Monday, October 30, 2017

Cleveland Clinic Grapples with Changes in Healthcare

While the renowned Cleveland Clinic, one of the most respected nonprofit health systems in the nation, has traditionally relied on its ability to provide high-priced specialty care, the system, along with every stand-alone community hospital and large academic medical center, is being forced to remake itself. Patients are increasingly seeking care outside the hospital — in a family health center, a doctor’s office, a drugstore or at home. Medicare and other insurers are moving away from volume-based payments to new models, to pay less for better care.

Dr. Delos M. Cosgrove, a 74-year-old former heart surgeon who took over as chief executive about a decade ago, likens what is happening in health care to the upheaval decades ago in the steel industry, where companies disappeared when they were unable to respond to change and new competition. “The disruption is going to happen,” he said. As an inevitable shakeout takes place among health care institutions, a look at how the clinic is responding underscores the industry’s challenges and the flurry of activity taking place as institutions try to adapt.


We briefly talked about these different medical options for patients.  It's interesting to read how Cleveland Clinic is responding to the "disruption."  Thoughts?
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2 comments:

  1. UnknownOctober 31, 2017 at 11:50 PM

    Is the real reason for seemingly such a "panic" to grow because of the fear they will actually disappear if they don't. The CEO likened it to the steel industry of decades ago, but they are fundamentally two different industries... with vastly different competitive concerns. Is their response of gobble and expansion for the bottom-line or something else?

    It is interesting to hear them say they are now advancing a two-system model to provide vertical line of care beginning with a physician-care type. Hopefully they're cost-cutting (w/out sacrificing quality) is a big enough dent that other hospitals can take notice of.

    This is probably outside the scope of this discussion, but I'm just skeptical of an extremely profitable non-profit health provider. Does the subsidized health services or free health care they provide to those in need outweigh how much they are not paying in taxes on $500M in profits. I assume their initial goals were to serve their local community. In lieu of the property taxes not being paid, are they making it up to their local community in other ways?

    Though they do seem very responsive and keen on adapting to change, eg. kiosks and aco's, I'm not yet sold on what their incentives/executive compensation, or otherwise, for doing so might be.

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    1. Spencer AndersonNovember 1, 2017 at 1:27 PM

      Good points being pointed out here by Brent. I think it is interesting that non-profit high end hospitals are still growing so quickly. Cleveland Clinic revenue slowed in 2014 to 4%, but that is actually pretty on pace with huge American corporations, and the average growth rate of Fortune 500 organizations in 2014 was slightly higher at 4.3% (http://fortune.com/2015/06/11/fortune-500-fastest-growing-companies/). That's pretty darn impressive for an organization that doesn't even have the pressure of shareholders, and should be working to serve patients first.

      One of the things I really liked in the article is how they have a clinic in Cleveland that caters to those with chronic health issues through educational opportunities and interactive exercises on site. On the other hand, choosing to operate and staff a 24 story luxury hospital in Abu Dhabi seems like somewhat of a questionable decision in my point of view.

      Regardless of how I feel about these decisions Cleveland Clinic is making, it seems like they are well on their way to revolution-proofing their health organization and continuing their future rise.

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