What is drawing Cleveland Clinic, Mayo Clinic and other AMCs to Florida?

Some of the biggest names in healthcare are competing for patients in Florida, according to a Star Tribune report.

Rochester, Minn.-based Mayo Clinic is injecting $100 million into its Jacksonville, Fla., campus through the construction of a center designed to address complex cancer, neurologic and neurosurgical care. Construction on the 150,000-square-foot facility will begin this summer.

In the last year, Cleveland Clinic and Johns Hopkins Medicine in Baltimore have also announced plans to grow their respective operations in southeast Florida and St. Petersburg, Fla., according to the report. Additionally, Memorial Sloan Kettering Cancer Center in New York City rolled out plans for joint operation of a cancer center in the Miami area, and MD Anderson Cancer Center in Houston recently opened Baptist MD Anderson Cancer Center in Jacksonville. Baptist MD Anderson Cancer Center is located on the campus of Baptist Medical Center Jacksonville.

Health systems are "leapfrogging outside of their immediate service areas" to expand their operations in Florida, said Martin Arrick, an analyst with Standard & Poor's, according to the Star Tribune. These systems are competing for patients with serious conditions that generate more revenue.

Florida is among the nation's largest state's by population, as well as one of the fastest-growing states, the report notes. Almost 20 percent of its 20.3 million residents are over age 65, a demographic that uses a lot of healthcare. Analysts said those factors make Florida an attractive market, along with its proximity to patients who travel for healthcare from Central and South America, according to the report.

Allan Baumgarten, an independent healthcare analyst in St. Louis Park, Minn., told the Star Tribune that the Medicare program pays more per person in Florida than in many other parts of the country, for various reasons.

He cited figures from the Dartmouth Atlas of Health Care, which showed average Medicare spending in 2012 for a Rochester, Minn., resident was $7,325, compared to the $11,239 average in Jacksonville.

"It's part of the business opportunity for Mayo to grow in Florida," Mr. Baumgarten added, according to the report.

Hospital officials told the Star Tribune their growth plans aren't motivated by payment rates, but demand in Florida for what they offer.

"What this allows us to do is expand our ability to take care of patients with complex needs like cancer," said Gianrico Farrugia, MD, CEO of Mayo Clinic in Florida. "It allows us to serve the people that want to come to us much better than we've been able to thus far because of space limitation."

 

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