Cleveland Clinic wants to double its patient population in 5 years. Can it do it?

Topics: Providers, Hospitals, Industry

By Jackie Kimmell, contributing editor  

In February 2019, Cleveland Clinic President and CEO Tom Mihaljevic announced a five-year goal that might, for a less-acclaimed health system, have seemed like pie-in-the-sky: to become "the best place for health care anywhere"—and, moreover, "the best place to work in health care."

Clearly the Clinic, which already was ranked as the No. 2 system in the country by U.S. News, wasn't content to rest on its laurels. It wanted to push further, grow faster, and change more patients' lives.

To get there, Miihaljevic said, the Clinic would need to:

  • "Stay true to who [it is]" by continuing an emphasis on team-based care;
  • Use the best in new technologies to "care for patients throughout their lifetimes;" and
  • Double the number of patients it served, from two to four million.

Each of these goals taps into a distinctive trait of the Clinic and reveals a bet it's making on the future of U.S. health care. But six months after Miihaljevic's speech, is the Clinic on track to meet them?

Let's look at each one to learn more.  

How Cleveland Clinic is 'staying true' to its identity—while evolving to meet new challenges

The idea for the Cleveland Clinic was famously conceived during World War I. Stationed in a French military hospital, four Cleveland physicians imagined a hospital driven by the military principle, "To Act as a Unit," that they had been living by in wartime.

When they returned home, they built a hospital with a culture of collegiality and mutual dependency. That philosophy has been a distinguishing feature ever since, manifested in part through physician leadership, a closed and salaried staff, and a longstanding tradition of research.

Such a cohesive identity was relatively easy to maintain when the Clinic was just a prestigious hospital tucked away in Ohio. But in the 1990s, the system looked to expand beyond Cleveland—and it experienced a number of growing pains along the way.

For instance, in 2009 then-CEO Toby Cosgrove took a hard look at where the growing system stood on several key metrics like patient experience. What he found was middling, at best. "Patients were coming to us for the clinical excellence, but they did not like us very much," Cosgrove reflected. The system ranked in the bottom 4% for staff responsiveness and the bottom 14% for doctors' communication skills.

In response, Cosgrove undertook a massive reorganization aimed at improving the patient experience. It was a change that both required and reinforced the attributes that make the Clinic so unique.

Most notably, the Clinic rejected the tradition of organizing a hospital around physician specialties in favor of a patient needs-oriented approach. Rather than having a department of medicine responsible for cardiology and a department of surgery responsible for cardiac surgery, it created one heart institute comprised of co-located cardiologists, cardiothoracic surgeons, and vascular surgeons.

According to Clinic leaders, the shift—which ultimately led to the creation of 20 patient-focused institutes—led to "positive effects on quality and costs, but also the patient experience." It also further deepened the culture of team-based care.

In other health systems, such a massive change might have faced entrenched internal opposition—in part because such large-scale reorganizations inevitably pull patients away from some providers, potentially harming their income. But at the Clinic, this wasn't a problem: Since all physicians are 100% salaried, they can make clinical decisions and operate in teams devoid of productivity considerations.

Further, all physicians (even the CEO and Chief of Staff) are employed in one-year contracts subject to a rigorous Annual Professional Review (APR). Many consider this APR system to be the "glue" of the Clinic's physician culture, as it holds employees to a high standard of performance, and encourages them to understand how their own performance fits into the Clinic's bigger picture. This likely made physicians more open to such a wide-reaching shift.

Now, 12 years after Cosgrove first pushed for changes, 86% of patients say they would recommend the hospital—14 percentage points greater than the national average. Meanwhile, the components Cosgrove introduced—the team-based institutes and a focus on innovating on the patient experience—have reinforced and become the DNA of the Clinic.

And since taking over as CEO, Mihalevic, has pushed team-based care even more, seeing it as the Clinic's "most important differentiator." For example, he's adopted a massive tiered huddle system through which over 25,000 employees take 15 minutes every morning to coordinate care. He's also pioneered the creation of a medical campus focused on interprofessional and team-based education.

"I think that the health care of the future is going to be primarily team-based health care," he said in an interview, "I think our patients will rightfully expect that their care will be delivered through the coordinated efforts of a number of different individuals with complementary qualifications."

How Cleveland Clinic is embracing new technologies

For decades, the Clinic has been the destination for the sickest patients with the most complex cases. As Mihaljevic's second goal reveals, he thinks it can extend its reach further through digital care.

A "big trend that we're going to see" in the future, Mihaljevic has said, "is the increased penetration of digital platforms…I believe that about 50%, maybe even 75% of current of current visits to primary care physicians and family practices will probably be delivered … through a telemedicine platform," Mihaljevic has said.

The Clinic launched its online platform, Express Care, in 2015. The service allows patients to conduct on-demand or scheduled visits with providers using their smartphone, tablet, or computer. The system had 42,976 virtual visits in 2018—an increase of almost 70% over the previous year.

