Leading the Change In Healthcare - BDI 2/25/14 The Future of Healthcare Commu...
MGT 660 - Cleveland Clinic Foundation Overview, Organizational Assessment and Associated Strategic Recommendations
1. GeraldMcGill
MGT 660
9/11/2013 – Module 8 Homework
The mission set forth is to improve the size, reach, patient capacity, range of health services
and quality of care being provided by the Cleveland Clinic over the next one, five and ten years.
Although the Cleveland Clinic Foundation is home to the best cardiology department to date, the
mission is to be among the top five in other complementing departments. In order for the
organization to transcend healthcare, it must develop a greater global presence and a name
synonymous with quality care. Corresponding with the progress made in clinical departments,
the primary mission for achieving quality care among CCF's clerical staff will be two-fold:
1. CCF is to receive the highest system-wide service scores of any health network according
to national standardized HCAPHS and CGCAPHS scores, which measure patient
satisfaction among in-patient and out-patient facilities and provide the basis for federal
subsidies and reimbursements.
2. All CCF clerical staff are to receive cross-training in order to achieve proficiency with
Epic operating system and participate in skill and personal development courses.
The critical impact of the skill and personal development courses will be achieved due to
the appeal for clerical staff stemming from the dual-benefit of building tools that will
positively impact our caregivers both at work and in their own spare time.
The vision is a Cleveland Clinic Foundation that is the best not just in cardiology but in many
other key medical fields. The proposed clerical model in which the level of care rises over time
to create synergy which spans across department lines is entirely new in the medical field and
will be unique to the Cleveland Clinic. The vision of better clinical care combined with the best
service staff is not a new concept to hospitals however the Cleveland Clinic Foundation is
uniquely well-positioned to achieve the vision being described. CCF is a source of pride for
2. GeraldMcGill
MGT 660
9/11/2013 – Module 8 Homework
many Cleveland-area residents who are both employees and patients; the organization enjoys a
combination of the best in clinical care alongside caregiver values and an enthusiastic sense of
community within the health network. Furthermore, as a well-endowed organization with
investment resources, the Cleveland Clinic is poised to expand its network into new global
regions by reinforcing the adage that the qualities associated with good healthcare are
interchangeable among all cultures. The goal is to garner tangible results from the intangible
behaviors exhibited by caregivers on a daily basis.
In order to achieve the vision, the strategy is to create methods and solutions that are all-
encompassing; the solutions will consider both internal factors and external factors and
will examine existing Cleveland Clinic clerical & clinical data. The most critical questions that
must be answered in order for successful strategy development are:
1. What internal improvements can be made
2. What strategic, global, technological and operational areas provide the Cleveland Clinic
with the most potential for new growth, development and synergy.
3. What present and future anticipated environmental factors are likely to be the greatest
drivers of future healthcare demands and the way in which the Cleveland Clinic operates.
With these enhancements, each Cleveland Clinic Foundation department will attract more
dollars, more patients with an even greater reach into different locations and transcend healthcare
for the organization’s ability to provide care from diagnosis to treatment.
Environmental and Industry Analysis
3. GeraldMcGill
MGT 660
9/11/2013 – Module 8 Homework
The Cleveland Clinic Foundation is uniquely positioned to achieve success due to the
competitive forces at work. Among high ratings in many other categories CCF was rated as the
#4 Hospital in America, #3 in Gynecology, #2 in Diabetes & Endocrinology, #1 in Cardiology
in 2012. It is important to note that CCF achieves its highest ratings in many categories that are
directly related to several of the areas with the greatest room for improvement facing patients'
health in the US, specifically obesity and women's health. CCF's most direct competitor,
Cleveland University Hospital system, presents a contrasting ideology of focusing strictly
on addressing clinical problems versus the philosophical view of establishing a plan between
patients and doctors and with the support of caregivers at the Cleveland Clinic. By developing
greater synergy between CCF's clinical strengths and the service side of caregiving, the
Cleveland Clinic Foundation is leading the way in healthcare by helping patients see and achieve
the benefits of forming a committed partnership between patients and their doctors.
