Peter K. Kaiser, MD
There is nothing so useless as doing efficiently that which should not be done at all
— Peter F. Drucker
The Cleveland Clinic’s Chief Executive Officer, Dr. Toby Cosgrove, recently announced “to prepare for healthcare reform, Cleveland Clinic is transforming the way care is delivered to patients. Over the past several years, we have had an ongoing focus on driving efficiencies, lowering costs, reducing duplication in services and enhancing quality to make healthcare affordable to patients. Although we have made progress, we need to further reduce costs to the organization by $330 million in 2014.”
Cuts will be made in all aspects of the budget; however, because personnel represent approximately 60% of the Clinic’s budget, 3,000 of the 42,000 workers will be offered “early retirement.” Unlike sequestration, the cuts will be performed intelligently to avoid compromising patient care, but it does mean providing the same patient care with a lot less.
The 7% drop in work force comes at a time when millions of previously uninsured are being added to Medicaid, baby boomers are moving into Medicare at accelerating rates, sequestration has cut Medicare by 2%, Health Insurance Exchanges are “pricelining” hospitals with ridiculously low rates, and even the life blood of hospitals, third-party payers, are reducing reimbursement to historically low rates.
And don’t think this is not going to happen around you. Indiana University Health System laid off about 900 workers to start to trim its budget by $1 billion over five years. Vanderbilt plans to eliminate 1,000 jobs this year to reduce operating costs 8% a year.
Now recall, that this is happening at the same Cleveland Clinic that both Mitt Romney and President Obama praised for efficiency in medical care in the Presidential debate — a beacon in our nation’s healthcare system that others should follow.
It is true that the Cleveland Clinic runs more efficiently than almost any other hospital system in the United States. So if the Cleveland Clinic needs to cut back due to the Affordable Care Act, how are smaller hospitals or even private practices going to survive? It’s a good question with no easy answer.
The next few years will be very interesting in many ways. Most of us work closely with only a few technicians, photographers, and front desk staff. In these difficult times, it is the bond of our team that will allow us to continue to provide excellent care. The loyalty to each other is what makes the system work.
I am sure most of you can say the same for your teams. We will need to see more patients for less money, and provide better quality care. Fasten your seat belts, it’s going to be a bumpy ride.