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CLEVELAND CLINIC
CASE STUDY
YUAN FENG
CONTENT
 Service concept
 Customer involvement/management
 Employee management
 More operation design
 Support/funding
 Expansion
 In the future
 Core competencies
 Alternative analysis
SERVICE CONCEPT
 Professional healthcare & excellent service
 Multi-specialty care – comprehensive diagnosis
 Expertise
 High quality service
 Advanced med. tech
 Accessibility: Health Information Technology (HIT) & eCleveland Clinic
 Clinical research
 Patents
 Innovations (researches & innovation trips)
 Education
 Medical educational program: “clinical expertise/practice, scientific inquiry,
biomedical research”
 Teleconference room – distance learning. Dry lab. Exp. with advanced surgical
techs.
SERVICE CONCEPT
Patient’s Value
High quality healthcare 5
Expertise 5
Medical tech 5
High quality service 5
Medical Innovation 5
Accessibility/Convenience 4 (4 ranking
because doctors focus more on
quality than quantity, limited physical
locations and prediction of demands)
Location 3
Price low 1
1 5
CUSTOMER INV./MGMT
 Expertise
 Specialty Centers and Institutes: Focus on diseases rather than discipline.
 Clinically-Focused Teams: improve treatment processes.
 Care Teams: Improve efficiency / patient satisfaction“Faster recovery because of
innovations
 Advanced med. tech
 Promoting innovation!
 Outcomes Measurement: disclosure > improve quality / transparency
 Health Information Technology (HIT): EMR internal
 Staying ahead of the curve and anticipating market demands
 Accessibility
 eCleveland Clinic, MyChart, Dr.Connect, MyMonitoring >>> Customer Engagement
/ relationship with private physicians
 Quality & feedback: World Class Service initiative: 2003. Monthly reports on patient
satisfaction (collected from extensive patient surveys and presented as a series of color-
coded “shade reports”)
EMPLOYEE MGMT
 Human Resource Strategy:
 Training & Edu
 Evaluation
 World Class Service initiative
 Normative: WCS/Review/disclosure of outcomes data vs.
Carrots&Sticks – incentives & 1-yr contract
 Transparency: see the possibility of improving results through efforts
 Quality of Teams
 Care teams
 Clinically Focused Teams
 Prestige: career advance
OPERATION DESIGN
 “Patients First” mantra
 Innovation trips to unrelated industries.
 The Service of Healthcare
 Freedom from “The Paper World” (information
technology-driven strategy) > lower paperwork and
administrative costs
 The Quality Institute (quality control)
SUPPORT/FUNDING
 Non-profit (donations)
 Revenues 2005 $4 billion
 ~2,000 doctors and scientists. ~3,2000
other employees (IRS 990 Form)
 .6% Exe. Salaries / 40% other salaries and
wages.
 The clinic annually managed 53,000
patient admissions, 2.8 million visits,
~70,000 surgical cases.
 Calculations:
 1 Dr.= 26.5 patients/yr. (9 days/admission);
35 surgical cases/yr (1 case/wk)
Total Revenue
2005
4,298,370,497
100.0%
Total Exp. 3,991,483,982 92.9%
Exe. Salaries 28,601,369 0.7%
Other salaries
& wages
1,777,242,154
41.3%
Equipment
rental & mt.
97,274,260
2.3%
Travel 15,954,656 0.4%
EXPANSION
 1988, expansion to Florida
 Issues replicating the model
 distance of facilities: less collaboration
 rising competition
 health care costs rising
 misreading the market pg.11 - failed on market analysis
 negative ROI
IN THE FUTURE
 Alternatives:
 1. Canyon Ranch
 2. Cleveland Clinic Canada
 3. Abu Dhabi
C.C.’S CORE COMPETENCIES
 Quality HC & SVC
 Multi-specialty. Cross-Pollination/Collaboration
 Innovations (technology)
 Research
 Trips
 Medical Education
 Live broadcast of surgery
 Care-team
 Clinical-focused team
Canyon Ranch
 “wellness and lifestyle company”. Partnership 2006. “health as a quality of life.”
 “They knew all about exercise, weight control, diet, and healthy living; we knew all
about the other end of medicine. Together, we could provide the full continuum of
care.”
 Goal: wellness campus.
* Medical Education
* Research
combine data
* Potential increase of clientele
* Well heeled clients (premium!)
