Skip to main content
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Current News
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • Digital Health
    • Transformation
    • ESG
    • People
    • Regional News
    • Digital Edition (Web Version)
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Midwest
    • Northeast
    • South
    • West
  • Opinion
    • Bold Moves
    • Breaking Bias
    • Commentaries
    • Letters
    • Vital Signs Blog
    • From the Editor
  • Events & Awards
    • Awards
    • Conferences
    • Galas
    • Virtual Briefings
    • Webinars
    • Nominate/Eligibility
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Excellence in Governance
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top Innovators
    • Diversity in Healthcare
      • - Luminaries
      • - Top 25 Diversity Leaders
      • - Leaders to Watch
    • Women in Healthcare
      • - Luminaries
      • - Top 25 Women Leaders
      • - Women to Watch
    • Digital Health Transformation Summit
    • ESG: The Implementation Imperative Summit
    • Leadership Symposium
    • Social Determinants of Health Symposium
    • Women Leaders in Healthcare Conference
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Diversity Leaders Gala
    • Top 25 Women Leaders Gala
    • - Hospital of the Future
    • - Value Based Care
    • - Hospital at Home
    • - Workplace of the Future
    • - Digital Health
    • - Future of Staffing
    • - Hospital of the Future (Fall)
  • Multimedia
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Video Series - The Check Up
    • Sponsored Video Series - One on One
  • Data Center
    • Data Center Home
    • Hospital Financials
    • Staffing & Compensation
    • Quality & Safety
    • Mergers & Acquisitions
    • Data Archive
    • Resource Guide: By the Numbers
    • Surveys
    • Data Points
  • Newsletters
  • MORE+
    • Contact Us
    • Advertise
    • Media Kit
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Providers
March 16, 2013 01:00 AM

Strategic partnership

Cleveland Clinic, CHS focus on costs, best practices

Jaimy Lee
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Wayne Smith, chairman, president and CEO of Community Health Systems, tours Cleveland Clinic's Women's Health Institute with Dr. Gretchen Fisher.

    The Cleveland Clinic's unlikely partnership with Community Health Systems is supposed to marry the best of both worlds: an outcomes-driven academic medical center known for handling complex medical cases and the operational discipline of a large and successful investor-owned hospital chain.

    CHS, the nation's second-largest for-profit hospital system by revenue, will join the Clinic's quality alliance, which was established in 2010. A few hospitals that are part of the Franklin, Tenn.-based system will also work with the Clinic's Heart and Vascular Institute to strengthen their cardiovascular programs.

    The Clinic, meanwhile, wants new expertise managing its operations, a struggle for many academic medical centers.

    “We know that we have to drive value and the two components of value are obviously quality and cost,” said Dr. Delos “Toby” Cosgrove, president and CEO of the Cleveland Clinic. “There's tremendous pressure on improving quality. We think this is a great starting place.”

    The alliance aims to address the very different needs of both organizations at a time when financial pressures are forcing hospitals to make changes in the ways they care for patients, operate their facilities and plan for the future.

    “While there is great uncertainty, everyone in the industry agrees on one thing: Revenue per unit is going down, due to an array of reimbursement pressures,” David Cyganowski, managing director of Kaufman Hall, said in an e-mail. “The most successful health systems will be those who offer high quality healthcare at affordable costs.”

    Cyganowski said that he would expect to see other for-profit hospital companies form similar alliances that trade cost-reduction strategies for clinical best practices, with some occurring at the regional level.

    “Who are the highest-cost institutions in the country?” Cyganowski said. “Academic medical centers.”

    The changing healthcare environment has led to rapid consolidation among hospitals. However, quality has not been the focus of those agreements, said Wayne Smith, CHS' chairman, president and CEO. “This is really about quality and how we can use the Cleveland Clinic resources to provide and enhance and (add) to the quality that we have in the markets where we operate,” he said.

    Under Smith's tenure as CEO, CHS has grown from about 36 hospitals with $750 million in revenue in 1997 to 135 affiliated hospitals spanning 29 states with about $13 billion in annual net revenue. Many of its hospitals operate in small or rural communities, and they handle about 2% of the nation's annual hospitalizations.

    The Clinic operates 11 hospitals in Florida and Ohio and employs nearly 3,000 salaried physicians. Its CEO is a heart surgeon.

    In a note to investors, Darren Lehrich, managing director of U.S. healthcare service providers for Deutsche Bank, referred to the alliance as a “net positive” for both organizations. “Not only does the Cleveland Clinic relationship have strategic merits, but it also is a great stamp of approval given Cleveland Clinic's reputation and the amount of due diligence that it put in to determine if an association with (CHS) was in its best interests,” he wrote in the March 11 note.

