As the year winds down, STAT reporters are taking a look at the stories they’re most eager to track in 2018. Find all our “three to watch” series here.
ealth care systems faced a lot of uncertainty in 2017. From the repeal of the individual mandate to potential cuts to federal cash, political issues played a key role.
But it wasn’t all politics: Some hospitals were shuttered by hurricanes, while others closed due to heavy financial losses. Because of the industry’s volatility, the CEOs of major hospitals postponed expansion plans and those leading nonprofit chains considered massive mergers.
With little stability likely to come from D.C., the CEOs at the following three health systems are worth watching in the coming year not just because their hospitals are thriving but because they have the potential to influence the broader health care landscape in these uncertain times.
Dr. Tomislav Mihaljevic, incoming CEO of Cleveland Clinic
After 13 years at the helm of the Cleveland Clinic, Dr. Toby Cosgrove will step down from his role as CEO at the end of 2017. His successor, Dr. Tomislav “Tom” Mihaljevic, is no stranger to the $8 billion health system, having overseen its hospital and clinic in Abu Dhabi, United Arab Emirates, since 2015. But will Mihaljevic be able to fill Cosgrove’s shoes?
Cosgrove’s influence can’t be overstated. He’s guided the Cleveland Clinic through a period of massive expansion during which revenue more than doubled amid the opening of new locations in the United States, Canada, and Abu Dhabi. And he had the ear of Presidents Obama and Trump — who both courted him as secretary of the Department of Veteran Affairs.
Robert Rich Jr., chair of the Cleveland Clinic’s board of directors, believes that Mihaljevic, who first started there as a cardiothoracic surgeon back in 2004, has a “depth of experience” that sets him up for success. But he’ll have some fast-approaching tests: the clinic opening its first U.K. location, in London, in 2020; implementing a new plan to improve diversity and reduce discriminatory bias; and finding success in the insurance business, which it first tried through a recent partnership with Oscar Health.
In 2018 and beyond, many industry eyes will be on Mihaljevic, to see how he uses his platform to influence health care policy nationwide.
Tim Putnam, CEO of Margaret Mary Community Hospital
Hundreds of rural hospitals are at risk of closing over the next decade. They might want to look to tiny Batesville, Ind., for a blueprint on how they might better their odds at survival.
Tim Putnam, who has led MMCH for nearly a decade, steered his 25-bed hospital toward a net revenue of $100 million last year at a time when a third of all rural hospitals were at risk of closing. He attributes the success to a prioritization of outpatient services like imaging, hiring staffers from the communities MMCH serves instead of hiring traveling contract doctors and nurses, and earning the trust of patients in the region.
“I wish there was a magic pill,” Putnam told STAT. “The difference you’ll find between rural hospitals that are very successful and the ones that struggle comes down to the trust within the community.”
Now Putnam is hoping his community will extend that trust to an even more radical project: stripping his hospital of inpatient beds. The concept is that rural hospitals like MMCH would provide outpatient and 24-7 emergency care but transfer patients needing long-term inpatient care to larger regional hospitals. He believes the plan offers rural hospitals greater financial flexibility that, in some cases, could allow administrators to keep open hospitals in a limited capacity rather than shuttering outright.
Due to regulations, “you can’t be a hospital without inpatient right now,” said Alan Morgan, CEO of the National Rural Health Association. “He’s advocating for a new rural hospital model.”
That requires federal regulations to be loosened. Putnam is still looking for a member of Congress to sponsor the legislation — but is hopeful that’ll happen in 2018.
Kevin Lofton and Lloyd Dean, co-CEOs of the new Dignity-Catholic Health Initiatives health system
It’s unusual to see a health system with two CEOs. But the long-awaited merger between these two Catholic health systems — creating what would be the second-largest nonprofit health system in the country — may do just that.
Lofton and Dean will jointly oversee the system of 139 hospitals out of a new Chicago headquarters. It’s noteworthy not just for the size of the new institution — with 159,000 employees and more than 25,000 physicians — but also as an example of a broader trend of consolidating health systems across the U.S.
The new mega-system will also be worth watching, too, as part of the trend of Catholic hospital mergers. (Ascension and Providence St. Joseph Health recently begun talks about a mega-merger.) Catholic hospitals are expected to follow the directives of the United States Conference of Catholic Bishops, which strongly opposes abortion and sterilization. Will Lofton and Dean’s increased clout lead to more forceful lobbying by Catholic health systems to curtail reproductive health services? Women’s rights and civil liberties advocates will be watching closely.