Cleveland Clinic: Value-Based Care Transformation - Strategic Analysis and Competitive Positioning

Overview

This case study examines Cleveland Clinic's organizational transformation toward a patient-centered, value-based care model since 2004. Using Porter's Five Forces and PESTLE analyses, the paper evaluates the competitive and macro-environmental factors impacting the health system's strategic decisions regarding integrated care expansion, geographic growth, and payment reform adoption.

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Cleveland Clinic: Value-Based Care Transformation

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Capella University

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HCM-FPX5312: Analyzing the Health Care Environment

Date in this format: March 6, 2020

PART 1: ORGANIZATION AND ENVIRONMENT

Introduction

Since 2004, the Cleveland Clinic, a globally renowned multi-specialty health system based in Cleveland, Ohio, has embarked on a massive organizational transformation, led by CEO Dr. Delos Cosgrove, around a patient-centered, value-based model of care. This paper explores the Clinic's opportunity to strengthen and expand its value-based integrated care model (Cleveland Clinic Integrated Care Model, or CCICM) amid the transition of the U.S. health care system to outcome-based, cost-effective payment models. Through Porter’s Five Forces and PESTLE analyses, this environmental scan reveals the competitive and macro-environmental factors that are impacting the Clinic's future, and the key strategic decisions it must make about integrated care, geographic expansion, and payment reform.

Organization Overview

Cleveland Clinic is one of the most well-known health systems in the United States, founded in 1921 by four physicians dedicated to providing collaborative, compassionate, and innovative care. In mid-2015, the Cleveland Clinic Health System employed 43,000 staff (including 3,200 physicians and 10,965 nurses) and cared for 6.4 million patients each year at its main campus, ten community hospitals in northeastern Ohio, eighteen family health and ambulatory surgery centers, and fifty-nine primary care offices (Porter & Teisberg, 2019). It also had facilities or affiliations in ten other states, Toronto, and Abu Dhabi, with operating revenues of $6.7 billion and operating income of $466 million in 2014.