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Tuesday Talk: Is Mayo worth the investment?

February 19, 2013 By Joe Sheeran, Communications Director

The Mayo Clinic’s request for $585 million in taxpayer funding (which includes special taxing authority in Rochester) to fund public infrastructure costs for its $6 billion expansion has a number of pros and cons. A Mayo press release promises at least 35,000 new jobs and $3 billion in new tax revenues.

Our Lee Egerstrom says such an expansion has the potential to create spin off companies and new medical industries. However, a billion dollar state budget deficit makes this a tough sell. MN 2020 readers have expressed concerns about who will really benefit from public infrastructure investments.

What do you think? What are your pros and cons on using taxpayer dollars to invest in the Mayo Clinic?   

Thanks for participating! Commenting on this conversation is now closed.

31 Comments:

  • Jon Miners says:

    February 19, 2013 at 7:15 am

    If we can justify to ourselves the Vikings, Twins, and even the new Gopher Stadiums, feel good projects of no real substantive value to our community, surely the argument for the Mayo expansion which contributes real value must be compelling.

  • vwking says:

    February 19, 2013 at 7:46 am

    Mayo Clinic is the pride and joy of Minnesota. One of the institutions that is recognized and respected world wide. It is also doing something most worthy that can touch the lives of people from far away as much as it does Minnesotans. I would support using public money to help further their cause, but with close scrutiny of how the funds will be used. Upon close review of their plans and possibly some negotiations, I think it is an investment Minnesota will not regret. In my travels all around the nation and around the world, whenever I mention I was from Minnesota, people invariably associate the Mayo Clinic with where I am from.

  • eldon jones says:

    February 19, 2013 at 8:10 am

    how much of a raise will the ceo of the mayo if they would cut there salary in half or more they would not have to ask for money from the state, they get money from washington,that would there problems, we cannot not get money from the state for repairs.

  • Mike Downing says:

    February 19, 2013 at 8:13 am

    Mayo Clinic is a remarkably successful MN institution. It has a great reputation both nationally and internationally.       

    My confidence in making an investment in Mayo Clinic is 100X greater than anything else that this Legislature and Governor can come up with.

  • Tom Brinkman says:

    February 19, 2013 at 8:38 am

    ” This article provides a rational analysis as a starting point, not just a “sound bite” knee jerk comment, and not just a political party line statement.  But here is another point:  I live in Rochester, and have seen over many decades that through economic ups and downs that the Mayo health presence has consistently been a solid, steady economic contributor with only very shallow dips during recessions.  The overall community stability is also helped by the presence of a large, very successful and stable IBM development laboratory and manufacturing plant.  The RISK IS REALLY VERY LOW compared to typical business investments and start ups!  This truly is a RARE INVESTMENT OPPORTUNITY…this mostly occurs in the future, not so much in the current tight financial timeframe.  The state will definitely benefit financially from this, all the way from the Mpls airport and Mall of America, down to the southern border of Minnesota. ”  Tom Brinkman

  • Margot Roberts says:

    February 19, 2013 at 8:40 am

    I am more upset that   Governor Dayton is short sighted by returning 500 dollars to each of the states homeowners which includes myself. This money could resolve funding issues and resolve our state deficit.

    I would be happy to talk about the Mayo after we take care of our state infrastructure

  • ChristeenStone says:

    February 19, 2013 at 8:56 am

    I feel it would be the best investment we could make. They have been and still are a business that is know World Wide as outstanding. I have been told the way they operate should be a pattern for the Health Care we are now trying to institute. Having been an advocate for good Universal Health Care for 25 years, I feel they are a real asset to our state. They are a good investment for new jobs.

  • Jeff Thompson says:

    February 19, 2013 at 9:09 am

    Barack Obama made a big appearance at a factory in Asheville, NC last week that offered to add 200 jobs to the economy.  The Destination Medical Center proposed by the Mayo Clinic offers 15,000 new jobs in the fast growing health care industry, plus an additonal 20,000 new jobs in support. 

