The Cleveland Clinic predicts an operating loss of more than $200 million for 2022, its president and CEO Dr Tom Mihaljevic shared during his annual State of the Clinic keynote.
In his speech on Wednesday, January 18, Mihaljevic gave an overview of the Clinic’s achievements over the past year, including research, development and patient care.
“In recent years, when I consider our track record, we have been impacted by the COVID-19 outbreak,” said Mihaljevic, who is also Chairman and CEO Morton L. Mandel at the Cleveland Clinic. -19 during winter. “It’s comforting to start a new year with a healthier foundation.”
Looking beyond the pandemic, he said a number of trends point to disruptions in healthcare as hospitals suffer financial losses, the health equity gap is at risk widening, staff medical burnout, early retirement or career leave, and the American patient and health experience has been diminished.
“Today’s challenges are tomorrow’s opportunities to lead,” said Mihaljevic, adding that the system looks at these through a “framework of care” — taking care of the patient, the person, and the patient. care, community and organization.
A projected operating loss of more than $200 million comes after the Clinic’s strongest fiscal year in 2021, when the Clinic reported operating income of $746 million.
“During the pandemic, healthcare needs to suspend services,” Mihaljevic said in her virtual address in front of the Clinic’s 77,000 caregivers worldwide. “As services resume, there aren’t enough caregivers, leading to higher wages and contracted labor. Prices of pharmaceuticals and supplies are rising along with inflation.”
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To manage costs, the Clinic is reducing spending in certain areas, pausing some administrative hiring and reducing discretionary expenses. It has also launched a plan to serve more patients more efficiently.
“I have full confidence that we will get through this moment even stronger,” he said. “As other organizations struggle to expand, we are growing for the right reasons.”
The clinic is growing in three ways: organically in existing facilities, locations and markets; through mergers and acquisitions; and with digital tools such as virtual visits.
Outside of Northeast Ohio, the new Cleveland Clinic Abu Dhabi cancer center has opened; the fifth floor of the Clinic’s Weston Hospital in Florida is serving patients; and Cleveland Clinic London, opening in March 2022, are serving more patients each month, with a second outpatient facility opening in September.
Mihaljevic said the Clinic had planned capital expenditures of $1.3 billion by 2022, but due to supply chain constraints and labor challenges, the total would come to nearly $800 million later. when the books were closed, Mihaljevic said.
Just like other industries, “we are completely dependent on our ability to get supplies and our ability to hire people to do capital projects,” he said, “but large capital projects of Ours in Cleveland and Northeast Ohio are well underway.”
On the main campus, an expansion of the Cole Eye Institute is under construction, and the Clinic plans to break ground on a new building for the Institute of Neurology in May.
Cleveland Clinic Mentor is scheduled to open in July. Also this year, the Clinic is expected to open a family wellness center in Middleburg Heights.
At Fairview Hospital, a master plan is being designed to enhance care for patients and carers.
The clinic also plans to begin construction in late spring or early summer on new research buildings on its main campus as part of the Cleveland Innovation District, a multi-institutional partnership aimed at creating created 20,000 jobs and promoted research in the city over a decade.
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Annually, the Cleveland Clinic reinvests $450 million in research and education, and its 2022 research revenue is $285 million.
Mihaljevic mentioned several of the Clinic’s ongoing research efforts, including the Cleveland Innovation District and the Discovery Accelerator, which aim to advance technology and healthcare; Cleveland Clinic brain studies, with the goal of uncovering the origins of brain diseases before symptoms appear; The Global Center for Pathogens & Human Health, which is developing vaccines and studying the impact of the virus; and partnering with IBM to bring artificial intelligence and the first quantum computer to be used in medicine. The clinic expects the IBM Quantum Server to be completed by 2023.
The pandemic’s strain on healthcare workers continues as many grapple with burnout, early retirement or career transitions. Mihaljevic said the Clinic aims to offer “the best package of benefits in healthcare” and is adding innovative incentives such as nurse referral bonuses to attract new caregivers. and reward the employees that the Clinic has.
Last year, the Clinic hired more than 1,600 new care workers living in the city of Cleveland — the most in a year. Mihaljevic said this is part of the Clinic’s commitment to the community and aspires to have a workforce as diverse as the patients the Clinic serves.
Its other commitments to the community last year included donating more than $50 million to remove lead paint from Cleveland homes; invest in safe, affordable rental units in the Fairfax neighborhood; address food insecurity in partnership with other community organizations; and work to address infant mortality and ensure African-American infants and their mothers have an equal chance at a healthy life.
“We have been able to fulfill our mission for over 100 years, despite wars, economic downturns, pandemics and the catastrophic fire of 1929 on our campus,” he said. “Cleveland Clinic perseveres in good times as well as bad. We stay true to our goals, even in the hardest times, and have never compromised on our care.”
This story first appeared in Crain’s Cleveland Business.
