US/World

Cleveland Clinic Does Budget Cuts, Slashes Jobs In Preparation For Obamacare; Aimed To Improve Efficiency, Not Affect Patient Care

Cleveland Clinic
The Cleveland Clinic has many hospital locations in Ohio, several in other states, and a location to open in Abu Dhabi. Wikimedia Commons

Cleveland Clinic President and Chief Executive Dr. Toby Cosgrove announced Wednesday that the Clinic may be reducing expenses by about 6 percent, referring to the Affordable Care Act as the reason for the cuts.

“Although we have made progress, we need to further reduce costs to the organization by $330 million in 2014,” the Clinic said in a statement. “Some of the initiatives include offering early retirement to 3,000 eligible employees, reducing operational costs, stricter review of filling vacant positions, and lastly workforce reductions.”

The Cleveland Clinic currently employs about 44,000 people and is Cleveland’s largest employer. The Clinic is Ohio’s second largest employer next to Wal-Mart. With nearly 100 locations around Ohio, employing 3,000 doctors, it is a world-renowned healthcare giant that has treated celebrities and world leaders.

Its current budget is about $6 billion per year. The Cleveland Clinic’s main campus, which includes a hospital, an outpatient clinic, and a research institute, is most well known for its cardiac and cancer treatment. The Clinic has several outpatient locations throughout the states and one expected to open in Abu Dhabi next year.

"We’re seeing a rise in overall health care costs across the country, and the Cleveland Clinic is trying to be proactive,” Eileen Sheil, Executive Director of Corporate Communications for the Cleveland Clinic Foundation, told Bloomberg. “We have to make health care more affordable to patients because the costs are going to fall more on them in the future.”

Sheil also told Reuters that under Medicaid, the Clinic would be reimbursed less. The Clinic will have a better idea of what the cuts will entail in January 2014.

Other hospitals are facing similar new landscapes as the Affordable Care Act approaches, with open enrollment taking effect October 1, 2013. In the past several months, health care organizations and hospitals find themselves looking to diminish costs and cut budgets.

The Affordable Care Act was passed by Congress in 2010 and will provide insurance to some 50 million uninsured U.S. citizens, which is expected to increase the people who are on Medicaid.

“This has become the new normal,” Sheil told Cleveland’s Plain Dealer. “This has been a conversation that’s been ongoing, not just at the Cleveland Clinic but nationally.”

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