As a large-scale buyer of a variety of medical supplies, CCF has substantial bargaining
power with suppliers. In order to support clerical staff, the Cleveland Clinic Foundation provides
its caregivers with work stations strategically placed throughout its facilities; each work station
consists at least of a computer and phone headset but often includes other important tools such as
fax machines, printers and a myriad of medical supplies. Due to a collaborative effort between
suppliers and the Cleveland Clinic Foundation, not only is the organization well-staffed and
well-coordinated, it also uses industry-leading computer technology.
Entry and exit barriers for the Cleveland Clinic Foundation consist primarily of financial
constraints however an additional concern is having the level of skill and experience required to
4. GeraldMcGill
MGT 660
9/11/2013 – Module 8 Homework
effectively address the needs of all patients. One of the Cleveland Clinic’s greatest assets is the
comprehensive scale its of health network versus those of its peers.
Due to the high level of care that patients receive from the Cleveland Clinic Foundation,
the organization benefits from offering healthcare with very few substitutes. Patients who visit
CCF are often facing life-threatening conditions and come to the Cleveland Clinic with the
expectation of receiving unparalleled care and service; in cases where patients are given a choice
between the Cleveland Clinic Foundation and another hospital and given comparable wait times,
most individuals are unwilling to sacrifice the level of care they receive at CCF for the relatively
small level of savings attained (this fact is made all the more true in today's healthcare industry
in which patients benefit increasingly from federally-subsidized healthcare costs). Following the
passage of the Affordable Healthcare Act, the trend in healthcare favors the hospitals which are
able to capture the greatest number of patients and receive the best reviews; future merit-based
reimbursements from the government are to be determined by the HCAPHS and CG-
CAPHS formula which considers the number of patients as well as patient's approval for the care
they received from in-patient and out-patient facilities respectively.
Target Market
CCF's target market is all individuals in the United States and elsewhere. One of the most
critical issues slowing improvements in public health today is the huge gap between what is
known can optimize population health and healthcare delivery and what actually is implemented
in everyday practice. Among the Cleveland Clinic Foundation’s potential target market, 83.7%
of all US citizens have insurance, with 54.4% of the population receiving coverage from private
providers and 29.3% receiving coverage from public providers such as Medicare and Medicaid.
5. GeraldMcGill
MGT 660
9/11/2013 – Module 8 Homework
This means that 16.3% of Americans, or approximately 50 million of the 319 million total US
citizens are without health insurance; by the time the Affordable Care Act is fully implemented,
an estimated 30 million citizens will remain uninsured while the growth of spending on
healthcare will have seen no significant slowing. In 1965, nearly 50% of spending on the cost of
healthcare per patient was out of pocket; today that number is closer to 13%. The issue with
rising healthcare spending relative to worsening overall health of Americans is the fundamental
misunderstanding that patients have regarding their insurance; far too many households view
insurance inherently as free routine care. Because the majority of Americans receive coverage
from health plans that afford patients highly subsidized routine care at the expense of subsidized
catastrophic coverage, the end result is that individuals undervalue the importance of routine
appointments due to subsidies and are also much more susceptible to crippling financial
losses stemming from catastrophic injuries and illnesses.
Product
The Cleveland Clinic Foundation is changing the way healthcare is perceived. Within the
CCF system, uninsured patients can apply for CCF network coverage. By choosing CCF, the
patient gains the benefit of working with a clinical and clerical caregiving team capable of
improving health with greater total coverage and cost effectiveness. CCF embraces changes in
which the caregiving teams raise the level of service being provided on routine visits to coincide
with lower subsidy routine visits so that greater catastrophic coverage is in place for the most
costly medical events during patient’s lives. The result is that through enhanced care and
interaction between patients and caregivers combined with a more balanced billing and insurance
plan, the Cleveland Clinic Foundation is able to provide patients with healthcare that covers all
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MGT 660
9/11/2013 – Module 8 Homework
lifelong issues while still carrying the impact that individuals look for during their visits;
the organization is committed to helping families derive more value from their providers while
staying true to its identity as a patient-centered health system.
