Gerald McGillMGT 6609/11/2013 – Module 8 Homework

The mission set forth is to improve the size, reach, patient capacity, range of health services

and quality of care being provided by the Cleveland Clinic over the next one, five and ten years.

Although the Cleveland Clinic Foundation is home to the best cardiology department to date, the

mission is to be among the top five in other complementing departments. In order for the

organization to transcend healthcare, it must develop a greater global presence and a name

synonymous with quality care. Corresponding with the progress made in clinical departments,

the primary mission for achieving quality care among CCF's clerical staff will be two-fold:

1. CCF is to receive the highest system-wide service scores of any health network according

to national standardized HCAPHS and CGCAPHS scores, which measure patient

satisfaction among in-patient and out-patient facilities and provide the basis for federal

subsidies and reimbursements.

2. All CCF clerical staff are to receive cross-training in order to achieve proficiency with

Epic operating system and participate in skill and personal development courses.

The critical impact of the skill and personal development courses will be achieved due to

the appeal for clerical staff stemming from the dual-benefit of building tools that will

positively impact our caregivers both at work and in their own spare time.

The vision is a Cleveland Clinic Foundation that is the best not just in cardiology but in many

other key medical fields. The proposed clerical model in which the level of care rises over time

to create synergy which spans across department lines is entirely new in the medical field and

will be unique to the Cleveland Clinic. The vision of better clinical care combined with the best

service staff is not a new concept to hospitals however the Cleveland Clinic Foundation is

uniquely well-positioned to achieve the vision being described. CCF is a source of pride for

Gerald McGillMGT 6609/11/2013 – Module 8 Homeworkmany Cleveland-area residents who are both employees and patients; the organization enjoys a

combination of the best in clinical care alongside caregiver values and an enthusiastic sense of

community within the health network. Furthermore, as a well-endowed organization with

investment resources, the Cleveland Clinic is poised to expand its network into new global

regions by reinforcing the adage that the qualities associated with good healthcare are

interchangeable among all cultures. The goal is to garner tangible results from the intangible

behaviors exhibited by caregivers on a daily basis.

In order to achieve the vision, the strategy is to create methods and solutions that are all-

encompassing; the solutions will consider both internal factors and external factors and

will examine existing Cleveland Clinic clerical & clinical data. The most critical questions that

must be answered in order for successful strategy development are:

1. What internal improvements can be made

2. What strategic, global, technological and operational areas provide the Cleveland Clinic

with the most potential for new growth, development and synergy.

3. What present and future anticipated environmental factors are likely to be the greatest

drivers of future healthcare demands and the way in which the Cleveland Clinic operates.

With these enhancements, each Cleveland Clinic Foundation department will attract more

dollars, more patients with an even greater reach into different locations and transcend healthcare

for the organization’s ability to provide care from diagnosis to treatment.

Environmental and Industry Analysis

Gerald McGillMGT 6609/11/2013 – Module 8 Homework

The Cleveland Clinic Foundation is uniquely positioned to achieve success due to the

competitive forces at work. Among high ratings in many other categories CCF was rated as the

#4 Hospital in America, #3 in Gynecology, #2 in Diabetes & Endocrinology,  #1 in Cardiology

in 2012. It is important to note that CCF achieves its highest ratings in many categories that are

directly related to several of the areas with the greatest room for improvement facing patients'

health in the US, specifically obesity and women's health. CCF's most direct competitor,

Cleveland University Hospital system, presents a contrasting ideology of focusing strictly

on addressing clinical problems versus the philosophical view of establishing a plan between

patients and doctors and with the support of caregivers at the Cleveland Clinic. By developing

greater synergy between CCF's clinical strengths and the service side of caregiving, the

Cleveland Clinic Foundation is leading the way in healthcare by helping patients see and achieve

the benefits of forming a committed partnership between patients and their doctors.

As a large-scale buyer of a variety of medical supplies, CCF has substantial bargaining

power with suppliers. In order to support clerical staff, the Cleveland Clinic Foundation provides

its caregivers with work stations strategically placed throughout its facilities; each work station

consists at least of a computer and phone headset but often includes other important tools such as

fax machines, printers and a myriad of medical supplies. Due to a collaborative effort between

suppliers and the Cleveland Clinic Foundation, not only is the organization well-staffed and

well-coordinated, it also uses industry-leading computer technology.