* Low cost of entry
* Lower severity index/op risk
* Confusion about brand info
* Org culture/value clash
* HR stretched for the exe.
Health program
Total Revenue ↑↑↑
Total Exp. →
Exe. Salaries →
Other salaries & wages →
Equipment rental & mt. →
Travel ↑ (slightly)
ROI Positive
Cleveland Clinic Canada
 Big market for high quality healthcare. 2005-lifted ban on private insurance in
Quebec. 2006 Alberta. >> CC formed CC Canada. Toronto Health and Wellness
Centre.
* Greater demand
* Existing committed Canadian patients
* Less competition for private healthcare
* Lower severity index/op risk
* Potential increase of clientele
* Lower HR cost.
* Political risks (future policy changes?)
* Questionable success of model replication –
quality control/culture replication
- Canadian <50% specialists. U.S. >70%
(Forbes.com) - how to hire enough good
specialists!
* Initial investment high > higher risk
* Privatized healthcare
* Exactly how many more ppl willing to pay for
the private care?
* Mgmt. need to dedicate to new market.
* Experienced doctors being transferred for
team building
Total Revenue ?
Total Exp. ↓
Exe. Salaries →
Other salaries & wages ↓ (NationalPost.com &
Gone South by Pink, G.
PhD, et. al)
Equipment rental & mt. ↑ (transportation)
Travel →
ROI Positive / ?
Abu Dhabi
 New “Louvre” — one of five museums planned for a multibillion-dollar
tourist development on Saadiyat Island, off Abu Dhabi — to open in 2012.
 Tourists! International market!
 N.Y.U. article implications: ensure quality/mgmt. // + other renowned
universities > higher quality HR resource in the future!
* Abundant Funding
* Symbol of innovation
* Long Term Commitment
- focus on service/healthcare, not
on ST fin. Performance
- know the market better
- culture cultivation
* Reach other emerging markets
* Hub for knowledge exchange
* Edu: renowned universities > higher
quality HR resource!
* Same quality of doctors?
* Questionable success of model
replication – quality control/culture
replication
* Culture Clash: Language, Live
broadcast/medical education
(article: louvre museum)
Total Revenue ↑↑↑
Total Exp. ABUNDANT
FUNDING!!!Exe. Salaries
Other salaries & wages
Equipment rental & mt. Enough time
to build up
competitive
advantages
Travel
ROI

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CLEVELAND CLINIC CASE STUDY

  • 2. CONTENT  Service concept  Customer involvement/management  Employee management  More operation design  Support/funding  Expansion  In the future  Core competencies  Alternative analysis
  • 3. SERVICE CONCEPT  Professional healthcare & excellent service  Multi-specialty care – comprehensive diagnosis  Expertise  High quality service  Advanced med. tech  Accessibility: Health Information Technology (HIT) & eCleveland Clinic  Clinical research  Patents  Innovations (researches & innovation trips)  Education  Medical educational program: “clinical expertise/practice, scientific inquiry, biomedical research”  Teleconference room – distance learning. Dry lab. Exp. with advanced surgical techs.
  • 4. SERVICE CONCEPT Patient’s Value High quality healthcare 5 Expertise 5 Medical tech 5 High quality service 5 Medical Innovation 5 Accessibility/Convenience 4 (4 ranking because doctors focus more on quality than quantity, limited physical locations and prediction of demands) Location 3 Price low 1 1 5
  • 5. CUSTOMER INV./MGMT  Expertise  Specialty Centers and Institutes: Focus on diseases rather than discipline.  Clinically-Focused Teams: improve treatment processes.  Care Teams: Improve efficiency / patient satisfaction“Faster recovery because of innovations  Advanced med. tech  Promoting innovation!  Outcomes Measurement: disclosure > improve quality / transparency  Health Information Technology (HIT): EMR internal  Staying ahead of the curve and anticipating market demands  Accessibility  eCleveland Clinic, MyChart, Dr.Connect, MyMonitoring >>> Customer Engagement / relationship with private physicians  Quality & feedback: World Class Service initiative: 2003. Monthly reports on patient satisfaction (collected from extensive patient surveys and presented as a series of color- coded “shade reports”)
