The Observation Deck

While the Clinic has given lip service to serving the people of Lakewood it is lip service only. The reality is that they have used the Hospital as a cash cow to subsidize their expansion in other communities.

The Clinic is willing to spend $160,000,000 for 72 beds in Mayfield Heights. Even if they only finance 80% of the cost they will be paying more than $1,000,000 per month to fully amortize the loan. That's 12 million dollars per year! The Clinic pays Lakewood one million a year for an entire hospital. Do you suppose the Clinic is making any money on a deal like that?

See:

http://www.cleveland.com/search/index.s ... med&coll=2

The next Mayor should make a more equitable deal with the Clinic a priority. Lakewood deserves better than to be the Clinics cash cow.

it is part of the "grow or die" mentality of Healthcare and most other industries.

'Consolidations' in the healthcare industry are heralded as reducing 'inefficiencies'. The cost of mergers and acquisitions is a major ball and chain. The cost of expansion - building more hospital rooms - is absurd.

Administrative costs continue skyrocketing in aggregate and as a portion of total operating expenses. This was inevitable. The goal of most professionals is to maximize the prestige of their position and credentials. How is healthcare different now than when it was more affordable(50 years ago?)?

The lawsuits are a minuscule portion of the equation. paying for health insurance is irrelevant when the cost of most conventional health services is absurdly high. My friend ended up paying half a months salary for four stitches on his thumb.

A doctor interviewed in Studs Terkel's book Coming of Age has an interesting take on what went wrong.

Huh? I thought that it was stated just weeks ago that Lakewood Hospital was one of the least profitable locations of the Cleveland Clinic. Which is it? The hospital is the largest employer in Lakewood other than the city and schools, do you really propose that the next mayor put them on the firing line while they are providing much needed jobs, a very positive anchor to many aspect of the community but aren't giving us as much as a far more affluent and profitable part of town? Let's hope that the mayor weighs out options before blazing into decisions based on half educated articles written for the PD.

The complexity of the accounting of a giant healthcare chain makes it possible for any piece of the chain to be profitable or unprofitable.

The non-monetary expenses of real property depreciation and equipment depreciation can be shuffled all around. Other revenues and expenses can be shuffled all around. Profit = Revenues - Expenses.

The enormity of the cost of acquiring an existing hospital should rule out choosing to purchase one, unless it is paid for with tricked up stock trades.

The reason to make a hospital show low-profits is to prevent other healthcare conglomerates from coveting it. Unless you want to sell it to them, in which case it would make sense to make them think it is more than it is worth. Hospitals are different though: they generally aren't allowed to go out of business because they are nearly as important as Utility companies.

The Mayor generally has little influence in the wheelings and dealings of a healthcare conglomerate. At most a mayor will have political clout to prevent a hospital from closing. But the Conglomerates know this, so can threaten to close in order to get the Mayor to help line up a sweet package or trade.

Shawn Juris wrote:Huh? I thought that it was stated just weeks ago that Lakewood Hospital was one of the least profitable locations of the Cleveland Clinic. Which is it?

According to their website Lakewood Hospital has 38,925 ER visits, 13,400 admissions, 400 beds and 96,000 outpatients.

I suppose it is possible that they are losing money. But is that by design? We know that they have transferred doctors from Lakewood to their facilities in Westlake and Strongsville and told the patients it "was just a short drive away". What happens when you transfer your paying customers to other facilities and your non paying customers to Lakewood?

In any case you have to realize that accounting is a mysterious science. Just between you and me the profit and loss of any one Clinic facility is exactly what they want it to be.

To a certain extent the Clinic DECIDES how much money Lakewood Hospital loses or makes.

Certainly the Clinic is quit willing to use the threat of closure as a hammer over the head of the City. Should the next mayor be so fearful of the Clinic that he gives them a blank check, that he allow them to use Lakewood as it's loss leader...keeping the no pays and transferring the insurance rich?

My point is that they are willing to use 163 million of their own dollars for 72 beds. How profitable would Lakewood hospital be if the Clinic chose to invest 163 million dollars for Lakewood's 400 beds?

The next Mayor should at least consider the possibility that the City is being taken for a ride.

I don't see the possibility as much as I see speculation. Should the mayor to be also consider why we need the hospital so badly and find ways to lessen our dependency by attracting more employers?
Are there projects that have been put on hold or not advanced because of a lack of funding by the hospital? What I see in this supposition is that someone else is getting development dollars for a medical facility and griping that it's not us. What is it exactly that is needed here? Other than more residents/patients who have insurance coverage that will pay for their care. While accounting can be manipulated at some levels to shift money from one column to another, that seems to be a strong accusation that the hospital is guilty of creative accounting. Are you basing that on anything?

Bill

You may have point, I really don't know. But, here (as in a number of other threads) you are once again looking for some kind of "do over" with regard to existing contracts. Once you've made that contractural arrangement, with a labor union, the teachers, the hospital....whatever, even if the deal is no longer as favorable as you may have once thought, you simply can't revisit it. If we're dealing with renewals, or new negotiations, fine. But as far as I know, our arrangement with the Clinic is pretty long term and I'm unaware of any provisions which allow for "reopeners".

Jeff

Jeff Endress wrote:.......But, here (as in a number of other threads) you are once again looking for some kind of "do over" with regard to existing contracts. ... the teachers, the hospital....whatever, even if the deal is no longer as favorable as you may have once thought, you simply can't revisit it.

Those are all good points. Made gooder by the fact that they are true... except... contracts come up for renewal and other pressures can be applied.

