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Along with the $25 million Huron Community Health Center, the Cleveland Clinic plans to open two additional outpatient facilities.
Along with the $25 million Huron Community Health Center, the Cleveland Clinic plans to open two additional outpatient facilities.

Healthcare Market Profile: Cleveland-Elyria-Mentor

Challenging times: Region dealing with high unemployment, uncertainty

By Jaimy Lee
Posted: July 25, 2011 - 12:01 am ET

The economic downturn, including an unemployment rate above the national average, and uncertainty about the healthcare reform legislation are two issues that are top of mind for hospitals and health systems in northern Ohio.

“We are in one of the counties with the highest unemployment in Ohio,” says Dr. Donald Sheldon, CEO of EMH Healthcare in Elyria, Ohio. “As such, we have been seeing a continuing growth in our bad debt and charity care.”

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Sheldon says the 285-bed hospital, which has revenue of about $250 million, has reported an average annual increase of $4 million in charity care and bad debt. In total, EMH paid $35 million for charity care and bad debt in 2011.

“It becomes an ever-increasing portion of what we are doing,” he says. “We're seeing a more challenging reimbursement environment at a time when we're still suffering the stress of increase of unemployment and increase of bad debt and charity care.”

He says the county's economic issues coupled with concerns about the changes coming from healthcare reform will probably cause consolidation or, in the case of an independent suburban health system such as EMH Healthcare, more efforts to create new collaborations with players including physicians and accountable care organizations.

“The environment is forcing, what I think is important and necessary, cooperation and collaboration, something that I think the industry will benefit from,” Sheldon says.

Within a year, the number of physicians employed by the health system has doubled, he says, and EMH Healthcare is addressing ways to collaborate with physicians who may not want to be employed by a hospital.

“We need to develop meaningful partnerships with physicians to be successful,” Shelton says. “They, too, are experiencing the same stresses that we are.”

Similar to other cities in northern Ohio, including Cleveland and Mentor, Elyria has an aging demographic in a population that has been declining. The region's high unemployment rate has affected the region's hospitals and health systems.

In June, the Cleveland Clinic announced that it plans to close Huron Hospital, a 137-year-old, 177-bed facility in East Cleveland. The health system says there was a 10% decrease in discharges, and on some days it treated as few as 47 patients. In its place, the clinic will open a community health center.

“With declining population and limited use, the hospital was half empty,” says Eileen Sheil, executive director of corporate communications at the Cleveland Clinic. “There's less need for hospital beds across the country and we're seeing that certainly across our health system.”

The clinic, which owns nine hospitals in Ohio, has also reported an increase in charity care as well as general changes in how care is delivered, Sheil says. Along with the $25 million Huron Community Health Center, the clinic plans to open two additional outpatient facilities in Avon and Twinsburg.

“We're making some pretty dramatic changes to accommodate where healthcare is going,” Sheil says in an interview before the closing was announced. “We're trying to be as innovative as possible, to be viable for the future.”

Sheil adds that home care is growing “substantially,” which, in part, has led many of the clinic's community hospitals to report lower patient volume.

The changes have also led the clinic to evaluate current processes, including how it addresses relationships with vendors. The clinic's physicians began partnering with the supply chain team in 2010 to assess how the system chooses its technology and devices.

“All those factors are really changing or causing us to look at new ways of caring for patients,” Sheil says.

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