Entry and exit barriers for the Cleveland Clinic Foundation consist primarily of financial

constraints however an additional concern is having the level of skill and experience required to

Gerald McGillMGT 6609/11/2013 – Module 8 Homeworkeffectively address the needs of all patients. One of the Cleveland Clinic’s greatest assets is the

comprehensive scale its of health network versus those of its peers.

Due to the high level of care that patients receive from the Cleveland Clinic Foundation,

the organization benefits from offering healthcare with very few substitutes. Patients who visit

CCF are often facing life-threatening conditions and come to the Cleveland Clinic with the

expectation of receiving unparalleled care and service; in cases where patients are given a choice

between the Cleveland Clinic Foundation and another hospital and given comparable wait times,

most individuals are unwilling to sacrifice the level of care they receive at CCF for the relatively

small level of savings attained (this fact is made all the more true in today's healthcare industry

in which patients benefit increasingly from federally-subsidized healthcare costs). Following the

passage of the Affordable Healthcare Act, the trend in healthcare favors the hospitals which are

able to capture the greatest number of patients and receive the best reviews; future merit-based

reimbursements from the government are to be determined by the HCAPHS and CG-

CAPHS formula which considers the number of patients as well as patient's approval for the care

they received from in-patient and out-patient facilities respectively.

Target Market    

CCF's target market is all individuals in the United States and elsewhere. One of the most

critical issues slowing improvements in public health today is the huge gap between what is

known can optimize population health and healthcare delivery and what actually is implemented

in everyday practice. Among the Cleveland Clinic Foundation’s potential target market, 83.7%

of all US citizens have insurance, with 54.4% of the population receiving coverage from private

providers and 29.3% receiving coverage from public providers such as Medicare and Medicaid.

Gerald McGillMGT 6609/11/2013 – Module 8 HomeworkThis means that 16.3% of Americans, or approximately 50 million of the 319 million total US

citizens are without health insurance; by the time the Affordable Care Act is fully implemented,

an estimated 30 million citizens will remain uninsured while the growth of spending on

healthcare will have seen no significant slowing. In 1965, nearly 50% of spending on the cost of

healthcare per patient was out of pocket; today that number is closer to 13%. The issue with

rising healthcare spending relative to worsening overall health of Americans is the fundamental

misunderstanding that patients have regarding their insurance; far too many households view

insurance inherently as free routine care. Because the majority of Americans receive coverage

from health plans that afford patients highly subsidized routine care at the expense of subsidized

catastrophic coverage, the end result is that individuals undervalue the importance of routine

appointments due to subsidies and are also much more susceptible to crippling financial

losses stemming from catastrophic injuries and illnesses.

Product

The Cleveland Clinic Foundation is changing the way healthcare is perceived. Within the

CCF system, uninsured patients can apply for CCF network coverage. By choosing CCF, the

patient gains the benefit of working with a clinical and clerical caregiving team capable of

improving health with greater total coverage and cost effectiveness. CCF embraces changes in

which the caregiving teams raise the level of service being provided on routine visits to coincide

with lower subsidy routine visits so that greater catastrophic coverage is in place for the most

costly medical events during patient’s lives. The result is that through enhanced care and

interaction between patients and caregivers combined with a more balanced billing and insurance

plan, the Cleveland Clinic Foundation is able to provide patients with healthcare that covers all

Gerald McGillMGT 6609/11/2013 – Module 8 Homeworklifelong issues while still carrying the impact that individuals look for during their visits;

the organization is committed to helping families derive more value from their providers while

staying true to its identity as a patient-centered health system.

Pricing

In order to turn vision into reality, the Cleveland Clinic Foundation must implement

measures that make the organization more appealing in terms of price for the average patient.

Healthcare in the United States accounted for 17.4% of GDP in 2012, which is the highest

percent among all industrialized nations by far, and at current rates is set to grow at 2.2%

annually; despite the high level of expenditure, life expectancy in the US is only 27th in the world

(Berryman, Palmer, Kohl & Parham, Pg. 166). The average amount in out-of-pocket spending on

healthcare per person in America in 2012 was $3,795. CCF must do a better job helping patients

find value in each encounter patients have with their caregivers in the total health improvement

process.

