International interest in Cleveland Clinic's model of care has accelerated as the health system continues to broaden its network and develop relationships around the world.
Cleveland Clinic London, which opened at the end of March, is just the latest example of the Clinic's global expansion. The system has long had facilities in Toronto and Abu Dhabi, and it's working with partners in China and the Bahamas.
"The hunger for the expertise of our caregivers at the Cleveland Clinic has only increased," said Dr. Rakesh Suri, president of international operations. "And therefore we are responding to those requests in a way that continues to allow us to prioritize our mandates here in Ohio and the U.S. where we're based, but also to help those in our global community who seek Cleveland Clinic quality care."
The 184-bed hospital that opened in March is the Clinic's second location in London, following the Cleveland Clinic Portland Place Outpatient Centre, which opened in September 2021.
Cleveland Clinic London links the Clinic's existing research efforts — in Northeast Ohio, Florida, Abu Dhabi and across the global system — to the "tremendous research assets" in London, said Dr. Brian Donley, CEO of Cleveland Clinic London.
"In London are some of the leading universities and leading research institutions, and so we have been working on those relationships, and strengthening those relationships," he said. "And when you strengthen research collaborations, and you get that diversity of thought, and new ways to think about problems and new ways to solve those, that's when you can really see an exponential increase in outcomes for patients and new discoveries."
The Clinic is not disclosing the total cost of its London project, but in 2018 through a U.K. subsidiary it financed £665 million (about $900 million in U.S. dollars) to fund constructing and equipping the hospital.
In July 2021, Moody's assigned Aa2 to Cleveland Clinic's outstanding debt and a stable outlook. Moody's cited, among other factors, its strength as an international brand, which "will allow the system to grow revenue outside of the constrained northeast Ohio market and offset the impact of the pandemic on volumes," the July 2021 rating rationale stated. It also noted that Moody's expects the system's "centralized and integrated governance structure will help the system maintain good cash flow margins while managing execution risks related to its London expansion and ongoing integration of Florida acquisitions."
In 2021, the Clinic's total operating revenue reached $12.4 billion (up 17% from 2020) with an operating income of $746 million — more than triple the year prior. The operating margin was 6%.
Associating the Cleveland Clinic's brand and reputation with more quality facilities in different parts of the world is a plus for the health system across the country and in Northeast Ohio, said Tom Campanella, healthcare executive in residence at Baldwin Wallace University.
"The big question mark will be the financial side of it," he said.
As a private hospital, Cleveland Clinic London offers an alternative to public hospitals of the National Health Service — the United Kingdom's publicly funded healthcare system.
Campanella points to two sides of COVID-19's impact on how patients have accessed care during the pandemic. With public hospitals overwhelmed during surges, private hospital utilization increased. But on the other hand, patients' ability to travel due to restrictions or their willingness to due to comfort level is likely to have a negative impact on international patients across Europe, he said.
And longer term, there's likely to be increased competition.
"There's going to be more private hospitals moving in to try to get that market share," Campanella said. "The challenge for the Clinic is to differentiate themselves from these other competitors."