Cleveland Clinic CEO and President Tom Mihaljevic, M.D., is promising his team a year of workforce development, physical security initiatives and sustainable growth amid an industry rife with rising costs and service shutdowns.
In his annual State of the Clinic address, released Wednesday, the executive shared that the Ohio-based nonprofit had exceeded its revenue expectations with more than $14 billion across 2024. It also logged an operating margin of 0.4%—a bump over 2022’s -1.6% but still lower than the system would like in the face of 2023’s record 14 million patient encounters.
“These results would assure a healthy financial foundation for Cleveland Clinic, but all hospitals, including us, are challenged by inflation," Mihaljevic said in the address to his employees. “The rising cost of wages, supplies and pharmaceuticals is greatly outpacing nominal increases in reimbursement.”
Whereas service closures have become familiar across other provider organizations struggling to make ends meet, Mihaljevic stressed that Cleveland Clinic “continue[s] to offer services that our most vulnerable patients depend on, including pediatrics and mental health.” He also signaled that the system has no plans to slow down on community- and social determinant of health-focused initiatives, and highlighted 2023 efforts related to home de-leading and food security.
However, similar to the previous year, the CEO encouraged his staff to think about how the system can find savings and “use fewer resources while touching more lives,” as was the case with an in-home care model designed by Florida-based employees.
“’Hospital Care At Home’ is a wonderful example of creating the future of patient care,” he said of the program. “It is accessible, affordable and digital, taking place in the right setting for the best outcome.”
The focus on Cleveland Clinic’s 81,000-strong workforce persisted through the presentation, with Mihaljevic citing employee concerns about staffing shortages, stress and “perceptions of safety.”
He said that the system has made major investments into recruitment and retention over the last two years and said that Cleveland Clinic’s current benefits package “continues to be one of the most generous in healthcare.”
Turnover at Cleveland Clinic is 4% lower than the rest of the industry, he said, and four out of five leadership positions are filled from within. The system has removed numerous unnecessary degree requirements from certain positions to encourage advancement and, to help fill vacancies, has an apprenticeship program that onboards high school graduates straight into roles within pharmacy, epilepsy, sleep and ophthalmology departments, he said.
As for the “silent epidemic” of violence against healthcare workers, the CEO said that the system is focused on more screening infrastructure and training employees to address the 3,800 incidents of verbal and physical violence reported by staff across 2023.
“Violence will never be accepted as a part of our job,” he said. “Cleveland Clinic continues to enhance our police and security presence. We have installed magnetometers in every emergency department and confiscated 30,000 weapons brought in by patients and visitors last year. We’re training caregivers to deescalate difficult situations with patients and families.”
Today, Cleveland Clinic has nearly 300 different care locations spread across three continents. Mihaljevic’s presentation touted new facility openings in the U.K., Middle East and U.S. alike. The organization’s patient services has grown 55% since 2017, yet it still has an “ethical imperative” to keep growing in order to serve more patients, the CEO told employees.
“As we begin 2024, every aspect of our mission is thriving, from clinical care to research and education," he said. “Our caregiver family is engaged. We have clear priorities for serving our communities and we are performing well in a demanding financial environment.”