The Cleveland Clinic Foundation is dedicated to enacting measures which benefit the

patient and organizations bottom line. Two ways in which hospitals can lower the price

for patients is by developing leadership and becoming more efficient. Engagement, skill

development, education and training with a focus on greater efficiency and execution are

core areas which the Cleveland Clinic is aiding its employees in enhancing the value of the

Cleveland Clinic. The Cleveland Clinic is building a new generation of leaders from within the

organization with a better sense of using technology to lower costs and streamline patient wait

times, inter-departmental communications and the billing process.

Gerald McGillMGT 6609/11/2013 – Module 8 HomeworkPromotion

In order for the Cleveland Clinic Foundation to raise the organization’s profile as the

premier healthcare system in the US and beyond, the organization must also raise recognition of

the benefits attained by patients from visiting CCF versus other health systems; this means

raising HCAPS scores in a way that translates to the average patient. Promotion of the Cleveland

Clinic Foundation will involve an organization-wide effort to engage caregivers in the same

development process that is demanded of our patients.

With the goal of attracting a greater number of patients from a broader spectrum of CCF's

potential target market, the Cleveland Clinic Foundation must become more appealing in terms

of price, patient access to physicians, level of care and service; only by improving all of the areas

in conjunction with each other will patients truly feel encouraged to establish comprehensive

healthcare with their providers and empowered to make the important changes that can

meaningfully impact their quality of health. The impact that CCF's mission has had on the

organization's strategy has directly lead to the implementation of MyChart, which is a cloud-

based system enabling patients to have direct access to the same medical information that the

Cleveland Clinic has on file; this includes routine visit information, test and lab results,

immunization records and appointment schedules.

Placement

Another way of improving cost efficiency available somewhat exclusively to the

Cleveland Clinic Foundation is by growing the scale of the organization. As a large and well-

developed health system, the Cleveland Clinic Foundation has the resources available to develop

Gerald McGillMGT 6609/11/2013 – Module 8 Homeworkand implement operating models which incorporate new concepts into the sum of all CCF's

individual parts; some examples of these new concepts in practice include the opening of CCF

Florida, CCF Toronto, CCF Lou Ruvo Center for Brain Health in Las Vegas and CCF Abu

Dhabi. The expansion of the Cleveland Clinic into new regions is critically important to the

organization because it can help fund research, incorporates new ideas into the organization and

creates new synergies that can improve patients healthcare and save both the organization and

the patient money. Potential new Cleveland Clinic Foundation locations being proposed include

Canada, London, China and India. Each location feeds into CCF's vision of being recognized as a

global leader in healthcare and strategy of choosing locations which offer potential synergies that

will allow the organization to continue providing the great level of care that patients expect.

Organizational Plan

            The Cleveland Clinic is dichotomized into three main operations branches. Those

branches are:

1) Clerical

2) Clinical

3) Financial

Clerical

Clerical will be responsible for greeting, check-in, documentation, directing patients,

answering patient questions and generally making Cleveland Clinic Foundation patients'

experiences more enjoyable in any way possible. Clerical is comprised of operations

managers within each department within CCF facilities, with one clerical manager leading

Gerald McGillMGT 6609/11/2013 – Module 8 Homeworkeach CCF family health center; above each facility manager are CCF regional administrators

responsible for coordinating uniformity in service excellence between inpatient and outpatient

facilities. The Cleveland Clinic Foundation envisions an administrative team that is visionary,

charismatic, organized and knowledgeable in the application of new technology in a healthcare

setting.

Clinical

The clinical department of the Cleveland Clinic Foundation is responsible for providing

the best in medical care. Among Cleveland Clinic’s highly ranked programs, nine placed in the

Top 5 nationally and six – heart, diabetes and endocrinology, gastroenterology, kidney disorders

and urology, and rheumatology – placed in the Top 2 (Cleveland Clinic Foundation, 2013). The

Clinical ladder consists of RNs and LPNs, Doctors and medical assistants. Each department at

Cleveland Clinic facilities is headed by a Doctor who acts as a department leader in addition to

his or her responsibilities to their patients. Cleveland Clinic Doctors comprise some of society's

greatest medical minds; a successful healthcare administrator must not only possess the

knowledge of utilizing innovative management tools, but must also develop interpersonal and

behavioral skills. CCF Clinical Administrators are expected to lead and participate within groups

with exposure to high profile projects covering a myriad of strategic and operational issues

affecting the system.