Pricing
In order to turn vision into reality, the Cleveland Clinic Foundation must implement
measures that make the organization more appealing in terms of price for the average patient.
Healthcare in the United States accounted for 17.4% of GDP in 2012, which is the highest
percent among all industrialized nations by far, and at current rates is set to grow at 2.2%
annually; despite the high level of expenditure, life expectancy in the US is only 27th in the world
(Berryman, Palmer, Kohl & Parham, Pg. 166). The average amount in out-of-pocket spending on
healthcare per person in America in 2012 was $3,795. CCF must do a better job helping patients
find value in each encounter patients have with their caregivers in the total health improvement
process.
The Cleveland Clinic Foundation is dedicated to enacting measures which benefit the
patient and organizations bottom line. Two ways in which hospitals can lower the price
for patients is by developing leadership and becoming more efficient. Engagement, skill
development, education and training with a focus on greater efficiency and execution are
core areas which the Cleveland Clinic is aiding its employees in enhancing the value of the
Cleveland Clinic. The Cleveland Clinic is building a new generation of leaders from within the
organization with a better sense of using technology to lower costs and streamline patient wait
times, inter-departmental communications and the billing process.
7. GeraldMcGill
MGT 660
9/11/2013 – Module 8 Homework
Promotion
In order for the Cleveland Clinic Foundation to raise the organization’s profile as the
premier healthcare system in the US and beyond, the organization must also raise recognition of
the benefits attained by patients from visiting CCF versus other health systems; this means
raising HCAPS scores in a way that translates to the average patient. Promotion of the Cleveland
Clinic Foundation will involve an organization-wide effort to engage caregivers in the same
development process that is demanded of our patients.
With the goal of attracting a greater number of patients from a broader spectrum of CCF's
potential target market, the Cleveland Clinic Foundation must become more appealing in terms
of price, patient access to physicians, level of care and service; only by improving all of the areas
in conjunction with each other will patients truly feel encouraged to establish comprehensive
healthcare with their providers and empowered to make the important changes that can
meaningfully impact their quality of health. The impact that CCF's mission has had on the
organization's strategy has directly lead to the implementation of MyChart, which is a cloud-
based system enabling patients to have direct access to the same medical information that the
Cleveland Clinic has on file; this includes routine visit information, test and lab results,
immunization records and appointment schedules.
Placement
Another way of improving cost efficiency available somewhat exclusively to the
Cleveland Clinic Foundation is by growing the scale of the organization. As a large and well-
developed health system, the Cleveland Clinic Foundation has the resources available to develop
8. GeraldMcGill
MGT 660
9/11/2013 – Module 8 Homework
and implement operating models which incorporate new concepts into the sum of all CCF's
individual parts; some examples of these new concepts in practice include the opening of CCF
Florida, CCF Toronto, CCF Lou Ruvo Center for Brain Health in Las Vegas and CCF Abu
Dhabi. The expansion of the Cleveland Clinic into new regions is critically important to the
organization because it can help fund research, incorporates new ideas into the organization and
creates new synergies that can improve patients healthcare and save both the organization and
the patient money. Potential new Cleveland Clinic Foundation locations being proposed include
Canada, London, China and India. Each location feeds into CCF's vision of being recognized as
a global leader in healthcare and strategy of choosing locations which offer potential synergies
that will allow the organization to continue providing the great level of care that patients expect.
Organizational Plan
The Cleveland Clinic is dichotomized into three main operations branches. Those
branches are:
1) Clerical
2) Clinical
3) Financial
Clerical
Clerical will be responsible for greeting, check-in, documentation, directing patients,
answering patient questions and generally making Cleveland Clinic Foundation patients'
experiences more enjoyable in any way possible. Clerical is comprised of operations
managers within each department within CCF facilities, with one clerical manager leading
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each CCF family health center; above each facility manager are CCF regional administrators
responsible for coordinating uniformity in service excellence between inpatient and outpatient
facilities. The Cleveland Clinic Foundation envisions an administrative team that is visionary,
charismatic, organized and knowledgeable in the application of new technology in a healthcare
setting.
