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September 18, 2018

Mayo Clinic's latest bet: Teaming up with Medica on new insurance offerings

Daily Briefing

    Mayo Clinic and health insurer Medica, both based in Minnesota, on Thursday announced they will team up to develop insurance policies that will allow patients throughout the country to receive complex care at Mayo Clinic.

    Connecting more patients to Mayo

    Under the new arrangement, Mayo and Medica will network with local health care systems to allow members to seek treatment for rare or complex health problems at Mayo. Members will maintain in-network access to local providers.

    Medica will administer the health plans and facilitate customer service and engagement for the products. Medica CEO John Naylor said, "We will go to basically new markets, and we will work with local delivery systems and bring a solution to that market." He added, "Members in that market would be able to access Mayo for serious and complex care."

    Mayo is not an equity holder in Medica's collaborations with regional health care systems. The health system will not be involved in the insurance negotiation arrangements that Medica will hold with regional health systems, according to Mayo CFO Dennis Dahlen. He characterized the arrangement as "a joint effort" but said it's "not a joint venture." He added, "We're interested in making Mayo available to as many patients as possible."

    The health system and insurer did not release the financial terms of the agreement.

    Dahlen said, "Having Mayo as a provider as part of the network for specialty and complex care opens the playing field a bit to the kind of provider networks and organizations that Medica can work with in the local markets." He added, "They don't have to have an academic medical center presence, for example, to do the complex oncology and orthopedics or whatever else. We can provide that."

    The new arrangement builds on the existing relationship between Mayo and Medica. The two have developed ACO products for the commercial market and individual markets in southeastern Minnesota and southwestern Wisconsin. Medica acquired Mayo's third-party administrator business in 2017 (Anastasijevic, Mayo Clinic News Network, 9/13; Haefner, Becker's Hospital Review, 9/14; Snowbeck, Star Tribune, 9/13).

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