The system is also investing in telemedicine within its own hospitals. For instance, its eHospital program, which launched in 2014, allows intensivists and critical care nurses to monitor a risk-stratified list of the hospital's sickest patients overnight. If they discover a problem, they can connect to the patient's room through two-way communication, as well as access their medical records, review labs, and provide immediate care.

Notably, the Clinic developed the eHospital technology in-house, ensuring that it can be improved as the Clinic gathers more data. "Because it was built from the ground up, we can tailor it to our needs," said John Tote, nurse manager for the eHospital program.

But the Clinic has bigger aspirations than transforming care within its own walls. In 2000, it opened its Cleveland Clinic Innovations (CCI), an arm that has issued over 1,200 patents, 550+ license agreements, and over 80 spin-off companies. CCI formally partners with other systems such as Providence St. Joseph Health, Mercy Health, and MedStar Health in its Healthcare Innovations Alliance to test innovations and scale commercialization efforts. 

How the Clinic wants to double its patient population

Perhaps the biggest, and most quantifiable, goal on Mihaljevic's list was to double Cleveland Clinic's patient population from two to four million.

The Clinic already has been expanding at a breakneck speed. The system now includes 5,000 beds—encompassing the main campus, 230 beds in Florida, a neurological specialty center in Las Vegas, and a 564-bed hospital in Abu Dhabi. It also sees 7.9 million yearly outpatient visits out of more than 180 locations in Northeast Ohio and a center in Toronto.

In 2021, it's planning to open a 185-bed hospital in London, marking its third effort to export its model internationally. "We'll be essentially taking our Cleveland Clinic culture and our care model to London and working to integrate it with the local health care dynamics," said Cleveland Clinic London CEO Brian Donley.

The London location will take many cues from the success of the Clinic's Abu Dhabi. The four-million-foot facility is, according to Mihaljevic "the largest international project in health care." As the Abu Dhabi location's former CEO, he's not shy about singing its praises: "In the past three and a half years, it has transformed the health care of the United Arab Emirates (UAE), and become the best hospital in the Middle East." The venture is growing around 30% a year.

Mihaljevic believes these international ventures place the Clinic at the forefront of a growing trend. I believe that we're going to see a greater internationalization of health care, as the large healthcare providers from the United States will look to broaden their presence in international markets," he said. The next site for the Clinic may be China.

The system also is continuing to grow domestically. Mihaljevic believes that "here domestically, we're going to see a greater agglomeration of our health care providers … in ever larger systems."

And he wants the Clinic to be one of those ever-growing systems, saying he perceives almost unlimited demand for the Clinic's care. As he said in his 2019 address, "Despite adding more facilities and more caregivers, we have barely, barely made a dent in the demand for our services." Yet he added, "We can't take this demand for granted. It is our moral obligation to open our doors as wide as possible for those in need."

With that aim in mind, the Clinic has been very intentional about the markets it moves into and the partners it selects. For example, in 2019 it acquired Indian River Medical Center and the three-hospital Martin Health System in Florida. It chose the market after seeing "unprecedented demand for our services" in its existing Florida facility.

It's not just putting the Cleveland Clinic's name on the door, Mihaljevic emphasized. He said the integration process would involve "bi-directional communication… not a cookie cutter approach."

It's likely the Clinic will continue with more domestic acquisitions in the next year, as its strategy galvanizes expansion. Telemedicine will also further expand access, with the goal that care is "available to patients in very corner of the world," according to Mihaljevic.

Can the Clinic succeed?

The Clinic has many reasons to feel optimistic about its future. In 2018, its operating revenue increased 6.2% to $8.9 million, it had 354 days of cash on hand, and it had earned its usual U.S. News & World Report top hospital ratings in Cardiology & Heart Surgery and Urology. 

Still, the Clinic's financial performance hit some discouraging notes. In 2018, its operating income fell 19.4% from the previous year, and Mihaljevic acknowledged that declining reimbursements and a changing payer landscape will threaten the Clinic's ability to keep growing revenue

But he doesn't seem fazed. "We're not here to make money," he has said to the media. "We're here to serve our patients."

Ultimately, the Clinic is betting on succeeding with an expensive business model. Involving many high-cost providers on teams and running resource-intensive institutes is a risky bet for lowering costs. Yet leaders are wagering (as they have many times in the past), that the model reduces long-term costs and pays off through delivering high quality care. They also believe it's the way of the future. In addition, leaders betting that telemedicine will allow them to see more patients than ever and that expanding their international reach will bring not only more patients, but even greater international recognition.

It's a gamble they are fully leaning into. As Mihaljevic said in his 2019 address, "I can stand before you and say with healthy confidence that every country in the world wishes it had a Cleveland Clinic, and every patient in the world would come to Cleveland Clinic if they could."