Clinical
The clinical department of the Cleveland Clinic Foundation is responsible for providing
the best in medical care. Among Cleveland Clinic’s highly ranked programs, nine placed in the
Top 5 nationally and six – heart, diabetes and endocrinology, gastroenterology, kidney disorders
and urology, and rheumatology – placed in the Top 2 (Cleveland Clinic Foundation, 2013). The
Clinical ladder consists of RNs and LPNs, Doctors and medical assistants. Each department at
Cleveland Clinic facilities is headed by a Doctor who acts as a department leader in addition to
his or her responsibilities to their patients. Cleveland Clinic Doctors comprise some of society's
greatest medical minds; a successful healthcare administrator must not only possess the
knowledge of utilizing innovative management tools, but must also develop interpersonal and
behavioral skills. CCF Clinical Administrators are expected to lead and participate within groups
with exposure to high profile projects covering a myriad of strategic and operational issues
affecting the system.
Financial
The Cleveland Clinic Foundation's financial department is responsible for ensuring that
insurance and bill processing takes place in a way that is timely, accurate and patient-friendly.
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MGT 660
9/11/2013 – Module 8 Homework
Financial advisors are assigned to CCF facilities on the basis of patient volume and the relative
need for financial assistance. Because the common misconception among hospital systems
nationwide has been that because the responsibilities associated with finance-related positions
occur primarily behind closed doors finance coordinators do not need the same level of
interpersonal communication skills, CCF has taken steps to place more attention on
communication and behavior during training as well as focusing more on communication skills
throughout the hiring process. Furthermore, in light of the passage of the Affordable Care Act
the Cleveland Clinic Foundation has increased the number of financial coordinator positions
significantly in anticipation of new necessary support. CCF is above all committed to
friendliness, accuracy, fairness and transparency throughout the billing process on behalf of our
caregivers.
Strategy
The Cleveland Clinic Foundation's strategy, structure and systems have been designed to
remain constant in their application throughout all CCF facilities including those located abroad.
The organization's overlying strategy is to grow the scale of the organization to treat a greater
number of patients; in support of that strategy, the organization employs its own in-house team
of computer technicians who have implemented the reknowned EPIC computer system for
healthcare services. EPIC is a medical database designed to streamline a wide range of tasks
including scheduling appointments, checking patients in, documenting important patient and
medical information, sending and receiving messages. Another new development in health
technology is the HealthSpot, which was created by a third-party company funded by CCF;
HealthSpot is an interactive patient room which pairs a patient and nurse with a Doctor remotely
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from a Cleveland Clinic satellite facility. The HealthSpot station is equipped with special sensors
within normal office scopes allowing the Doctor on his or her computer to diagnose symptoms
and prescribe treatment. Within the health service industry, many executives believe that the
HealthSpot will find its way onto nearly every college campus in America over the next five to
ten years.
Both EPIC and HealthSpot represent examples of the strategy pursued by the Cleveland
Clinic Foundation to connect, educate and empower larger numbers of people to meaningfully
improve their health more than ever before thought possible.
Operational Plan
The Cleveland Clinic Foundation’s purchasing plan is focused on quality, cost and timing. In
order to balance these three criteria with the mission of innovation and research,CCF’s supply chain
management department consists of three key groups – sourcing, distribution and fulfillment. The
sourcing group manages the portfolio of suppliers, while the distribution and fulfillment group ensures
that supply needs are met throughout the organization (Mrosko, 2010). The vision of the Cleveland Clinic
Foundation is striving to be the global leader in healthcare supply chain through collaboration and
innovation; the mission of the organization’s supply chain management team is empowering caregivers to
deliver world class healthcare,research and innovation focused on “Patients First” by providing optimal
resources at the best value (Cleveland Clinic, 2013).
