Randy Farrow, Mankato Clinic CEO, said it's more difficult for the clinic to compete with an organization such as Mayo Clinic Health System, which has a hospital and other services on site, and can send people to Rochester without leaving the system.
The Mankato Clinic only controls about 30 percent of the costs incurred by its patients. The other 70 percent is incurred at hospitals or other service providers. So when Preferred One asked them to reduce costs by 20 percent to hit its tier 2 price standard, it struggled.
"They wanted a 20 percent reduction to stay at tier 2," Farrow said. "We looked at it and thought it wasn’t reasonable or sustainable."
Farrow said they've been told by insurance companies that their rates are competitive. "They've told us we're a good bargain." But the clinic's overall patient costs are determined by all costs incurred, not just costs incurred at the clinic. They're still trying to work to get their rates down to tier 2 status.
Mayo, meanwhile, says the Preferred One rates will apply at its clinics in Mankato, Le Sueur, St. Peter and Lake Crystal. Anyone in those communities who is looking to sign on with Mayo can do so.
Whether that's a good idea or not is another question.
For some, Campbell says, it may be an easy choice based merely on cost. But for others, the decision to switch from one doctor to another is one that shouldn't be entered into lightly.
"I can’t say I’d advise people to switch," Campbell said. "I think they need to do what's in the best interest of their families."
To that end, Campbell says he hopes the new tier assignment could encourage people to look at Mayo and consider everything they offer and their reputation.