Financial

 The Cleveland Clinic Foundation's financial department is responsible for ensuring that

insurance and bill processing takes place in a way that is timely, accurate and patient-friendly.

Gerald McGillMGT 6609/11/2013 – Module 8 HomeworkFinancial advisors are assigned to CCF facilities on the basis of patient volume and the relative

need for financial assistance. Because the common misconception among hospital systems

nationwide has been that because the responsibilities associated with finance-related positions

occur primarily behind closed doors finance coordinators do not need the same level of

interpersonal communication skills, CCF has taken steps to place more attention on

communication and behavior during training as well as focusing more on communication skills

throughout the hiring process. Furthermore, in light of the passage of the Affordable Care Act

the Cleveland Clinic Foundation has increased the number of financial coordinator positions

significantly in anticipation of new necessary support. CCF is above all committed to

friendliness, accuracy, fairness and transparency throughout the billing process on behalf of our

caregivers.

Strategy

 The Cleveland Clinic Foundation's strategy, structure and systems have been designed to

remain constant in their application throughout all CCF facilities including those located abroad.

The organization's overlying strategy is to grow the scale of the organization to treat a greater

number of patients; in support of that strategy, the organization employs its own in-house team

of computer technicians who have implemented the reknowned EPIC computer system for

healthcare services. EPIC is a medical database designed to streamline a wide range of tasks

including scheduling appointments, checking patients in, documenting important patient and

medical information, sending and receiving messages. Another new development in health

technology is the HealthSpot, which was created by a third-party company funded by CCF;

HealthSpot is an interactive patient room which pairs a patient and nurse with a Doctor remotely

Gerald McGillMGT 6609/11/2013 – Module 8 Homeworkfrom a Cleveland Clinic satellite facility. The HealthSpot station is equipped with special sensors

within normal office scopes allowing the Doctor on his or her computer to diagnose symptoms

and prescribe treatment. Within the health service industry, many executives believe that the

HealthSpot will find its way onto nearly every college campus in America over the next five to

ten years.

  Both EPIC and HealthSpot represent examples of the strategy pursued by the Cleveland

Clinic Foundation to connect, educate and empower larger numbers of people to meaningfully

improve their health more than ever before thought possible.

Operational Plan

The Cleveland Clinic Foundation’s purchasing plan is focused on quality, cost and timing. In

order to balance these three criteria with the mission of innovation and research, CCF’s supply chain

management department consists of three key groups – sourcing, distribution and fulfillment. The

sourcing group manages the portfolio of suppliers, while the distribution and fulfillment group ensures

that supply needs are met throughout the organization (Mrosko, 2010). The vision of the Cleveland Clinic

Foundation is striving to be the global leader in healthcare supply chain through collaboration and

innovation; the mission of the organization’s supply chain management team is empowering caregivers to

deliver world class healthcare, research and innovation focused on “Patients First” by providing optimal

resources at the best value (Cleveland Clinic, 2013).

The Cleveland Clinic Foundation’s supply chain is comprised of 35 main business partners; these

primary organizations are in most cases large, reliable suppliers such as Microsoft and Apple who are

capable of providing the supplies necessary to meet the organization’s clinical, clerical and networking

demands. In addition to its main business partners, the Cleveland Clinic Foundation is also supported by

Gerald McGillMGT 6609/11/2013 – Module 8 Homeworkhundreds of collaborating suppliers who specialize in medical technology ranging from drug makers to

scanning device manufacturers and organizations which specialize in new medical concepts. Nearly all of

the Cleveland Clinic Foundation’s smaller providers receive direct feedback from CCF clinical providers

in a strategic fashion to assist in the development of new medical devices optimized to provide better

quality results. The Cleveland Clinic Foundation should pursue more measures to ensure that it is a lean

organization by capitalizing further on cost efficiencies stemming from the large, well-organized and

high-functioning organizational profile that CCF represents.