The Cleveland Clinic Foundation’s supply chain is comprised of 35 main business partners; these
primary organizations are in most cases large,reliable suppliers such as Microsoft and Apple who are
capable of providing the supplies necessary to meet the organization’s clinical, clerical and networking
demands. In addition to its main business partners, the Cleveland Clinic Foundation is also supported by
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hundreds of collaborating suppliers who specialize in medical technology ranging from drug makers to
scanning device manufacturers and organizations which specialize in new medical concepts. Nearly all of
the Cleveland Clinic Foundation’s smaller providers receive direct feedback from CCF clinical providers
in a strategic fashion to assist in the development of new medical devices optimized to provide better
quality results. The Cleveland Clinic Foundation should pursue more measures to ensure that it is a lean
organization by capitalizing further on cost efficiencies stemming from the large, well-organized and
high-functioning organizational profile that CCF represents.
The Cleveland Clinic Foundation creates added value through a Supply Chain Management
department empowered to access and act on the organization’s most critical and up-to-date data; CCF
must also continue to capitalize on its role as an industry-leader in healthcare by achieving better
purchasing terms from long-term technology hardware providers. The Cleveland Clinic Foundation
currently enjoys a well-developed purchasing agreement standard included in all new purchasing
contracts attached to purchasing agreements. Included in the agreement are issues which cover the
expectations of CCF regarding the on-time and quality delivery and product support of ordered supplies;
potential supplier penalties for contractualnon-fulfillment, which are intended to assist in heading off all
potential litigation scenarios, are also covered. In terms of supply chain management, logistics and
purchasing agreements,the Cleveland Clinic Foundation is committed to continually enhancing the
organization’s ability to reliably meet our patient’s expected healthcare demands.
Financial Plan
Of the three main operating branches of the Cleveland Clinic Foundation, the finance
department spends the least amount of time on patient-provider interaction and in many cases
carries the greatest influence on the patients decision whether or not to pursue clinical care. The
Cleveland Clinic Foundation houses a diversified and comprehensive financial organization;
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CCF financial departments include academic affairs, accounts payable & travel, corporate
accounting, decision support services & business intelligence, enterprise risk management,
financial planning & budgeting, fiscal services & chargemaster, investment office, market and
network services, payroll, revenue cycle management, revenue & reimbursement and taxation &
compliance.
The financial planning and budgeting team is responsible for providing leadership and
management with financial forecasting tools and information, and administering processes that
support executive decision making around resource allocation; Functional areas included within
Financial Planning are Budgeting, Long Range Forecasting, Capital Planning and Analysis,
Administrative Area Finance support, Financial Performance Improvement Measurement, and
Emerging Businesses Financial Analytics (Cleveland Clinic, 2013).
The enterprise risk management office procures and manages all lines of insurance for
the Cleveland Clinic and Regional Hospitals. The enterprise risk management office is striving to
continually reduce the overall cost of risk by providing the broadest, most encompassing
insurance coverage available and implementing long term, strategic risk management practices.
The mission of the Tax Department is to provide “best in class” tax planning, tax
compliance, and tax administration services for the Cleveland Clinic Health System in
accordance with the organization’s charitable mission and goals. The primary objective of the tax
function is to preserve and protect the tax exempt status of Cleveland Clinic and its affiliates.
The strategic advantages enjoyed by the organization are derived specifically from the
all-encompassing nature of the information used as well consideration of both immediate and
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long-term areas of concern; critical items such as department by department operating
statements, which provide a moving picture of revenues, expenses and profits, allow CCF to
measure and respond to emerging trends early. The Cleveland Clinic Foundation also focuses
closely on financial performance management; CCF works constantly to eliminate financial
variances between budgeted and actual spending amounts on all line items (Cleveland Clinic,
2013).