    It is important to realize that the Mayo Clinic is rejecting the Race to the Bottom mentality of many businesses. This could be a boon to our state and a boon to our economy.  They are planning an investment of 3.5B of their own and expect to attract another 2.5B in outside investments.  The proposal is for the State to provide, once measurable performance benchmarks are met, 585M in infrastructure in the Rochester area to support this expansion.  I think it is a deal worth serious consideration.

  • Marilyn Heltzer says:

    February 19, 2013 at 9:21 am

    I speak from personal experience. We have a fine medical community in Bemidji, but when my husband got a dire cancer diagnosis, we were so fortunate to be able to go to Mayo for verification of the diagnosis. The Mayo hematologist and the Bemidji hematologist worked together on treatment. Life is more precious than money. YES, Mayo is definitely worth the taxpayers’ investment!

  • Karen Poortvliet says:

    February 19, 2013 at 10:44 am

    I don’t agree with this large an investment of taxpayer dollars.  We have a fine medical institution at the University, and they are operating on fumes as opposed to an ‘ask’ like this.  They are supposed to be supported by our taxpayer dollars.  Mayo, while a valuable member of the medical community, only ‘teaches’ medicine.  The University, on the other hand, ‘teaches’ our teachers, our engineers, our nurses, our entire community.  They deserve this kind of funding from taxpayer dollars.

  • JS says:

    February 19, 2013 at 10:50 am

    Eldon, the CEO of Mayo makes about $700,000 annually, which is close to the most LOWLY paid players on the Vikings. Supporting Mayo’s expansion is a no brainer. Here is a world-class institution, providing critical services and high-paying, skilled jobs. And it wants to create 15,000 more excellent jobs. As opposed to other massive public subsidizes like the Mall of America or sports stadiums that provide shopping or entertainment and low-paying, low-skill jobs like minimum wage clerks and hot dog vendors. Every single Walmart—and there are more than 50 in Mn—which repeatedly decimate local businesses and pay wages so low that tax-payers have to subsidize their employees’ medical care has received enormous public subsidy of infrastructure or it would never have been built. Dare I mention Block E? How about putting our money on excellence and opportunity for a change.

  • carl brookins says:

    February 19, 2013 at 10:57 am

    Of course it’s a good/wise investment idea. We’re using public funds to build and operate sports stadia, why would we not make similar provisions for one of the stellar and forward looking medical operations in the world?

    In my opinion, it’s a no-brainer

  • Rolfe Leary says:

    February 19, 2013 at 10:58 am

    “What do you think? What are your pros and cons on using taxpayer dollars to invest in the Mayo Clinic?”

    Excuse me, but is this the correct question? Aren’t citizens being asked to support infrastructure for Rochester, not Mayo?  Mayo is certainly the 80 pound gorilla, but ....  Streets might need to be widened as Mayo expands and has more ‘clients’.  More tunnels may need to be built, etc. What about schools and parks and other essentials of a healthy life?  Just look at all the housing being built with private money.  It seems to me MN and Rochester citizens need to pitch in and help an excellent institution—community partnership keep moving forward as rapidly as possible.

  • Mathews says:

    February 19, 2013 at 11:34 am

    Mayo’s Integrated Care model is not available in the Twin Cities, which is
    why I have been to Mayo instead my own network for serious issues. I would
    support Mayo’s request if it included high speed rail to/through Rochester,
    as Mayo & Rochester have elsewhere proposed, because it would offer Mayo’s
    excellence to the Twin Cities market. As I understand it, though, the
    current request would fund only local infrastructure in Rochester, which
    would be a mistake without the connection to the TC market. For seriously
    afflicted nonwealthy patients, driving or medivacking to Mayo from 90 or
    more miles away is an insurmountable barrier. If Mayo wants what it is
    requesting, it should combine this proposal with its longstanding but muted
    support for high speed rail which, of course, would also serve TC
    International Airport.

