The Observation Deck

Save Lakewood Hospital - Your Life Depends on It.

Next meeting:
Saturday May 23
4 p.m. (to 5:30)
Lakewood Public Library (Main, on Detroit at Arthur)
Multipurpose Room

All who want to Save Lakewood Hospital are welcome to join us.

We are a group of citizens in Lakewood who are determined to Save Lakewood Hospital.

Our group includes some of the best and brightest in Lakewood. We have been investigating and working all angles, for four months now, reading documents, attending meetings, uncovering the truth, setting aside the fiction.

We are doctors, lawyers, accountants, teachers, nurses, newsmen, IT guys, writers, PR and marketing folks, printers, sign companies, business owners, museum docents, historians, retirees, and a whole lot of regular folks. Every one of us has an investigative personality. Everybody is helping get signatures, educate our neighbors, place yard signs, get signs in stores/restaurants, influence our councilmen/women, plan our July 4 Parade Group, prepare for a Referendum, attend Council meetings, etc.

We have a really NICE group of good people!

Those who wish to contribute money, can make your check payable to:

Save Lakewood Hospital
16903 Fischer Rd. #1 (up)
Lakewood, OH 44107

I am Marguerite Harkness, CPA, Chair of Save Lakewood Hospital.

Sigh. I'll take the bait.

Saying "Your Life Depends on It" is a bit hyperbolic, no? I want Lakewood Hospital to stay, but if it doesn't, it's not like we don't have choices. Fairview is, what, an extra five minutes away? And not even that if you are on the west side of Lakewood.

With the Cleveland Clinic plan, we would still have an emergency room, so not sure why "Our Life Depends" on saving Lakewood Hospital.

Again, I'm totally supportive of keeping Lakewood Hospital, but I think we need to watch the rhetoric and hyperbole and focus on the things that matter.

JMHO

Here's my lawn sign. Thanks Marguerite!

Alex, it's great to see that sign from our porch. Mr. Summers, Ms. Madigan, take a good look around you they're popping up everywhere. And M.L. that's not rumor that's fact.

We are currently out of yard signs (Alex was the lucky winner of the last one).

However, hundreds more will arrive in about a week.

To get one, go to www.savelakewoodhospital.org and enter your info in the "Yard Sign" section in the right hand column (just below the mailing list form).

Demand is EXTREMELY strong.....the more people see them, the more they want one.

I'm very impressed with the caliber, organization and motivation of this group. As I watch them in action I see what I once thought to be a "done deal" unraveling rapidly. Everyone should take them very seriously.

One of my Facebook friends who is the Head of Business Excellence - Middle East, Turkey and Africa for Takeda Pharmaceuticals wrote the following to me in regard to Lakewood Hospital:

"This caught my attention since I am studying hospital management. My knee-jerk reaction is, when will hospitals manage with fiscal diligence as a priority? Not-for-profit does not mean it's OK to sink! Read the work of Chassin: There are tools for robust process improvement that can and must be used to cut cost and optimize revenues AND improve clinical quality."

To Alex's friend at the pharmaceutical company (and to everyone else).
Lakewood Hospital, quite contrary to what "they" have been publicizing - is so profitable that the Cleveland Clinic has pulled over $24 million in 2014 from the Lakewood profits. Lakewood's operating profit is positive, that is profit, for the last 4 or 5 years, even AFTER Cleveland Clinic charges Lakewood for about 1/7 of the Consolidated Cleveland Clinic's Administrative expense. (This includes their highly-paid EXECUTIVES, Legal, Consulting, IT, HR, and a whole host of other overhead expenses at the Cleveland Clinic main campus in downtown Cleveland.)
Lakewood Hospital is, in fact, Cleveland Clinic's CASH COW. Clinic has pulled over $146 million out of Lakewood Hospital's income over the last 7 years - while at the same time they claim it is unprofitable. And while at the same time, they have built their Avon hospital (their excuse to kill Lakewood Hospital) - WITH LAKEWOOD MONEY.

If Lakewood Hospital didn't exist, there wouldn't be the profit here for Clinic to dip into to cover some of its downtown overhead expenses. Clinic would still have those expenses, in full, but couldn't suck it out of Lakewood.

I'm a CPA and I have read the 2014 Audited Consolidated Financial Statements of the Cleveland Clinic Foundation including the footnotes and Supplementary Information.

Thanks for clearing that up Marguerite! It's interesting that the ONLY positive coverage, besides the Observer, this movement gets was a front page story in the Sun Post last week. Next to that article was an article on the LHA telling the council all about losing $500,000/month at Lakewood Hospital.


Hmmm, who to believe?

Marguerite Harkness wrote:To Alex's friend at the pharmaceutical company (and to everyone else).
Lakewood Hospital, quite contrary to what "they" have been publicizing - is so profitable that the Cleveland Clinic has pulled over $24 million in 2014 from the Lakewood profits. Lakewood's operating profit is positive, that is profit, for the last 4 or 5 years, even AFTER Cleveland Clinic charges Lakewood for about 1/7 of the Consolidated Cleveland Clinic's Administrative expense. (This includes their highly-paid EXECUTIVES, Legal, Consulting, IT, HR, and a whole host of other overhead expenses at the Cleveland Clinic main campus in downtown Cleveland.)
Lakewood Hospital is, in fact, Cleveland Clinic's CASH COW. Clinic has pulled over $146 million out of Lakewood Hospital's income over the last 7 years - while at the same time they claim it is unprofitable. And while at the same time, they have built their Avon hospital (their excuse to kill Lakewood Hospital) - WITH LAKEWOOD MONEY.

If Lakewood Hospital didn't exist, there wouldn't be the profit here for Clinic to dip into to cover some of its downtown overhead expenses. Clinic would still have those expenses, in full, but couldn't suck it out of Lakewood.

I'm a CPA and I have read the 2014 Audited Consolidated Financial Statements of the Cleveland Clinic Foundation including the footnotes and Supplementary Information.

Hello Marquerite,

So.... the Consolidated Cleveland Clinic's Administrative expense is __?___cents for each dollar of unrestricted revenue at Lakewood Hospital.

And... the Consolidated Cleveland Clinic's Administrative expense is __?____ cents for each dollar of unrestricted revenue at each of the other hospitals.

For comparison sake, any idea on those numbers?

Thank you,

Scott Meeson

Scott Meeson wrote:For comparison sake, any idea on those numbers?

Thank you,

Scott Meeson

Scott, I'll just butt in here. See this:

http://my.clevelandclinic.org/about-cle ... nformation

http://www.onelakewood.com/Wellness/Default.aspx

The financial statements for the Clinic and Lakewood Hospital follow the same general format. Both have a line item under expenses labeled Administrative Services.

For 2013

Cleveland Clinics administrative services were about 2% of net patient service revenue.

Lakewood Hospitals administrative services were about 17% of net patient service revenue.

I'm just looking at those line items for 2013 but it seems Lakewood paid 15% of the Clinics Administrative expenses. Please check it out for yourself and check my numbers I might have missed something.

Scott, here are the numbers for 2014 and 2013. (Thanks for asking.)

Cleveland Clinic Consolidated (all their hospitals):

2014: Net patient service revenue $6,070,117,000 (that's 6 billion)
2014: Admin. services $167,587,000 or 2.8% of revenue

2013: Net patient service revenue $5,873,582,000
2013: Admin. services $163,778,000 or 2.8% of revenue

Lakewood Hospital alone:

2014: Net patient service revenue $118,127,000 (that's 118 million)
2014: Admin. services $24,305,000 or 20.6% of revenue

2013: Net patient service revenue $123,146,000
2013: Admin. services $24,438,000 or 19.8% of revenue

These numbers are in the audited financial statements (Page 4).
Why should Lakewood pay 1/7 of the whole Cleveland Clinic overhead? They are about 50 times as big as we are.
On the same ratio, we would pay about $3 million of Admin exp.

And - the reason our Net patient service revenue is DOWN, is because Clinic is telling docs and patients (and EMS) to go to Fairview instead.

The financial officer who gave the financial report ($500,000 loss per month) is a Cleveland Clinic employee who has (probably) already made the journal entry for the prox. $2 million admin expense each month, at the direction of his boss (Clinic). The Lakewood Hospital Assoc. board did not question his report, except to acknowledge that the 2015 patient services are down, even below 2014 services. Well - when they send everyone away, that's inevitable.

Marguerite Harkness wrote:Scott, here are the numbers for 2014 and 2013. (Thanks for asking.)

