Cleveland Clinic plans massive spending campaign in 2010
The Cleveland Clinic will spend $848 million on renovations and construction across the health system this year and is looking for ways to continue to expand its footprint locally, nationally and abroad. Clinic CEO Dr. Delos “Toby” Cosgrove announced those plans during his State of the Clinic address this morning. The new construction projects come on the heels of the $1.2 billion spent in recent years on various building projects, such as the Clinic’s $506 million heart hospital. This year, the Clinic will remodel patient floors, the intensive care unit and the Crile building on its main campus, all of which are part of an overall renovation effort that began after the Sydell and Arnold Miller Family Heart and Vascular Institute and the Glickman Urological & Kidney Institute opened in November 2008. The overall renovation is expected to be complete this year.
The Carnegie Avenue site where the podiatry school previously was located could be used for a parking garage, but a final decision has not yet been made, according a Clinic spokeswoman. The Clinic has hired London-based architect Norman Foster to plan construction for the main campus.
“By the end of the year, all of this campus’ clinical and outpatient facilities will be renewed,” Dr. Cosgrove said.
In addition, the hospital system is planning a new site for data storage in Brecksville at an estimated price of $150 million.
The Clinic already has purchased a 33,000-square-foot building in Solon for a call center that will house 350 employees, Dr. Cosgrove said. Fairview Hospital is designing a two-story addition that will include a new emergency department and intensive care unit, ground for which will be broken by the end of this year, he added.
The plans to capture more market share don’t stop there. The health system is creating a strategy to grow in Northeast Ohio, across the country and around the world, Dr. Cosgrove said. The Clinic last year partnered with a Las Vegas businessman to build the Cleveland Clinic Lou Ruvo Center for Brain Health in Las Vegas, and the Clinic’s hospital in Abu Dhabi is on schedule to open in 2012, he said.
“We need to be selective and thoughtful about the ways we go forward,” Dr. Cosgrove noted.
'The storm has not passed'
Locally, that means bringing about 200 more independent physicians onto the Clinic payroll of about 2,000 doctors. Dr. Cosgrove said the Clinic currently is in talks with those physicians, who continue to seek employment with the Clinic because it is expensive to run their own business.
Another 172 doctors who currently are employed by the Clinic's community hospitals have been offered positions by the main campus so they can be given the same compensation package as other employed doctors, he said.
Dr. Cosgrove said there are plenty of doctors in Northeast Ohio who want to remain in private practice but who repeatedly ask the Clinic how they can obtain the same reimbursement levels that the Clinic receives from health insurers.
In response, the Clinic is creating what is called the Quality Alliance. Under this alliance, private practice doctors must agree to maintain the Clinic's quality standards and, in return, the doctors will work with the Clinic to negotiate reimbursement rates with Medicare, Medicaid and private insurers, said Michael McMillan, executive director of market and network services for the Clinic.
About three years ago, the Clinic formed the Community Physicians Partnership, in which it helps 850 private practice doctors with issues such as access to malpractice insurance and group purchasing of supplies, Mr. McMillan said. All of these doctors are eligible to participate in the Quality Alliance, he said.
As Dr. Cosgrove looked ahead, he also noted that the Clinic fared well in 2009. Despite occupancy levels holding steady at 71%, the Clinic's total operating revenue reached $5.57 billion, up 8% from about $5.15 billion in 2008. Operating income increased to $358 million, up about 43% from $250 million in 2008.
However, he warned Clinic staff to keep an eye on health care reform and the unemployment rate. Though Ohio's unemployment rate is hovering at about 10%, hospital admission levels didn't drop because the unemployed were covered under COBRA benefits, he said.
Those benefits now are ending, and the Clinic already is seeing a drop in admissions, Dr. Cosgrove said. In addition, the payer mix has shifted more toward Medicare and Medicaid instead of private insurance. Though the Clinic's payer mix has shifted by only 1% so far, “that is the equivalent to $50 million in our budget line,” he said.
“The storm has not passed,” Dr. Cosgrove said.
|
|
Subscribe
Print
E-mail