As a whole, the Cleveland Clinic Foundation uses financial information in order to create
a model that accounts for both short and long-run financial solutions. With a financial team in
place to assess credit risk, accounting, insurance coverage and empowered to make budgeting,
forecasting, capital planning and analysis decisions, the Cleveland Clinic is able to function more
efficiently than nearly any other health system. By capitalizing on synergies between CCF and
our partner health systems, the organization is able to expand its reach and ability to generate
greater revenues in a way that is cost efficient for the hospital; by combining networks
and clinical resources rather than through cash and debt, the Cleveland Clinic Foundation is able
to effectively balance short-term issues with long-term plans in a way which reduces outstanding
debt to less than four percent of total expenses. As a mature, profitable hospital system
benefiting from significant voluntary financial contributions within the community, the
Cleveland Clinic is able to focus on strategic and organizational culture initiatives which are
propelling the organization forward.
Critical Risk Assessment and Milestones Schedule
The Cleveland Clinic Foundation has traditionally undergone alternating periods of
technological improvements and patient capacity expansion. On August 22, 2013, Nashville-
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MGT 660
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based Community Health Systems is partnering with the Cleveland Clinic to buy up the majority
of Akron General Health System in Summit County, marking the latest in a wave of hospital
mergers and acquisitions that are changing the healthcare landscape (Zeltner, 2013).
Presently, the Cleveland Clinic Foundation operates in Cleveland, Miami, Las Vegas,
Toronto and Abu Dhabi. Cleveland Clinic CEO and M.D, Dr. Delos “Toby” Cosgrove has also
indicated plans to expand into other markets abroad including Austria and Singapore, stating that
the core values of a good hospital system are transferable globally (Hesselschwerdt, 2011). For
strategic reasons, the Cleveland Clinic should also consider expansion within Canada, India and
China. The benefits of expansion in Canada are exposure to a greater number of patients - the
majority of whom are in great demand of specialized care due to Canada's socialized medical
system - and access to a cheaper and more comprehensive prescription drug network. India and
China allow the Cleveland Clinic Foundation to conduct research within the world's epicenter
for contagious diseases and are also growing sources of new physicians and the primary source
of bilingual doctors for the organization.
At a net worth of over $10 billion and annual operating income of nearly $685 million in
2012, the Cleveland Clinic is enjoying near record growth in income and investment; investment
into Canada could be efficiently implemented as soon as 2014 with the focus being developing a
more efficient and cost effective distribution network for prescription drugs to Cleveland Clinic
facilities (Cleveland Clinic Foundation, 2013). Investment into Asia in locations such as India
and China should begin planning with a tentative timetable for building to begin in 2015; these
multi-year projects each would project to over $1 billion. Critical factors in the development
phase for expansion in China is the expectation for government scrutiny of a foreign organization
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which demand an alternative timetable; this alternative plan imagines a redistribution of
organizational resources away from India and into China to force a faster resolution to
implementation challenges in CCF’s first move into Asia.
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MGT 660
9/11/2013 – Module 8 Homework
References
Porter, M. E. (2008). THE FIVE COMPETITIVE FORCES THAT SHAPE STRATEGY.
Harvard Business Review, 86(1), 78-93.
Berryman, S. N., Palmer, S. P., Kohl, J. E., & Parham, J. S. (2013). Medical Home Model of
Patient-Centered Health Care. MEDSURG Nursing, 22(3), 166-196.
Mahmud, A., Olander, E., Eriksén, S., & Haglund, B. A. (2013). Health communication in
primary health care - A case study of ICT development for health promotion. BMC Medical
Informatics & Decision Making, 13(1), 1-15. doi:10.1186/1472-6947-13-17
McAlearney, A. (2008). Using Leadership Development Programs to Improve Quality and
Efficiency in Healthcare. Journal Of Healthcare Management, 53(5), 319-331.
Cleveland Clinic Foundation (2013). U.S. News Rankings.
www.my.clevelandclinic.org/default.aspx
Ulrich, D., & Smallwood, N. (2004). Capitalizing on Capabilities. Harvard Business Review,
82(6), 119-127.
Supplier Relationship Management Handbook (2013). Cleveland Clinic Foundation. Retrieved
from: http://my.clevelandclinic.org/Documents/supply-chain-management/supplier-relationship-
management-handbook-101310.pdf
Mrosko, Terri. Cleveland Plain Dealer (2010). “Hospital Supply Chain Management is a Fast-
Paced Career”. Retrieved from:
