Mayo Clinic's CEO to retire at year's end

No clear successor is in place for Dr. John Noseworthy, who has been at the helm since 2009.

February 21, 2018 at 3:30AM
Governor Mark Dayton and Mayo Clinic president and CEO John Noseworthy announced plans for Destination Medical Center, a $5 billion expansion project in Rochester, Minnesota, Wednesday, January 30, 2013 ] GLEN STUBBE * gstubbe@startribune.com
Mayo Clinic CEO John Noseworthy (The Minnesota Star Tribune)

Mayo Clinic announced Tuesday that Dr. John Noseworthy, the veteran chief executive at the Rochester-based health system, will retire at the end of 2018, capping nearly a decade of growth at one of Minnesota's most visible organizations.

Since Noseworthy was named chief executive in 2009, the clinic's endowment has more than doubled, annual revenue nearly hit the $12 billion mark and the workforce grew by 7,200 to more than 63,000 people.

In the past year, the clinic has been at the center of controversy as residents of Albert Lea mobilized to oppose a Mayo plan to reduce services in the community. But Noseworthy also oversaw a successful push at the State Capitol for a massive economic development project in Rochester to bolster the region's status as a destination for specialty medical care.

"Mayo has a long-standing culture of an insider will become the next CEO," said Richard Davis, the former chief executive at U.S. Bancorp who is also a member of Mayo Clinic's board of trustees. "It's a very thoughtful process, which we're engaging in right now."

In an interview, Noseworthy cited a reorganization beginning in 2009 to make Mayo Clinic operate as one entity — rather than a holding company with distinct operations in different states — as among his most important accomplishments.

Mayo Clinic operates clinics and hospitals in Arizona, Florida, Iowa, Minnesota and Wisconsin. Moving forward with one operating plan has helped the clinic deliver great performance, Noseworthy said.

On Tuesday, Mayo released 2017 financial results showing a 49-percent increase in net income over the previous year, with the clinic earning $707 million on $11.99 billion in revenue.

In 2013, state lawmakers agreed to put $585 million toward infrastructure improvements in the Rochester area to supplement investments by Mayo and private investors. Called Destination Medical Center, the project doesn't direct "a penny" to the clinic itself, Noseworthy said, but balances "the outstanding care that happens at Mayo Clinic with a very strong experience for our travelers who come from 50 states and 140 countries.

"It will be the largest economic development program in the state," he added, "to support the largest private employer in the state."

Last year, Mayo Clinic announced a plan to consolidate services between its hospitals in Albert Lea and Austin, prompting an outcry among residents in Albert Lea. Noseworthy said he still believes it's the right decision, but he said he regretted that Mayo didn't better explain it in the context of a much broader struggle for health care systems to recruit and retain health care professionals in small communities.

For years, employers and insurers have complained that health care costs in southeast Minnesota are high due in large part to Mayo Clinic's presence. Noseworthy disputed the perception of Mayo as unduly expensive, arguing that Mayo has made great strides in boosting efficiency and improving health care value. He added that Mayo Clinic's cost structure is difficult to compare with other providers, because its patients come from around the country and around the world with a complicated mix of treatment needs.

When Noseworthy started as chief executive at the Mayo Clinic, the country was in the midst of the Great Recession and Congress was on the verge of passing the federal Affordable Care Act. Having guided the clinic through those times, Noseworthy said the clinic is in a strong position to lead the next phase of health reform — including reforms recently hinted at by celebrity CEOs Warren Buffett, Jeff Bezos and Jamie Dimon.

In January, Buffett of the investment firm Berkshire Hathaway, Bezos of online retailer Amazon and Dimon of the financial services giant JPMorgan Chase stoked speculation about a major disruption in health care by pledging improvements in their employee health plans. Noseworthy didn't offer a guess on exactly what the CEOs might be driving at, but he said he understood the reason for all the excitement — and the role he believes it would create for Mayo Clinic.

"There's a lot of change that's coming," Noseworthy said. "They have technology. They have cash. They have a will to make this. And there's a void — the American health care system is not a well-integrated system."

"Even with Jeff Bezos and Jamie Dimon and Warren Buffett and all their resources, people will still have serious and complex illnesses and Mayo will be there to provide the most engineered, safest, most efficient care for those patients," he said. "We'd love to work with this group and see where it heads."

Christopher Snowbeck • 612-673-4744 Twitter: @chrissnowbeck


about the writer

about the writer

Christopher Snowbeck

Reporter

Christopher Snowbeck covers health insurers, including Minnetonka-based UnitedHealth Group, and the business of running hospitals and clinics.

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