The Cleveland Clinic Foundation creates added value through a Supply Chain Management

department empowered to access and act on the organization’s most critical and up-to-date data; CCF

must also continue to capitalize on its role as an industry-leader in healthcare by achieving better

purchasing terms from long-term technology hardware providers. The Cleveland Clinic Foundation

currently enjoys a well-developed purchasing agreement standard included in all new purchasing

contracts attached to purchasing agreements. Included in the agreement are issues which cover the

expectations of CCF regarding the on-time and quality delivery and product support of ordered supplies;

potential supplier penalties for contractual non-fulfillment, which are intended to assist in heading off all

potential litigation scenarios, are also covered. In terms of supply chain management, logistics and

purchasing agreements, the Cleveland Clinic Foundation is committed to continually enhancing the

organization’s ability to reliably meet our patient’s expected healthcare demands.

Financial Plan

Of the three main operating branches of the Cleveland Clinic Foundation, the finance

department spends the least amount of time on patient-provider interaction and in many cases

carries the greatest influence on the patients decision whether or not to pursue clinical care. The

Cleveland Clinic Foundation houses a diversified and comprehensive financial organization;

Gerald McGillMGT 6609/11/2013 – Module 8 HomeworkCCF financial departments include academic affairs, accounts payable & travel, corporate

accounting, decision support services & business intelligence, enterprise risk management,

financial planning & budgeting, fiscal services & chargemaster, investment office, market and

network services, payroll, revenue cycle management, revenue & reimbursement and taxation &

compliance.

The financial planning and budgeting team is responsible for providing leadership and

management with financial forecasting tools and information, and administering processes that

support executive decision making around resource allocation;  Functional areas included within

Financial Planning are Budgeting, Long Range Forecasting, Capital Planning and Analysis,

Administrative Area Finance support, Financial Performance Improvement Measurement, and

Emerging Businesses Financial Analytics (Cleveland Clinic, 2013).

The enterprise risk management office procures and manages all lines of insurance for

the Cleveland Clinic and Regional Hospitals. The enterprise risk management office is striving to

continually reduce the overall cost of risk by providing the broadest, most encompassing

insurance coverage available and implementing long term, strategic risk management practices.

The mission of the Tax Department is to provide “best in class” tax planning, tax

compliance, and tax administration services for the Cleveland Clinic Health System in

accordance with the organization’s charitable mission and goals. The primary objective of the tax

function is to preserve and protect the tax exempt status of Cleveland Clinic and its affiliates.

The strategic advantages enjoyed by the organization are derived specifically from the

all-encompassing nature of the information used as well consideration of both immediate and

Gerald McGillMGT 6609/11/2013 – Module 8 Homeworklong-term areas of concern; critical items such as department by department operating

statements, which provide a moving picture of revenues, expenses and profits, allow CCF to

measure and respond to emerging trends early. The Cleveland Clinic Foundation also focuses

closely on financial performance management; CCF works constantly to eliminate financial

variances between budgeted and actual spending amounts on all line items (Cleveland Clinic,

2013). 

As a whole, the Cleveland Clinic Foundation uses financial information in order to create

a model that accounts for both short and long-run financial solutions. With a financial team in

place to assess credit risk, accounting, insurance coverage and empowered to make budgeting,

forecasting, capital planning and analysis decisions, the Cleveland Clinic is able to function more

efficiently than nearly any other health system. By capitalizing on synergies between CCF and

our partner health systems, the organization is able to expand its reach and ability to generate

greater revenues in a way that is cost efficient for the hospital; by combining networks

and clinical resources rather than through cash and debt, the Cleveland Clinic Foundation is able

to effectively balance short-term issues with long-term plans in a way which reduces outstanding

debt to less than four percent of total expenses. As a mature, profitable hospital system

benefiting from significant voluntary financial contributions within the community, the

Cleveland Clinic is able to focus on strategic and organizational culture initiatives which are

propelling the organization forward.