  • Steven Miller says:

    February 19, 2013 at 11:44 am

    I am concerned about what the tax payer’s money will be used for.  If it is for infrastructure such as improving access to Mayo by widening roads, making tunnels, improving transportation, etc., I am all for that.  However, the planned use of the tax payermoney needs to be more transparent.  For example, the city has requested $37 million to expand the Mayo Civic Center which is currently is underutilized.  Tens of Millions of dollars were spent to build an overpass near Pine Island (truly a bridge to no where)to service a “biotech park” which Mayo and others promoted and yet which has sat empty for several years since being billed as the “next big thing”. There is much talk about making Rochester a “destination medical city”.  What does that mean?  The city already attracts patients from all over the world.  Will the taxpayers money be used to upgrade the local mall, reconfigure the downtown to make it more appealing to medical visitors?  I guess what I am saying is that while Rochester should help nuture the wonderful Mayo Clinic, I don’t believe that tax payer money should be used for frivolous projects to enhance shopping or food choices for visitors to the medical destination city.  Rochester currently lacks adequate facilities for its residents, such as public indoor and outdoor swimming pools, and a proper-sized recreation center.  There currently is no money for these things which would benefit all residents of Rochester.

  • Harold W Onstad says:

    February 19, 2013 at 12:36 pm

    Have we Minnesotans really gotten so confused about what deserves our investment as taxpayers and what doesn’t? Do we really take more pride in our endlessly mediocre, and always threatening to take their feeble show somewhere else, professional sports teams than we do our home-grown, world-renowned medical center and the city it calls home?
    Like shortsighted homeowners who put off needed maintenance because it seems so expensive, we have too long tried to avoid needed expenditures to keep the state we call home in good shape. Do we not see that the only way we are ever going to maintain any standing as a great place to live is to keep our entire infrastructure, the physical and the intellectual, up to date and strong?
    For the state of Minnesota, Rochester and the Mayo are vital pieces of that infrastructure. That the city and the institution are asking each of us to contribute to their future, and ours, seems only right.

  • Bernice Vetsch says:

    February 19, 2013 at 2:33 pm

    I gathered from an article about Mayo’s request that the state’s $535 million would be for infrastructure.  If the expansion does indeed lead to 35,000 new jobs, the state will earn back its money and should enthusiastically take part.

    The Mayo model includes retaining doctors on salary rather than paying for procedures performed or visits made. It means that Mayo physicians are not in competition with one another for patients. Instead, physicians, nurses and other personnel work as teams who provide whatever range of services each patient needs. 

    Oddly, although this would be the model of care under single-payer universal health care, Mayo’s president said a few years ago that single-payer is not what he/they would ever choose.

  • Mary Ann says:

    February 19, 2013 at 4:38 pm

    As a Mayo patient who has also had neurosurgical procedures, I can tell you that many patients come to the Mayo from out of state and out of the country.
    While they obviously bring business to local hotels, shops, eateries, etc., it also seems odd that we are expected to shoulder the cost for healthcare opportunities for people from other states. 
    Our son receives specialized care at the University of Chicago medical center.  They completed a brand new adult hospital with fundraising.  Illinois would never give them this kind of money.  Will we benefit from the new hospital?  Yes, absolutely. 
    But as a Minnesotan, I certainly didn’t expect the citizens of Illinois to shoulder the cost; not when they are fighting poverty and crime.

  • Marsha Durkin says:

    February 19, 2013 at 5:02 pm

    I agree with this comment.  We have a long tradition of using tax dollars to provide infrastructure and other services to residents and businesses.

