Cleveland Clinic Lost Operating Income In 2016

CLEVELAND, OH - Cleveland Clinic CEO Toby Cosgrove delivered the State of the Clinic address on Wednesday. The hospital system had a down year compared to its record setting 2015, when it recorded $481 million in operating income, according to a report released last year. The Clinic is also Ohio's largest employer, with more than 48,000 employees. The hospital system employs 51,847 worldwide.

In 2016, the hospital system saw its operating income drop to $243 million. Part of the reason for the drop is the system's decline in inpatient hospital stays, which dropped to 59,760 in 2016. The Clinic's Main Campus also saw less international patients last year.

Cosgrove added that a cost-savings initiative was rolled out in 2016 and helped save the hospital system $634 million. He said without that initiative, the Clinic's operating income would have dropped further to $122 million.

Despite the challenges, Cosgrove characterized the Clinic's year as "very successful" while noting the hospital system faced challenges that were "unprecedented in their size, speed, and scope." He noted the Clinic was ranked the nation's second best hospital system by US News & World Report, behind only the Mayo Clinic.

Those challenges include rising pharmaceutical costs, an aging population that is increasingly relying on government insurance rather than private insurance, more stringent hospital reporting measurements, and changes in how hospitals are paid.

Last year, the Clinic expanded its presence in the region with a new hospital in Avon, an Express Care in downtown Cleveland and five other locations (including Solon and Mentor), the Taussig Cancer Center, and a 276-room Holiday Inn. That led to the Clinic seeing an increase in patients visiting the hospital system.

The Express Cares were visited 133,000 times in 2016, up 76 percent from 2015. Same-day appointments, virtual visits, and shared medical appointments all saw growth last year.

The most prominent place of growth for the Clinic was outpatient visits. The number of patients who underwent outpatient procedures was up 7 percent from 2015 to 7.1 million, including 128,000 new patients (up 2 percent).

Among the Clinic's future projects is the Lakewood Family Health Center (which replaces Lakewood Hospital), and Cleveland Clinic Rehabilitation Hospitals in Beachwood and Bath.

Photo from the Cleveland Clinic