Cleveland Clinic: The Medicine We All Need

The Cleveland Clinic is doing the impossible in US healthcare, consistently providing world-class quality medical care while lowering costs. Their model will soon affect how you get your care wherever you are.

The Cleveland Clinic has once again ranked as the best in the nation, ranked no. 1 in US News and World Report for the 21st consecutive year[1]. The hospital’s strategic vision is to “be the world’s leader in patient experience, clinical outcomes, research, and education” by focusing on quality, innovation, teamwork, service, integrity, and compassion[2]. The hospital is laser-focus on controlling costs and innovating to drive better outcomes in the face of increased chronic diseases, an aging US population, and other systemic forces[3]. Despite these challenges, The Cleveland Clinic is effective in achieving its strategy largely through its world-class operations.

Cleveland Clinic focuses on three pillars of operations to drive its strategy by achieving operational success: people, systems, and processes. First, employees (e.g., Doctors, nurses) are provided with incentives to provide quality-care, constant innovation through research and treatment, and high-value patient-oriented thinking. Doctors are on one-year contracts with annual reviews; there are “no financial incentives to do more or less than what is needed”[4]. Thus, Doctors provide the right amount of care, unlike hospital systems where doctors are compensated for each service they provide (i.e. Fee-for-service).

Second, the hospital system is a leader in sharing data across its entire system via electronic systems and programs around utilizing the technology. The hospital invests heavily into systems that allows for universal data sharing – every division of the system publishes its patient outcomes and costs of performing a procedure.  The outcome has been reduced costs through reductions in variability and improved outcomes through data sharing. In one example, “analyzing cost variability of prostatectomies at different hospitals enabled the health system to become more efficient and reduce procedure costs by 25%”3.

Finally, The Cleveland Clinic has established processes to drive coordinated patient care and a collaborative, team-oriented approach. Cleveland Clinic was one of the first hospitals to offer care coordination in a structured manner – the “Patient Service Navigator”[5]. These navigators help the patient navigate the healthcare system and collaborate with the healthcare to provide necessary communication between patient and health teams[6]. The initiative has led to higher quality for patients as patients receive holistic care, more collaboration across health care team (e.g., doctors, nurses) who then know everything about the patient, and lower costs as fewer diagnoses are missed, problems caught earlier, and costly complications (which drive the bulk of healthcare spend) are prevented.

Cleveland Clinic aligns each of the people, systems, and process components of its operations to its strategy. Thus, the hospital is able to drive world-class patient experience, consistently outperform clinical outcome benchmarks, drive global healthcare innovation through research, and teach the next generation of the world’s doctors. Cleveland Clinic’s operational effectiveness will allow it to serve as a global healthcare leader for decades to come.









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Student comments on Cleveland Clinic: The Medicine We All Need

  1. Interesting model – I’d be interested to find out how this has affected the doctors in this system. I wonder if they’re compensated less as a result, or if they’re getting better working hours?

  2. Nate,

    What a great example. Cleveland Clinic is definitely the standard these days, not only in its vision but also execution. While I agree that the business and operating models align well, I wonder whether external forces such as the overall shift to managed care may lead Cleveland Clinic to change its strategy going forward. Does this alter the way doctors think about the “right amount of care” to provide or are they so mission-driven (like in the first day case with Dr. Shetty at Narayana) that they would put this reputation above other competing incentives? Also, I was surprised to read that the doctors (who probably are the key to this human capital intensive model) are on one-year contracts. While I agree that this provides Cleveland Clinic the flexibility to immediately make changes should a doctor not perform to standard, I wonder how this impacts the turnover at the Clinic. For a place that consistently has high performance, I’d imagine that average doctor tenure is high, which then leads to questions on succession and sustainability when the current group of doctors retire.


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