not eager to change. Dr. Wood said, "You don't have to have a [patient] on the board to make [treatment] patient-centered,"

4. The Mayo Clinic’s lawyers decided that the antitrust rules that are part of the ACO proposal would be violated. Mayo already provides most of the health care in most of Minnesota's rural counties. Dr. Wood believes it could not operate ACOs in those areas without violating the proposed regulations.

5. The Mayo Clinic objects to the way the government plans to measure effectiveness and quality of medical care. The effectiveness measures proposed by the government include such things as 30-day mortality statistics and the number of diabetes treatments.

The Mayo Clinic believes that the way CMS proposes to measure quality will be ineffective. They will only waste money without improving outcomes.

"They don't get you close to measuring health," Wood maintained. "The simplest measure for consumers is: How effectively did the organization keep me functioning?

    6. Mayo Clinic also objects to the CMS’ way of assigning patients to ACOs.

Mayo is confident in its current approach to accountable care. It has asked CMS "to take an entirely different approach to implementation of ACOs in the country." Mayo wants the government to contract directly with groups that are already providing accountable care programs.

"We're not looking to intentionally give [health care reform] a black eye," Wood said. "We're working to implement accountable care."

President Obama’s healthcare team has stated that they are not going to be influenced by Mayo’s practical demands. They will decide on the correct course based on their theoretical ideology. 

Elliott Fisher, director of population health and policy at Dartmouth Institute in New Hampshire as spokesman for the administration said,

"Every affected stakeholder said it's not good enough yet," Fisher said. "This is how the process is supposed to work."

Dr. Fisher is statement is meaningless and non-committal.  

 Michael E. Chernew, PhD is a Professor of Health Care Policy in the Department of Health Care Policy at Harvard Medical School. He is a disciple of Dr. Donald Berwick and a member of the Medicare Payment Advisory Commission (MedPAC), which is an independent agency established to advise the U.S. Congress on issues affecting the Medicare program. He is also a member of the Institute of Medicine’s Committee on Determination of Essential Health Benefits.

 He said in response to Mayo’s announcement, "I don't think the success or failure hinges on one participant."

Mayo’s Clinic decision was the correct one. CMS wants to control every aspect of medical practice. It wants to shift the risk of care to the providers and control the criteria to judge providers. It is a no win situation for providers. “Cooperative” providers are finally starting to understand the trap President Obama has set.

The best way to win a war is not to show up.






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