Cleveland Clinic Grows Its Inpatient Volume; Relatively Unique Business Model

A recent article in Modern Healthcare featured an interview with Dr. Delos "Toby" Cosgrove who is the CEO of the Cleveland Clinic (see: Cleveland Clinic CEO talks strategy, expansion and standardization). There are a number of very interesting points in this article but one jumped out at me so I will start with it. The exchange is listed below: ...

A recent article in Modern Healthcare featured an interview with Dr. Delos "Toby" Cosgrove who is the CEO of the Cleveland Clinic (see: Cleveland Clinic CEO talks strategy, expansion and standardization). There are a number of very interesting points in this article but one jumped out at me so I will start with it. The exchange is listed below:

MH: Cleveland Clinic is unique in that you've actually grown inpatient volume. What do you attribute that to, and is it sustainable?

Cosgrove: About 80% of our patients come from about a six-county area, about 19% come from the rest of the U.S. and about 1% from overseas. One of our major strategies has been hospital transfers. We have about 20,000 hospital transfers on an annual basis, and people are coming to us for tertiary, quaternary care, and about a quarter of our beds are intensive-care beds. That's one of the things that has sustained us. And we've had substantial growth in our outpatient visits. 

A note in Lab Soft News from 2013 made reference to the Cleveland Clinic as a "super-regional" hospital, a term coined by Atul Gawande (see: Cleveland Clinic Launches Consulting Relationship with ProMedica System in Toledo). I must admit that the term seemed appropriate to me at the time but I wasn't sure of the exact definition. When searching for the term super-regional hospital, I came across this article: New Laws and Rising Costs Create a Surge of Supersizing Hospitals. However, this is about hospitals merging to achieve greater size ("supersizing" hospitals). In the case of the Clinic, I have the sense that it has becoming a super-regional by getting better and not necessarily by getting bigger. 

The patient admission numbers provided by Cosgove help me to begin to better understand the term super-regional, at least in the case of Cleveland Clinic. Eighty per cent of patient admission are from the adjoining six-county area and 19% from the rest of the country with 1% from overseas. An additional important number is that 20,000 admissions are transfers for tertiary and quaternary care. About a quarter of the Cleveland Clinic beds are intensive care. So, in this case, better as I use the term in the paragraph above, means the ability of Cleveland Clinic to manage complex patients and satisfy the referring hospitals and physicians. Because the hospital has only a lesser interest in primary and secondary care, the referring hospitals will not fear that referred patients will be poached and thus not return to their home hospitals.

So the idea that hospitals' inpatient populations will inevitably shrink in the future may not apply to large academic centers and super-regional facilities like Cleveland Clinic and Mayo Clinic (see: Falling Inpatient Revenues at Many Hospitals Is Sign of Healthcare’s Transition to New Models of Integrated Clinical Care...) These facilities, however, need to continue to promote transfers and referrals and many of these transferred patients will occupy intensive care beds.

The Modern Healthcare interview of Cosgove also makes mention of a new "knowledge transfer agreement" between the Cleveland Clinic and Community Health Systems, a for-profit hospital system that owns, operates, or leases 206 hospitals in 29 states with approximately 31,100 licensed beds. Such an arrangement would probably be unthinkable for, say, a prestigious academic medical center. On the other hand, CHS may be a productive source of referrals and transfers for Cleveland Clinic in the future.

Source: labsoftnews.typepad.com