    Related content

    Video: Modern Healthcare visits Cleveland to ask the CEOs of the Clinic and CHS why and how they're teaming up

    The Clinic has provided quality-improvement consulting services for several years, a program that serves as a revenue stream for the health system.

    It has branded cardiovascular affiliations with 14 hospitals. In those cases, the Clinic conducts detailed consultative assessments and ensures that the facility meets specific clinical quality thresholds before taking on a hospital as a Cleveland Clinic-branded affiliate.

    The Rochester, Minn.-based Mayo Clinic has been working aggressively to expand a network of clinically affiliated hospitals. Mayo President and CEO Dr. John Noseworthy recently said the system plans to add another 10 organizations this year to the 14 already on board.

    “As healthcare is changing, a healthcare system like ours has to be able to understand the nuances of practicing medicine in a much farther geographical area than we have functioned in the past, particularly on a day-to-day basis,” said Dr. Bruce Lytle, chairman of the Cleveland Clinic's Heart and Vascular Institute. “We have always functioned nationally and internationally in cardiovascular disease. In the future, it's going to be very important for us to continue to be able to do that.”

    With CHS, the Clinic will evaluate the cardiovascular programs at two CHS hospitals, as well as the cardiovascular data and information systems at another five hospitals, said Dr. Joseph Cacchione, chairman of operations and strategy for cardiovascular medicine at the Clinic.

    The goal is provide the information CHS needs to develop quality-improvement initiatives at a systemwide level for its own facilities. “We're not necessarily doing performance improvement with them,” Cacchione said.

    With the quality alliance, in particular, CHS will work with the Clinic to establish clinical integration programs for the 17,000 physicians on the medical staffs of its 135 affiliated hospitals. Approximately 2,500 of those doctors are employed. The data that is collected, analyzed and compared can be used to support predictive modeling and population health management initiatives.

    “If we can do this and do it in an effective way, it should be a helpful model in terms of delivery systems across the country,” Smith said.

    The alliance may also serve as a marketing tool for CHS-affiliated hospitals and boost referrals for the Clinic. And, as health systems continue to evolve, the Clinic's role as a provider of specialized care may become a greater part of what it does.

    Lytle said it's likely there will be a limit in the scope of complex care that a 300- or 400-bed hospital in a medium-sized city can provide, in part because of the costs associated with infrastructure and physician talent.

    “Part of our future is going to be able to offer efficient medical care in conjunction with those organizations so that their patients stay their patients and at that time when they need very, somewhat unusual, and specialized care that they come to the Cleveland Clinic,” he said. “You're not going to be able to duplicate academic medical centers in every city in the country.”

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    Oak Street Health
    Oak Street Health to expand into Arkansas, Iowa, Kansas, Virginia
    finance graphs hospital
    Primary care physicians' pay growth picked up in 2022: MGMA
    Most Popular
    1
    More healthcare organizations at risk of credit default, Moody's says
    2
    Centene fills out senior executive team with new president, COO
    3
    SCAN, CareOregon plan to merge into the HealthRight Group
    4
    Blue Cross Blue Shield of Michigan unveils big push that lets physicians take on risk, reap rewards
    5
    Bright Health weighs reverse stock split as delisting looms
    Sponsored Content
    Modern Healthcare A.M. Newsletter: Sign up to receive a comprehensive weekday morning newsletter designed for busy healthcare executives who need the latest and most important healthcare news and analysis.
    Get Newsletters

    Sign up for enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today
    MH Magazine Cover

    MH magazine offers content that sheds light on healthcare leaders’ complex choices and touch points—from strategy, governance, leadership development and finance to operations, clinical care, and marketing.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS

    Our Mission

    Modern Healthcare empowers industry leaders to succeed by providing unbiased reporting of the news, insights, analysis and data.

    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Current News
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • Digital Health
      • Transformation
        • Patients
        • Operations
        • Care Delivery
        • Payment
      • ESG
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Opinion
      • Bold Moves
      • Breaking Bias
      • Commentaries
      • Letters
      • Vital Signs Blog
      • From the Editor
    • Events & Awards
      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Excellence in Governance
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • ESG: The Implementation Imperative Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Hospital at Home
        • - Workplace of the Future
        • - Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
      • Sponsored Video Series - One on One
    • Data Center
      • Data Center Home
      • Hospital Financials
      • Staffing & Compensation
      • Quality & Safety
      • Mergers & Acquisitions
      • Data Archive
      • Resource Guide: By the Numbers
      • Surveys
      • Data Points
    • Newsletters
    • MORE+
      • Contact Us
      • Advertise
      • Media Kit
      • Jobs
      • People on the Move
      • Reprints & Licensing