http://www.startribune.com/stories/462/4976286.html


Mayo Clinic is seeking patients
David Phelps, Star Tribune
September 12, 2004 MAYO0912



The Mayo Clinic's new Gonda Building in downtown Rochester has a curving glass facade, a lobby worthy of a five-star hotel and floors of ultra-high-tech medical equipment.

What the clinic wants now is more patients.

After several tough years caused by fallout from the 9/11 terrorist attacks, the Mayo Clinic is seeing a recovery in the number of patients coming through its doors. But a combination of new facilities and technological advances -- planned years ago and now coming online -- as well as competition from Twin Cities hospitals means that the clinic now has more capacity in some areas than it can fill.

And so the Rochester institution recently found itself in an unusual position: angling for business.

The clinic ran advertisements in the Star Tribune for its heart surgery center this summer for the first time, with the tagline "no referral required." It revamped its popular checkup program for corporate executives, cutting the time it takes to provide a thorough checkup from two days to less than a day and a half. And perhaps most radically, the clinic last year began sending cardiologists one week a month to the United Arab Emirates, the first time Mayo physicians have traveled outside the country to treat patients.

The fact that Mayo is running ads "tells me they're looking for new patients and a broader market," said Jean Abraham, who studies health economics and hospital competition at the Carlson School of Management at the University of Minnesota. "It also suggests that post-9/11, the international patients have not been there for them."

Mayo executives say they are keenly aware that they need to scramble to keep their world-class go-to status.

"We feel competition regionally, nationally and internationally," said Dr. Hugh Smith, chairman of the board of governors for the Rochester campus of the clinic. "We're in the cornfields of Minnesota. Why should people fly over other cities and medical centers to come here?"

Profitable travelers

They have done so, of course, because of Mayo's reputation. Although out-of-staters and international clients account for less than 40 percent of visits, they contribute almost 50 percent of the clinic's revenue. Patients who travel the longest distance are usually the ones who have the most significant problems and who need hospitalization.

The number of these patients dropped after 9/11, the ensuing war in Iraq, the SARS outbreak and a code orange U.S. security alert that reduced air travel. Middle Eastern patients have continued to stay away but have been replaced by growing numbers of Canadian patients and those from other countries.

Overall, the combined number of patients at Mayo's Rochester campus and its two smaller ones in Jacksonville, Fla., and Scottsdale, Ariz., fell from 508,946 in 2000 to 503,682 in 2001 and 501,019 in 2002, before climbing again to 511,000 in 2003.

In Rochester, pent-up local demand made up for the decline in national and international patients after 9/11, and the number of patients actually rose slightly in those years, from 311,377 in 2000 to 319,687 in 2003.

"We still have people wanting to come here," said Mayo spokesman Lee Aase. "We're adding staff, maybe at a slower rate, but we're trying to add in places so we have a balanced practice."

The clinic had operating income of $132 million last year, double the $61.3 million of 2002. In 2001, operating income totaled $53.2 million, up from an anemic $16 million in 2000. Mayo's 2000 income would have been higher if its return on investments hadn't been lower than expected.

Mayo executives say they are making a solid rebound from the post-9/11 decline in business.

"We're having a strong year," said Rochester clinic administrator Jeff Korsmo about 2004, though he acknowledges that Mayo still hasn't recovered from the down years. How it does in "the rest of the decade is key to putting us in a position for the demographic changes" of an aging population.

Founded in the late 1800s by brothers Will and Charlie Mayo, the clinic was a pioneer in group practice and evolved into a world leader in many areas of medicine. Today it's consistently near the top of the annual rankings of U.S. hospitals by U.S. News and World Report magazine. It was No. 2 this year, behind Johns Hopkins in Baltimore.

With its own research arm and a medical school, Mayo is partnering with the University of Minnesota to conduct genomics research and with IBM for a genetic-matching effort involving an IBM supercomputer. Its consumer Web site is the gold standard for laypeople looking for medical information, and its publishing arm has books in circulation worldwide.

