Cleveland Clinic names new CEO

The Cleveland Clinic has named Dr. Tomislav "Tom" Mihaljevic as the health system's next president and CEO.

Mihaljevic, now CEO of Cleveland Clinic Abu Dhabi and one of the Clinic's prized cardiothoracic surgeons, will take over Jan. 1, 2018, for Dr. Toby Cosgrove, who announced in May he would step down by year's end following 13 years at the helm.

The clinic's boards of directors and governors unanimously selected Mihaljevic based on the unanimous recommendation of a nomination committee chaired by Robert E. Rich Jr., the chairman of the clinic's board of directors, according to a news release from the system.

"Dr. Mihaljevic brings a depth of experience, first as an innovative, world-class surgeon and more recently as a hospital executive focused on health care quality and safety, patient experience and business strategy," Rich said in a statement. "By nearly every measure — quality, accessibility, finances, innovation, reputation — Cleveland Clinic has made unprecedented strides since Dr. Cosgrove became CEO and president in 2004. Following in his footsteps would be challenging for anybody, but Dr. Mihaljevic has the background, skills and vision to move Cleveland Clinic forward to even greater heights."

Upon Mihaljevic's appointment, Cosgrove will move to an advisory role still to be determined by the clinic's board of directors.

"While I may be stepping aside as president and CEO, I will not be leaving Cleveland Clinic behind," Cosgrove said in the release. "No place else functions quite like Cleveland Clinic, with its physician-driven, patient-centered ethos that encourages clinical excellence, medical education, research and innovation. I look forward to working with Dr. Mihaljevic in any way that I can to further the Cleveland Clinic mission."

Mihaljevic, a native of Croatia who is now a naturalized citizen, joined in the clinic in 2004 as cardiothoracic surgeon specializing in minimally invasive and robotically assisted cardiac surgeries. He took over as the chief executive at the clinic's 364-bed Abu Dhabi operation in 2015. He earned his medical degree from the University of Zagreb before moving to the United States in 1995 to join Brigham and Women's Hospital in Boston. The clinic, in its news release, credits Mihaljevic with helping it build the "world's largest robotic practice."

"Though healthcare is in the midst of a major transformation, Cleveland Clinic is very well positioned for the future," Mihaljevic said in the release. "Our ongoing success will hinge on our ability to maintain high-quality outcomes, while reducing healthcare costs, encouraging innovation, and improving access and affordability for patients."

Mihaljevic, meanwhile, was widely viewed as one of the top contenders for the CEO role alongside Dr. Brian Donley, the clinic's chief of staff and a highly regarded orthopedic surgeon. Like Cosgrove and his predecessor, Dr. Floyd Loop, Mihaljevic is a heart surgeon. Other names floated for the job included Dr. Wael Barsoum, president of Cleveland Clinic Florida and a member of the clinic's board of governors and executive team; Dr. Conor P. Delaney, chairman of the Digestive Disease and Surgery Institute; Dr. J. Stephen Jones, president of the clinic's regional hospitals and family health centers; Dr. Daniel F. Martin, chairman of the clinic's Cole Eye Institute; and Dr. Robert Wyllie, chief of medical operations.

Mihaljevic, no doubt, has some large shoes to fill.

Cosgrove has been a powerful locally and nationally on health care issues. The last two presidents of the United States, for instance, asked Cosgrove — a veteran himself —to lead the troubled U.S. Department of Veterans Affairs, though he declined on both counts.

Under Cosgrove's watch, the clinic expanded its reach in the state, across the country and even overseas. The clinic's annual revenues also ballooned from roughly $3.7 billion in 2004 to $8.5 billion in 2016.

As for Cosgrove's future, he's been vague. Beyond the advisory role, Cosgrove told Crain's in May he's been approached by different organizations, but "my first commitment is to Cleveland." He said he has been seriously considering retirement for a number of years. While there's never a perfect time to leave, now is "as good as we're going to get."

"I have had the opportunity to continue to grow the organization. We are in great shape right now," Cosgrove told Crain's at the time. "We have a whole group of leaders that have been groomed over time, and I thought there was never a better time to make this happen."

The health system's finances also remain strong. Through June 30 of this year, the clinic's operating income was $191.2 million, resulting in a 4.5% operating margin. In the first half of last year, the system reported operating income of $47.6 million and an operating margin of 1.2%, which the clinic last year attributed to small reimbursement and rising operating costs. The improvement comes after a tough year for the clinic's finances in 2016, in which the system saw a nearly 50% decrease in operating income and an operating margin of about 3%. In February,

Cosgrove said he didn't expect to see a "substantial drop" ahead, and that the clinic was off to a "very fast start" so far in 2017.

"Cleveland Clinic names new CEO" originally appeared in Crain's Cleveland Business.