  • bill hane says:

    February 19, 2013 at 5:55 pm

    why do tax payers ? have to fund a rich mans clinic

  • Frank says:

    February 19, 2013 at 6:02 pm

    As a longtime Rochester resident myself (w. a spouse employed at Mayo), I too have greatly benefited from, and am grateful for, what locals call the “WFMC”/i.e. World-famous Mayo Clinic. As to its caring mission—and no doubt one reason Why the Clinic has not eagerly embraced national, universal care proposals over time—“Mother” often covers itself w. a “not-for-profit” institutional mantle, while reaping billions from benefactors, being somewhat “patient selective,” and generously rewarding LOT$ of its staff. Having said that, and in self(ish?) interest, I’m in qualified agreement with those who think the state should grant Mayo’s current request for tax-generated monies…But not w/o exercising some commonsense due diligence re same.  One controversial element of this effort—which, just in the last month, has changed its name from “Destination Medical Community” to “Destination Medical Center”—centers around some $20+ million in near-future monies which will be generated locally by a voter-approved, multi-use sales-tax surcharge.  For several years now, few details have been forthcoming as to just WHAT & WHERE these dollars will be going, with many skeptics seeing the possibility for misuse; or, at best, unregulated business and/or Mayo-discretionary institutional uses. Some of us who are active in the downtown Rochester neighborhoods would even like to see some of it directed to historic preservation; but we’re not holding our collective breath.  Anyway—$tay Tuned!

  • Tom Brinkman says:

    February 19, 2013 at 6:14 pm

    Bill, having lived in Rochester and been treated at the Mayo Clinic for 47 years, I can attest that the patients span the whole range of low to high incomes.  A huge percent of patients are from southern Minn, Iowa, Wisconsin, and the Dakotas that are within driving distance. A huge number are even more local and can stay at home during treatment and appointments.  And many travel from farther (air travel) which does cost more.  Patients from afar are attracted by the excellence of Mayo’s medicine and its worldwide reputation, but these are not the largest percentage of patients.  The Mayo proposal is not to pay for patient treatment, but to help build the local infrastructure capacity to handle more patients which will allow Minnesota/Mayo to keep in the running as a major medical center nationwide.  This will bring in many, many more jobs, income tax, sales tax, etc… as revenue for the southern part of the state (The Mpls Airport and south to the Iowa border).
    Tom Brinkman

  • Michael Wojcik says:

    February 19, 2013 at 7:06 pm

    As a Rochester City Councilmemeber, I support the vision of a Destination Medical Center (DMC).  I know that this investment in terms of economic and social returns will vastly exceed those of Target Field or the new Vikings Stadium.  Despite this, the public contribution to this project is a far lower percent than either of those projects.  The local contribution per capita from the City of Rochester is actually 44% higher than that of Minneapolis for the Vikings stadium.  Unlike other investments made by the state, the DMC will not get one penny unless it provides the growth that leaders claim.  Lastly, the community of Rochester sends around $90 million more to St. Paul every year than we get back.  That number will actually INCREASE under the plan.  The DMC is a great investment for Rochester, for Minnesota, and in the health of humanity.

  • Rick says:

    February 20, 2013 at 8:20 am

    In my view, expanding Mayo is a no-brainer. Combining care, research, prevention, jobs and infrastructure improvements, this proposal should carry all our support. I’d much rather give my tax money to projects like this and educational endeavors, than building new football stadiums.

  • Aaron Richard says:

    February 20, 2013 at 8:21 am

    Over the last 20 years Rochester has grown from about 75,000 to 110,000. So about 35,000 people in the last 20 yrs. Seems like the infrastructure has done a pretty good job in keeping up with this kind growth pattern. Why is Mayo making a big deal about this?

  • vwking says:

    February 20, 2013 at 9:23 am

    In the 2012-2013 Best Hospital Ranking of USNews.com, Mayo is ranked number 3 in the nation, after Massachusetts General and John Hopkins. But at the same time in many articles, Mayo is praised for their effectiveness in managing costs. In this respect, they are not far behind Intermountain HealthCare. They are by no means inexpensive, but they are considered tops when it comes to managing costs.

    Although the Mayo has a reputation for being a “rich man’s” hospital, it is so only because a lot of rich people choose to receive treatment there, not because they are more expensive. I know of a number of my friends who have received treatment there and none will I consider rich.

    Because of its reputation, the Mayo Clinic brings in revenue from outside Minnesota. It is a net gain for the state. Not to mention the restaurants, hotels, shopping malls, taxi services, etc. in the vicinity. It is not just Minnesotans spending money in Minnesota. Anything to make this revenue stream easier to attain is good investment in my book.

