Bull: First off, Dr. Cosgrove, how has Cleveland Clinic fared in the past five years, including the recession period?
Cosgrove: Well we’ve seen a reduction in the number of patients we’ve seen, as have hospitals across the country, but nonetheless we’ve been on…ah…financially fine, reducing our costs.
Bull: And what’s the patient decline been like?
Cosgrove: The patient decline has been a couple percent over the years, but that’s true across the entire country.
Bull: Have we seen any reductions in staff here or any of the other campuses for Cleveland Clinic?
Cosgrove: Our total number of staff and full time employees have remained stable over this period of time.
Bull: There have been other industries, which have seen reductions in workforce, hours, what have you, but it sounds like Cleveland Clinic’s stayed pretty healthy….so Dr. Cosgrove, is it safe to say the health industry profession itself is fairly recession proof?
Cosgrove: Well, since 2000, the health care industry has been the only industry that’s continuously grown jobs, so it has been a growth industry over time for the last decade.
Bull: Can you characterize for me some of that growth as far as Cleveland Clinic is concerned?
Cosgrove: We have about 43,000 employees across the globe which has been going up over the last decade.
Bull: And what are your other campuses besides the one here in Cleveland?
Cosgrove: Well, we have nine hospitals here in Cleveland, 17 family health centers, we also have a hospital in Ft. Lauderdale, outpatient facilities in Palm Beach, another one in Toronto, Canada, a place in Las Vegas, and a very big facility in Abu Dhabi.
Bull: Give me please,doctor, an understanding of how much medical capacity has grown during the recession here in Northeast Ohio, and if you feel that that can continue.
Cosgrove: Well, we have not grown particularly in Northeast Ohio, we’ve grown in lots of other places. But the total number of inpatients across Northeast Ohio is stable and falling down slightly, not just for us but for all of the hospital industry. So the growth has not been huge in Northeast Ohio. It’s been in many other places.
Bull: Any particular reason why that is?
Cosgrove: Well, we see the population diminishing in Northeast Ohio as one of the main reasons.
Bull: And as for the outside campuses?
Cosgrove: Well, we’ve certainly grown a great deal in Florida and we’ve grown a great deal in Las Vegas, and certainly a huge growth in Abu Dhabi.
Bull: And what’s fueling that growth?
Cosgrove: Well, demand for our services. We’ve become a nationally recognized organization, and lots of placers are interested in having an affiliation with us for the quality and reputation that we bring.
Bull: I find it interesting that we have campuses for Cleveland Clinic all across the region, and across the world… and think in many ways logically perhaps it’d would have drawn from local hospitals and services, but obviously Cleveland Clinics has a global appeal to these sites overseas and in places like Canada. Can you elaborate on what that appeal is?
Cosgrove: Well, we’ve been ranked as one of the top hospitals in the country now for more than a decade, our cardiac surgical services have been ranked number 1 for 17 years consecutively, and we’ve been in the top five hospitals in the United States now for more than a decade. So we’re recognized as an international player with an international reputation.
Bull: And I think there’s an assumption that the health care industry has been a major economic driver through the past decade, and even through the recession, being one of the more resilient industries. Can we get away with saying that? Is that true?
Cosgrove: Well, absolutely, I think it’s true. Both for growth and people are going to continue to get sick, and as the population ages there’s going to be more desire to have health care services. We’re now seeing (huge boatloads?) of people coming into health care, requiring health care. As the baby boomers all reach 65 and beyond, we’re now going to have 55 million people in the United States that are greater than 65 years of age, and there’ll be more health care required for those people.
Bull: Since 2007, how has Cleveland Clinic done? This is the 5-year period including when the recession actually hit.
Cosgrove: Well, we’ve been stable from financial standpoint. I think we’ve seen – as all hospitals have -- a small diminution in the number of patients admitted to the hospital, but we have controlled our costs appropriately.
Bull: If you can give me a specific example, please.
Cosgrove: We’ll we’ve brang(?) in over $100 million out of purchasing for example, and we’re being able to go through procedure by procedure, and take costs out. We’ve been able to reduce the cost of a say, prosetectomy by 23 percent over the last couple years, simply by looking at all the steps along the way, and we’ve taken costs out of energy consumption, we’ve taken costs out of the purchasing, we’ve taken costs out of all of our suppliers as we have about a 2 billion dollar purchase which requires constant monitoring to reduce our costs for that.
Bull: What do you see happening in the next 5-10 years for Cleveland Clinic?
Cosgrove: Well, I think because of our national and international reputation, we’re going to have opportunities all over the place which we’re seeing right now. I think we’re going to have future expansion and growth of our organization….probably most of it outside Northeast Ohio.
Bull: Where do you see some of that future expansion taking place?
Cosgrove: Well, we’ve had inquiries from as far away as east coast and west coast and lots of places in between. And right now we have no commitments in any particular direction, but we’re certainly exploring lots of possibilities.
Bull: Can this expansion continue indefinitely?
Cosgrove: Well, what I think what you’re going to see in health care is a major consolidation of health care providers and probably payers as well, and that is because we need to do like what most industries have begun, to control our expenses by bringing efficiencies that are associated with size, together. And I think this is a big opportunity and I think you’re going to see some large systems begin to emerge across the United States.
Bull: Can you elaborate for me please, some of the consolidation that we’ve seen taking place already?
Cosgrove: Well, the consolidation that you’ve seen for example with the for-profits, there are Hospital Corporation of America has 160 hospitals across the United States. Tenet has 60-70. The Catholics (System) have over 70 hospitals. So you’re seeing consolidation of services right now. I think 60 percent of hospitals in the United States right now are part of a system, and I think that’s going to become more and more, and systems are starting to talk to systems about consolidating, and so you’re seeing same thing happening here that you saw happening in grocery stores, the same thing you saw with bookstores and banks, and you’re seeing major consolidation because you get the efficiency that way.