Critical Risk Assessment and Milestones Schedule

The Cleveland Clinic Foundation has traditionally undergone alternating periods of

technological improvements and patient capacity expansion. On August 22, 2013, Nashville-

Gerald McGillMGT 6609/11/2013 – Module 8 Homeworkbased Community Health Systems is partnering with the Cleveland Clinic to buy up the majority

of Akron General Health System in Summit County, marking the latest in a wave of hospital

mergers and acquisitions that are changing the healthcare landscape (Zeltner, 2013).

Presently, the Cleveland Clinic Foundation operates in Cleveland, Miami, Las Vegas,

Toronto and Abu Dhabi. Cleveland Clinic CEO and M.D, Dr. Delos “Toby” Cosgrove has also

indicated plans to expand into other markets abroad including Austria and Singapore, stating that

the core values of a good hospital system are transferable globally (Hesselschwerdt, 2011). For

strategic reasons, the Cleveland Clinic should also consider expansion within Canada, India and

China. The benefits of expansion in Canada are exposure to a greater number of patients - the

majority of whom are in great demand of specialized care due to Canada's socialized medical

system - and access to a cheaper and more comprehensive prescription drug network. India and

China allow the Cleveland Clinic Foundation to conduct research within the world's epicenter

for contagious diseases and are also growing sources of new physicians and the primary source

of bilingual doctors for the organization.

At a net worth of over $10 billion and annual operating income of nearly $685 million in

2012, the Cleveland Clinic is enjoying near record growth in income and investment; investment

into Canada could be efficiently implemented as soon as 2014 with the focus being developing a

more efficient and cost effective distribution network for prescription drugs to Cleveland Clinic

facilities (Cleveland Clinic Foundation, 2013). Investment into Asia in locations such as India

and China should begin planning with a tentative timetable for building to begin in 2015; these

multi-year projects each would project to over $1 billion. Critical factors in the development

phase for expansion in China is the expectation for government scrutiny of a foreign organization

Gerald McGillMGT 6609/11/2013 – Module 8 Homeworkwhich demand an alternative timetable; this alternative plan imagines a redistribution of

organizational resources away from India and into China to force a faster resolution to

implementation challenges in CCF’s first move into Asia.

Gerald McGillMGT 6609/11/2013 – Module 8 Homework

References

Porter, M. E. (2008). THE FIVE COMPETITIVE FORCES THAT SHAPE STRATEGY.

Harvard Business Review, 86(1), 78-93.

Berryman, S. N., Palmer, S. P., Kohl, J. E., & Parham, J. S. (2013). Medical Home Model of

Patient-Centered Health Care. MEDSURG Nursing, 22(3), 166-196.

Mahmud, A., Olander, E., Eriksén, S., & Haglund, B. A. (2013). Health communication in

primary health care - A case study of ICT development for health promotion. BMC Medical

Informatics & Decision Making, 13(1), 1-15. doi:10.1186/1472-6947-13-17 

McAlearney, A. (2008). Using Leadership Development Programs to Improve Quality and

Efficiency in Healthcare. Journal Of Healthcare Management, 53(5), 319-331.

Cleveland Clinic Foundation (2013). U.S. News Rankings.

www.my.clevelandclinic.org/default.aspx

Ulrich, D., & Smallwood, N. (2004). Capitalizing on Capabilities. Harvard Business Review,

82(6), 119-127.

Supplier Relationship Management Handbook (2013). Cleveland Clinic Foundation. Retrieved

from: http://my.clevelandclinic.org/Documents/supply-chain-management/supplier-relationship-

management-handbook-101310.pdf

Mrosko, Terri. Cleveland Plain Dealer (2010). “Hospital Supply Chain Management is a Fast-

Paced Career”. Retrieved from:

Gerald McGillMGT 6609/11/2013 – Module 8 Homeworkhttp://www.cleveland.com/employment/plaindealer/index.ssf/2010/07/

hospital_supply_chain_management_is_a_fast-paced_career.html

Cleveland Clinic Foundation (2013). “Responsibility Reporting Master”. Retrieved from:

http://portals.ccf.org/finance/Departments/ResponsibilityReportingMaster/tabid/2531/

Default.aspx

Cleveland Clinic Foundation (2013). “Financial Departments”. Retrieved from:

http://portals.ccf.org/finance/Departments/FinancialPlanningBudgeting/tabid/2503/Default.aspx