The Clinic got a very sweet deal the last time around. If there are ways to adjust the current contract (which I doubt) the City should pursue it. The City should also begin negotiations with the University Hospital System so it can establish a presence in the City. A little competition never hurts. Or should the City just roll over?

As to the schools... When those contracts come up for renewal at a minimum the board should insist on the teachers paying the employee portion of the pension.

When the original deal with the Clinic was made I am sure it seemed like a good idea at the time. Just as the school board paying the employee portion of the pension must have seemed like a good idea at the time. But times change.

Bill

Understood. Times do change. And whenever any of these items come up for renewal we need to revisit them in light of the then current circumstances. I'm uncertain of when the Hospital contract is open for renewal, but I would hope, whenever it is, we'll get the best deal we can, at that time.

Jeff

Bill,

Wake up! Cleveland’s population has shrunk and the wealthy are moving farther out. Deaconess, Grace, St. John’s Cleveland, St. Michael’s, Mount Sinai, and St. Luke’s have all closed. There were some failed attempts to rescue those facilities, but they didn’t work or the “for profitâ€Â￾ suitors left the greater Cleveland area with little or no cash. The Cleveland Clinic or University Hospitals did not rescue any of those fine hospitals.

Greater Cleveland does not have local hospital competition. The Cleveland Clinic and University Hospitals are the only games in town. Neither could give a rat’s behind about Lakewood Hospital. They don’t care about Lutheran and Fairview, which means those hospitals are in the same sinking boat.

The competition is worldwide not in our backyard. It is the Clinic and UH versus The Mayo Clinic, Johns Hopkins Hospital, The Royal Marsden Hospital (England), UCLA Medical Center, Massachusetts General Hospital…

If Lakewood’s mayor takes the tone of negotiations that you suggest, I can guarantee you that the complex of buildings on Detroit and Belle will become something other than a hospital. Perhaps we would have another huge nursing home. 1,378 jobs would be lost in a community that does not have many industrial jobs. The ripple effect would be many doctors’ offices closing, which means further loss of jobs.

What is the answer to save our hospital or improve our negotiations with the Clinic? One suggestion is to find a niche such as rehabilitation or psychiatry where the Clinic does not rank in the top ten. If Lakewood’s public and private communities invest substantially in our hospital, we will see rewards for years to come.

I would suggest the investment of millions of dollars. The status quo is not an option for Lakewood Hospital or our hospital will cease to exist. The last substantial investment was for our Emergency Room expansion and it is now one of the best on the west side. Lakewood owns the hospital although the Clinic runs it, it is an asset we can’t afford to lose.

Bill Grulich wrote:I would suggest the investment of millions of dollars. The status quo is not an option for Lakewood Hospital or our hospital will cease to exist. The last substantial investment was for our Emergency Room expansion and it is now one of the best on the west side. Lakewood owns the hospital although the Clinic runs it, it is an asset we can’t afford to lose.

I agree.

I just think that one million dollars a year for a facility the size of Lakewood Hospital is a bargain.

In 2002 the hospital had 1,424 employees. It now has 1,060.

In 2002 the hospital had 12,400 admissions. It now has 13,400.

In 2002 the hospital had 36,000 ER visits. It now has nearly 40,000.

The Clinic reduced the number of employees by 25% while the case loads of all kinds increased. They pay one million dollars a year for rent on a facility that generates hundreds of millions of dollars a year in revenue.
And the Clinic says with a straight face "We're losing our ass on that facility!"

If the Clinic is truly commit ed to Lakewood why the 25% reduction in staff?

All am saying here is the future of Lakewood Hospital should be part of the discussion during the upcoming mayoral election.

I don't expect or necessarily want the candidates to discuss this issue on this forum. I do hope that they address the issue.

The Cleveland Clinic is from the East Side. The East Side will always give the West Side problems.

Bill

Many interesting things going through thread.

I have to ask. What exactly do you want the hospital to do?

I expect them to give quality care to the city of Lakewood. While I have heard stories of long wait in the emergency room for non-threatening injuries, I believe the overall rating given by patients is pretty good. I saw one chart that had them one of the highest in the Cleveland Clinic System. An abstract number no doubt, but I do not think other hospitals would send in survey numbers, so we have to deal with what we have,

If you are not looking for the Hospital to expand in Lakewood, something I know you are against, as it move taxpayers out of homes for a non-taxpayer. What do we want?

You do not kill the "cash cow." So if it have good service, quality care, and know they will not let the cash cow die, isn't it a good thing for the city?

What are your expectations?

*Disclaimer - The Lakewood Hospital is an advertiser with the paper, and I sit on the community board. The Cleveland Clinic is a client.


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I have a different question...

In other threads you quite forcibly argue against your perception of wasted tax dollars on personnel. You repeat over and over again that the city is overstaffed and that it should reduce personnel costs and become more efficient - i.e. require fewer personnel to do more work.

Here, the Clinic/LH is practicing what you are preaching, but you are criticizing them?

Really, which way is it? Business and government should strive for efficiency? Or they should strive for more employment and service? Are you intimately involved with the operational S.W.O.T. analysis for either such that you can make an informed assessment of either?


Curiously,
Charyn

I think more people use the emergency room and the express care option than before because they don't have regular doctors.

However, even if you do have a regular doctor, sometimes the advice is to go to the ER rather than the doctor (which I find difficult to understand at times).

And even if you do have a regular doctor, sometimes you can't get an appointment as fast as you can get someone to see you at express care. So I wonder if our culture has changed from only going to the ER if you have a body part falling off to going to the ER with a backache.

We were listening to the scanner one night and a parent called 911 because their child had an ear infection. I would guess that the parent had no way to either get - or get to - medical help any other way.