Cleveland Clinic Consolidated (all their hospitals):

2014: Net patient service revenue $6,070,117,000 (that's 6 billion)
2014: Admin. services $167,587,000 or 2.8% of revenue

2013: Net patient service revenue $5,873,582,000
2013: Admin. services $163,778,000 or 2.8% of revenue

Lakewood Hospital alone:

2014: Net patient service revenue $118,127,000 (that's 118 million)
2014: Admin. services $24,305,000 or 20.6% of revenue

2013: Net patient service revenue $123,146,000
2013: Admin. services $24,438,000 or 19.8% of revenue

These numbers are in the audited financial statements (Page 4).
Why should Lakewood pay 1/7 of the whole Cleveland Clinic overhead? They are about 50 times as big as we are.
On the same ratio, we would pay about $3 million of Admin exp.

And - the reason our Net patient service revenue is DOWN, is because Clinic is telling docs and patients (and EMS) to go to Fairview instead.

The financial officer who gave the financial report ($500,000 loss per month) is a Cleveland Clinic employee who has (probably) already made the journal entry for the prox. $2 million admin expense each month, at the direction of his boss (Clinic). The Lakewood Hospital Assoc. board did not question his report, except to acknowledge that the 2015 patient services are down, even below 2014 services. Well - when they send everyone away, that's inevitable.

Marguerite and Bill,

Thanks so much for your replies.

I would hope you would read an explanation of "shared services" from the following minutes:

I think that was an understandable explanation back then, but I'm wondering how that is all accounted for in present day financial statements? I note in the attached minutes(focusing on the 10/21/2011 special meeting) that the Cleveland Clinic is stating that administrative expenses for the entire enterprises is $880 million per year of which 38% are Main Campus direct services and 62% are shared services. Take a look, if you haven't already, it's an interesting read.

Let me know your thoughts/ insights.

Thank you,

Scott Meeson

Scott,
Thank you for sending that huge batch of Minutes of the LHA board and the Joint Finance Committees (corporate and Lakewood). I do not have 6 hours now to read all of this and comment. But I do have lists of their "shared services" which I analyzed and expanded upon in an earlier post on the Deck. I also note in these Minutes that they have blacked out (redacted) much of the financial numbers that we should have, to be able to analyze. I also note that in 2011 they charged Lakewood about 10% of its (Lakewood) patient revenue - for the Shared Services. Now it is about 20%. WAY out of line - if CCF is 50 times as big as Lakewood.
Note also, these Minutes are marked Confidential. How can that be - when LHA is a public entity, responsible to Lakewood citizens, and its meetings are supposed to be open to the public??
We need to find out, back in 2007 or 2008, when they charged Lakewood around $10 million - what was the total Admin Services expense? And compare that to 2013-2014 when they are charging Lakewood over $24 million. In just 7 years, CCF has sucked over $146 million out of Lakewood. (IF Lakewood is a loss - well - if you charge allocated expenses at the rate of 20% of Sales - well, CCF is responsible for the ENTIRE loss. ALL of it.)

Marguerite Harkness wrote:Scott,
Thank you for sending that huge batch of Minutes of the LHA board and the Joint Finance Committees (corporate and Lakewood). I do not have 6 hours now to read all of this and comment. But I do have lists of their "shared services" which I analyzed and expanded upon in an earlier post on the Deck. I also note in these Minutes that they have blacked out (redacted) much of the financial numbers that we should have, to be able to analyze. I also note that in 2011 they charged Lakewood about 10% of its (Lakewood) patient revenue - for the Shared Services. Now it is about 20%. WAY out of line - if CCF is 50 times as big as Lakewood.
Note also, these Minutes are marked Confidential. How can that be - when LHA is a public entity, responsible to Lakewood citizens, and its meetings are supposed to be open to the public??
We need to find out, back in 2007 or 2008, when they charged Lakewood around $10 million - what was the total Admin Services expense? And compare that to 2013-2014 when they are charging Lakewood over $24 million. In just 7 years, CCF has sucked over $146 million out of Lakewood. (IF Lakewood is a loss - well - if you charge allocated expenses at the rate of 20% of Sales - well, CCF is responsible for the ENTIRE loss. ALL of it.)

Marguerite,

Well...what do you believe is a reasonable number(%) for shared services for a hospital the size of Lakewood Hospital?

Thank you ,


Scott Meeson