Mayo Clinic CEO: Some health-care middlemen create a lot of ‘waste’ in US system

  • There's a lot of "waste" in the U.S. health-care system that could be simplified, Mayo Clinic President and CEO Dr. John Noseworthy says.
  • Noseworthy says he spoke with the joint health-care venture headed by Amazon's Jeff Bezos, Berkshire Hathaway's Warren Buffett and J.P. Morgan's Jamie Dimon.

There's a lot of "waste" in the U.S. health-care system that could be simplified, Mayo Clinic President and CEO Dr. John Noseworthy told CNBC on Wednesday.

Noseworthy said on "Squawk Box" that he spoke with the joint health-care venture that teams up Jeff Bezos' Amazon, Warren Buffett's Berkshire Hathaway and Jamie Dimon's J.P. Morgan Chase. He said he expects the group to look at how to "remove the intermediary steps that add so much cost and add no value."

Pharmacy benefit managers, which sit in the middle and negotiate drug benefits for insurance plans and employers, have grown over the years, Noseworthy said. However, Noseworthy, who was not referring to any companies in particular, added that some could be simplified.

Is there a way "to go directly to the patient with some of these answers and some of these products?" Noseworthy asked. He added his company is working with different groups to "drive out that waste," which he says is the part of health care that adds "no value."

Noseworthy said health-care organizations are discovering that collaborations can happen in unconventional ways, citing the pending CVS Health-Aetna deal.

"Consumers need to have information that's relevant to them at lower costs and more accurate," he said.

Berkshire's Buffett told CNBC last month that health-care spending is a "tapeworm on the economic system." His venture with Bezos and Dimon, announced in late January, is designed to cut health costs and improve services for the three companies' U.S. employees.

Lowering the cost of health care and improving outcomes will be much tougher than it appears, experts say, with health spending representing 18 percent of gross domestic product and expected to rise.

Noseworthy spoke ahead of CNBC's "Healthy Returns" conference, which is bringing together experts in health care and business to discuss innovation. Noseworthy, who is also on Merck's board of directors, will be attending the event.

Before his current role, Noseworthy was chair of the Mayo Clinic's Department of Neurology, medical director of the Department of Development and vice chair of the Mayo Clinic Rochester executive board.

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