John S. Wolfe

Dr. Denis Cortese, former president and CEO of the Mayo Clinic, explained the challenges facing the healthcare industry in a Jan. 19 talk to the Economics Club of Phoenix.

Speaking a week after the Massachusetts special election of Scott Brown to the Senate — and presumably the end of the ObamaCare proposal in Congress — Dr. Cortese said a new approach with an emphasis on information-sharing and identifying waste needs to be used.

In his assessment, healthcare can be divided into three areas: knowledge and research (the study of care and cures); care delivery (oriented around the patient); and the payer domain (insurance). He said there’s a fourth dimension — legal — but he wouldn’t delve into that now.

In the care delivery segment, one problem is that it is too difficult for information about a patient to be shared by various care-givers, resulting in a lot of duplication and loss of time. He said more attention needs to be shown to the science of delivery, with integrated care and added value the objective.

As for paying, the system has to pay for value. Right now Hawaii is the most effective at delivering Medicare at $6,000 per patient per year. Florida is the worst, at $16,000 per patient per year. When Congress cuts Medicare compensation to hospitals by 21%, the best deliverers suffer a greater hit.

Rather a government-operated system, Dr. Cortese believes a program guaranteeing insurance for all should be modeled on the federal employee healthcare setup, which gives federal workers a choice of multiple plans.