  • 6. EMPLOYEE MGMT  Human Resource Strategy:  Training & Edu  Evaluation  World Class Service initiative  Normative: WCS/Review/disclosure of outcomes data vs. Carrots&Sticks – incentives & 1-yr contract  Transparency: see the possibility of improving results through efforts  Quality of Teams  Care teams  Clinically Focused Teams  Prestige: career advance
  • 7. OPERATION DESIGN  “Patients First” mantra  Innovation trips to unrelated industries.  The Service of Healthcare  Freedom from “The Paper World” (information technology-driven strategy) > lower paperwork and administrative costs  The Quality Institute (quality control)
  • 8. SUPPORT/FUNDING  Non-profit (donations)  Revenues 2005 $4 billion  ~2,000 doctors and scientists. ~3,2000 other employees (IRS 990 Form)  .6% Exe. Salaries / 40% other salaries and wages.  The clinic annually managed 53,000 patient admissions, 2.8 million visits, ~70,000 surgical cases.  Calculations:  1 Dr.= 26.5 patients/yr. (9 days/admission); 35 surgical cases/yr (1 case/wk) Total Revenue 2005 4,298,370,497 100.0% Total Exp. 3,991,483,982 92.9% Exe. Salaries 28,601,369 0.7% Other salaries & wages 1,777,242,154 41.3% Equipment rental & mt. 97,274,260 2.3% Travel 15,954,656 0.4%
  • 9. EXPANSION  1988, expansion to Florida  Issues replicating the model  distance of facilities: less collaboration  rising competition  health care costs rising  misreading the market pg.11 - failed on market analysis  negative ROI
  • 10. IN THE FUTURE  Alternatives:  1. Canyon Ranch  2. Cleveland Clinic Canada  3. Abu Dhabi
  • 11. C.C.’S CORE COMPETENCIES  Quality HC & SVC  Multi-specialty. Cross-Pollination/Collaboration  Innovations (technology)  Research  Trips  Medical Education  Live broadcast of surgery  Care-team  Clinical-focused team
  • 12. Canyon Ranch  “wellness and lifestyle company”. Partnership 2006. “health as a quality of life.”  “They knew all about exercise, weight control, diet, and healthy living; we knew all about the other end of medicine. Together, we could provide the full continuum of care.”  Goal: wellness campus. * Medical Education * Research combine data * Potential increase of clientele * Well heeled clients (premium!) * Low cost of entry * Lower severity index/op risk * Confusion about brand info * Org culture/value clash * HR stretched for the exe. Health program Total Revenue ↑↑↑ Total Exp. → Exe. Salaries → Other salaries & wages → Equipment rental & mt. → Travel ↑ (slightly) ROI Positive
  • 13. Cleveland Clinic Canada  Big market for high quality healthcare. 2005-lifted ban on private insurance in Quebec. 2006 Alberta. >> CC formed CC Canada. Toronto Health and Wellness Centre. * Greater demand * Existing committed Canadian patients * Less competition for private healthcare * Lower severity index/op risk * Potential increase of clientele * Lower HR cost. * Political risks (future policy changes?) * Questionable success of model replication – quality control/culture replication - Canadian <50% specialists. U.S. >70% (Forbes.com) - how to hire enough good specialists! * Initial investment high > higher risk * Privatized healthcare * Exactly how many more ppl willing to pay for the private care? * Mgmt. need to dedicate to new market. * Experienced doctors being transferred for team building Total Revenue ? Total Exp. ↓ Exe. Salaries → Other salaries & wages ↓ (NationalPost.com & Gone South by Pink, G. PhD, et. al) Equipment rental & mt. ↑ (transportation) Travel → ROI Positive / ?
  • 14. Abu Dhabi  New “Louvre” — one of five museums planned for a multibillion-dollar tourist development on Saadiyat Island, off Abu Dhabi — to open in 2012.  Tourists! International market!  N.Y.U. article implications: ensure quality/mgmt. // + other renowned universities > higher quality HR resource in the future! * Abundant Funding * Symbol of innovation * Long Term Commitment - focus on service/healthcare, not on ST fin. Performance - know the market better - culture cultivation * Reach other emerging markets * Hub for knowledge exchange * Edu: renowned universities > higher quality HR resource! * Same quality of doctors? * Questionable success of model replication – quality control/culture replication * Culture Clash: Language, Live broadcast/medical education (article: louvre museum) Total Revenue ↑↑↑ Total Exp. ABUNDANT FUNDING!!!Exe. Salaries Other salaries & wages Equipment rental & mt. Enough time to build up competitive advantages Travel ROI