    Finally, I can name you half a dozen or so companies in Minnesota that were started by people who either worked at, or with, the Mayo where they discovered a better way of building a surgical device, or software package. Then, in order to provide support for them, other companies are started that provide specialty coatings, specialty metals, and other services. In aggregate, these companies sell globally and bring in billions of dollars of revenue into Minnesota every year. Together, the U of Minnesota and the Mayo Clinic are inspiration and incubators for new ideas that create new businesses and jobs in Minnesota.

    I hope we can find the will and means to make the Mayo expansion happen.

  • Janne says:

    February 20, 2013 at 11:27 am

    It is a public responsibility to pay for infrastructure.  However, we’ve invested in a lot of wasteful infrastructure that undermines our communities.  1) parking is never a good public investment, and often results in lowered tax revenues.  2) widening streets is usually a poor investment, see comment 1.  3) it’s easy to promise new jobs, but what accountability is there for the public funds if the jobs don’t appear (and is the cost benefit for those jobs really better than opportunities elsewhere?) 4) why is it the state’s job to pay for infrastructure in Rochester, but not in Willmar, or Bemidji, or West Saint Paul?

  • msg says:

    February 20, 2013 at 11:58 am

    “February 20, 2013 at 7:21 am
    Over the last 20 years Rochester has grown from about 75,000 to 110,000. So about 35,000 people in the last 20 yrs. Seems like the infrastructure has done a pretty good job in keeping up with this kind growth pattern. Why is Mayo making a big deal about this?”

    They want the MN tax money to go to a 3rd party that will enable it to be used for most anything they want.  They could turn around and sink 3/4th of it into a huge office / hotel / condo complex, the office space of which the mayo just turns around and leases, and it would be legit.  They want to money to legally go to the MDC because it obfuscates where it’s going and because it can go to anything the DMC wants it to.

    If the money was just for infrastructure, the money could go to rochMN and Olmsted in the form of existing grant programs when and if needed.  There is no need for MN tax money to be turned over to the DMC for just roads and sewer.  But if they do things the way they do today, they can’t dole out money for projects that play into their big city visiion for Rochester.

    That’s right, too many of the folks yammering about the DMC are ashamed of the very thing that makes the Mayo and Rochester special and different from others.  They’re convinced what Rochester needs is more traffic, more muggings, big condos, bike lanes, stores that sell dog sweaters, even more stores selling $6 coffees and $20 / lb organic, oxygen-free yak roasts.  And they want to use MN’s money to pay for their cronies pet projects to try to do this.

  • George Kzr says:

    February 20, 2013 at 12:19 pm

    Hi All, Use the same funding mechanism as the Vikings football team is using to fund the stadium.  Only those people interested in funding the expenditure will have the chance to put there money were the need is….......Go for it…kzr

  • norman hanson says:

    February 20, 2013 at 4:37 pm

    One commentator noted that the Mayo Clinic is the third ranked hospital in the US or in Olmsted County or whatever.  Sorry to tell him/her this, but the Mayo Clinic is not as in is not licensed as a hospital in Minnesota.  Check with the licensing section of the Minnesota Department of Health if you doubt that.  The two hospitals associated with the Mayo Clinic, St. Mary’s and Methodist, are licensed hospitals in Minnesota but the Mayo Clinic is not.  In fact, as many folks no doubt already know, medical clinics are not licensed in Minnesota and that includes the Mayo Clinic.  The providers who work in those clinics including physicians, nurses, therapists of various sorts and so on are licensed/regulated by their specific licensing boards.  As such, it is always amusing and reflective of a lack on knowlege of hospital licensing in Minnesota when yet another uniformed person refers to the Mayo Clinic as a hospital.

  • Ron Kuecker says:

    February 23, 2013 at 10:06 am

    The only reason we have a budget deficit that large is the bloated budget submitted by a tax and spend governor.