The Free Press, Mankato, MN

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November 10, 2007

Hospital competition could be healthy

The Mankato Clinic’s bombshell announcement it plans to build a competing hospital is spawning a vehement debate over competition, cost savings and quality.

It pits two titans of health care — ISJ Mayo Health, which operates the existing hospital, and the Mankato Clinic, one of the largest physician-owned practices in Minnesota.

A physician group proposing to build a full-service hospital is a first in the state. New hospitals, when they have been built, are either community owned or built by large medical groups, or smaller specialty hospitals built by physician groups.

Bryan Nermoe, chief executive officer of Mankato Clinic, said there is mounting evidence from studies across the country that competition not only drives down costs but increases quality of care. Those reports come from the federal government, major universities and others.

“In the 1980s, competition wasn’t necessarily helpful in the marketplace, but now it is leading to significantly lower costs and high quality,” Nermoe said.

Dr. Greg Kutcher, president and CEO of ISJ, said any argument that a second hospital in this market would reduce costs “is patently false.”

University of Minnesota researcher John Nyman said he thinks studies show competition often lowers health-care costs, but much of the data is based on competing specialty hospitals — which cater to specific practices such as cardiac care — not full service hospitals.

Former U.S. Sen. David Durenberger, chairman of the National Institute of Health Policy at the University of St. Thomas, said both sides will be able to point to numerous studies supporting their viewpoint.

But he doubts a second hospital would lead to substantial savings.

“I don’t think there is any data showing that competition in medicine on this level works. When I talk to people in communities with two hospitals they always say it would be more efficient to do it at one.”

Still, Durenberger said no one should assume Mankato is getting the best value with the existing hospital. And he thinks the proposal is a perfect chance for people paying the bills to look at what they’re getting for their money.

“It’s a good opportunity for a community, as reflected in its leadership — employers, public officials, The Free Press, everyone who is paying the bills — to step back and say what is the value we’re receiving from Mayo and what’s the value we’re receiving from Mankato Clinic and what does a new hospital do for us.



For the complete story and much more including more back and forth from the clinic officials and Mayo, get The Free Press e-edition by clicking here or buy a print edition at various local retailers.

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