Bull: A large portion of any expansion has to do with attracting business. That’s a bit of a challenge here in Northeast Ohio because we’re still dealing with the recession’s effects and we’ve lost population here in the region. So for at least the immediate headquarters for Cleveland Clinic here, how do you address those challenges?
Cosgrove: Well, we’re always looking for ways to continue to grow in our local market. I think the problem as you’ve pointed out, is the fact that the population is not growing here. We are however, growing in areas that are just outside hospital admissions, we’re seeing more and more patients in outpatients, and we’re building more outpatient facilities. And hospital care is…. health care I should say, is moving increasingly from hospital to outpatient and ultimately to home care, and that’s where the big growth is right now. We’re also trying to improve our access. For example, we have same day appointments and you can call up and get to see a doctor on the same day, if you like. And we saw 1-million same day appointments last year, so 20 percent of our appointments of the 5 million that we saw, were done the same day as the patient wanted to be seen.
Bull: That’s an extraordinarily large number.
Cosgrove: That is a big number, but we’re a pretty big organization right now.
Bull: So Dr. Cosgrove, why does Cleveland Clinics need to keep expanding and growing? Why not stay at the current level?
Cosgrove: Well, our time you know, that most organizations that are successful over a long period of time, grow. And we fully understand without growth, generally there’s not as many opportunities. With growth comes skill, comes opportunity, and comes people. And we think all of those things are very good for us and for the Cleveland community.
Bull: Do you have any sense as to what the odds may be that other big regional players like University Hospitals and Metro Health may continue to coordinate their planning…is this more a regional cooperative event or a competitive event?
Cosgrove: Well, we’ve certainly have cooperated on several things, MetroHealth and ourselves cooperated on a trauma center and that has been very successful in improving quality of care for patients with trauma, and it’s been a very nice relationship with Metro. And we collaborate with Casson, and University Hospital in supporting things like bio enterprise. Which has been very good for Northeast Ohio.
Bull: Do you see bio enterprise as the new flourishing field, or are there other ones?
Cosgrove: Well, bio enterprise is one of those…it’s been an incubator for new companies, and we’ve got a lot of companies that grew out of bio enterprise. We think it’s terrific for Northeast Ohio. We similarly have spun off some 45 companies ourselves, which have been good for employment and to bring investments in Northeast Ohio. So we’re very anxious to see Northeast Ohio thrive economically, that’s one of the reasons we pushed big for the medical mart, which is a big opportunity for us.
Bull: What kind of business do you see or possibilities do you see coming out of the Medical Mart when it finally opens?
Cosgrove: Well, I think that the Medical Mart can bring a lot of people to town, and conventions, medical individuals, to town, and medical related industries to town. We see, I’ve talked to major suppliers about the potential for permanent exhibits here. And I think this is one of those things that has been successful all over the country, furniture marts, jewelry marts, toy marts, merchandise marts, and I think this is one that’s never been done before and it’ll be a big opportunity to Cleveland.
Bull: How will Cleveland Clinics be involved?
Cosgrove: Well, we’re very supportive and we’re trying to help them attract individuals to the mart, and take some of our meetings there, to the…convention center, and do everything we can to support the success of the Medical Mart.
Bull: When you say “individuals”, what do you mean?
Cosgrove: Those would be individual suppliers that will bring their supplies there and we will encourage meetings to come there and many of our doctors sit on boards, of these major medical institutions and organizations, and we’ll try to encourage them to come and have their meetings here.
Bull: Dr. Cosgrove, some have asked about the expansions and are concerned...about over capacity?
Cosgrove: Well, I think there’s certainly an overcapacity of hospital beds across the country. And the number of hospital beds has been decreasing over the country. In fact in the last 20 years, there has been a reduction in 200,000 beds in the United States. We’re over capacity in beds in Cleveland right now, the average occupancy of a hospital here is 68 percent. It should be more like 85 percent to be at maximum efficiency, so we’ve too many beds here. No question about that.
Bull: Any solution you can see to help with that problem?
Cosgrove: I think we’ll see a consolidation of services and hospitals over time. And we’ve certainly seen that over the last 50 years in Cleveland. We’ve got about a third of the number of the hospitals we used to have forty years ago in Cleveland.
Bull: Any partners or relationships you’re working on to facilitate consolidation?
Cosgrove: We’re always looking for more opportunities to be more efficient.
Bull: No specific partners to mention at this time?
Cosgrove: None at this time.
Bull: What future expansions are or may be in the works for Cleveland Clinic?
Cosgrove: Well, as far as expansion is concerned, we have just opened as you know, three new outpatient facilities in Twinsburg, Avon, and in Huron. We’ve just added a brand new facility for laboratory medicine; we’ve built a $170 million data center, here in Cleveland to support our facilities all over the country. We’ll be expanding shortly our cancer center here, that has outgrown its current facility, and we’ll have a new facility for our neurological institute in the near future.
Bull: Anything you can tell me about the number of jobs created by these expansions?
Cosgrove: I can’t give you estimate right now, I can’t tell you right off the bat.
Bull: Anything else to offer?
Cosgrove: Well, we continue to hire. Recently we hired in two days, 450 nurses which is big addition to our staff, to meet the needs of our hospitals across the organization. So we continue to be big supplier of jobs across Northeast Ohio. And we think that we have three major things we do. We supply great health, we supply great jobs, and we encourage education in any way we can.
Bull: Dr. Cosgrove, thank you very much for your time.
Cosgrove: My pleasure.