Streamlining works

Part of the reason Mayo has excess capacity today stems from its own success in recent years of streamlining its processes.

This summer the clinic went to a paperless records system with computerized patient files. Next year it will go filmless, with electronic images and X-rays. Instead of waiting hours for patient records and test results to be physically brought to them, doctors can call them up with a few key strokes on a computer. That's expected to free more than 100 employees to do other jobs at the clinic.

"Mayo is in the forefront of using technology in the delivery of health care," said Abraham of the Carlson School. "They are very responsive to adapting to change."

These improvements are embodied in the $170 million Gonda Building. Opened in October 2001, it was designed as a model of efficiency, with the idea that many procedures such as eye surgery could be done on an outpatient basis, sending patients back to their hotel by the afternoon. The clinic occupies 10 of the 20 floors in the building, which was built with space for future expansion.

While Mayo still gets more patients than it can handle in certain specialties such as neurology and dermatology, it does have capacity in other areas such as cardiology.

To get more patients in the door, the clinic has sped up its popular executive checkup program by interviewing the patient in advance and prescheduling tests and consultations. Five years ago, about 2,000 corporate executives came to Rochester for a comprehensive physical exam that lasts up to two days and costs $2,500 to $3,000. Last year the checkup program saw 4,000 top corporate officers, one-quarter of whom were women.

"We try to get them in and out as quickly as possible," said Dr. Don Hensrud, who runs the program. It makes business sense as well as medical sense."

Mayo also is venturing further afield, albeit tentatively. The clinic has done consulting work with hospitals in Jordan and Saudi Arabia in a variety of specialties, including cardiac services. It recently signed a telemedicine agreement with a third hospital in the United Arab Emirates, under which Mayo doctors in Rochester read the CAT scans and electrocardiograms of Arab patients and offer remote diagnoses.

The clinic also is working with developing countries to help them establish infrastructure for medical care. Hospitals in Mexico, for example, send lab tests to Mayo for analysis.

Doctors on the go

Last year Mayo heart specialists began flying to the huge new Dubai Healthcare City in the United Arab Emirates to provide services one week a month, the first time Mayo has sent physicians abroad. A couple of hundred patients have gone through the fledgling program, which Smith cautiously calls "a pilot that may grow."

Closer to home, Mayo is facing growing competition in its own back yard. A look at the health care landscape in Minneapolis and St. ****, just 80 miles to the north of Rochester, shows what awaits.

Fairview Southdale Hospital in Edina opened the $39 million Minnesota Heart and Vascular Center in 2001. Park Nicollet Clinic's $52 million Heart and Vascular Center in St. Louis Park is scheduled to open in August 2005. And Abbott Northwestern Hospital's $110 million heart care center in Minneapolis is set to open in the spring of 2005.

All of which could explain Mayo's recent advertising campaign, which touted its heart surgery center. The one-third-page color ads ran through the summer in the Star Tribune and the Midwest edition of U.S. News and World Report.

They featured people who had been treated for heart ailments at the clinic. "Mayo is just 90 minutes south of the Twin Cities," the ad reminded readers. "If you have a heart condition or want an evaluation, we're here for you."

Mayo is "getting a ton of competition," said Jim Bendt, president of the ******* deGrood Bendt marketing and advertising agency. "Heart centers are where hospitals are seeing the most growth because of the aging baby boomer. Now with all those resources closer to home, it's putting pressure on Mayo."

The clinic is having "the same situation everyone else in health care has," said Carol Greenland, vice president of marketing for Park Nicollet Health Services. "They're looking for patients in this radius."

Mayo executives say the ad campaign was an experiment to test its effectiveness, not a cry for patients. Despite the initiatives to reach out to patients, Mayo executives say word of mouth remains the best advertising tool.

"Our best form of marketing is a completely satisfied patient," said Smith.

David Phelps is at dphelps@startribune.com.

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