In the hospital industry’s latest mega partnership deal, the Cleveland Clinic announced this week that it’s forming a “strategic alliance” with one of the nation’s largest for-profit hospital chains.
Nashville-based Community Health Systems Inc. (CHS) owns, operates or leases 135 hospitals in 29 states, including Affinity Medical Center in Massillon.
Under the five-year agreement, the organizations will remain independent but work together to share data, improve quality and boost efficiency.
“This alliance is about quality, access, value and productivity,” Wayne T. Smith, chairman, president and chief executive of Community Health Systems, said in a phone interview on Tuesday.
Though the nonprofit Cleveland Clinic and CHS will continue to operate separately, opportunities might exist for future joint ventures as the relationship develops, Smith said.
The hospital systems started talking last May about quality initiatives, said Dr. Toby M. Cosgrove, Cleveland Clinic president and chief executive.
“As we got further and further into the discussion, we realized there was much potential beyond just talking about the quality,” Cosgrove said. “We realized there are things we could do together.”
The deal between the Cleveland Clinic and CHS comes as hospital systems throughout the nation increasingly are forging affiliations.
Summa Health System announced a tentative deal last month to join with Catholic Health Partners, the largest hospital system in Ohio.
The nonprofit Catholic health system will get an undisclosed minority ownership stake in Summa, which includes Akron City, St. Thomas, Barberton and Wadsworth-Rittman hospitals, SummaCare insurance, a physician practice and other owned and affiliated businesses. Summa’s board of directors has approved a letter of intent to finalize the partnership agreement, likely by midyear.
Akron General Health System President and Chief Executive Dr. Thomas “Tim” Stover also has acknowledged his organization is considering partnership opportunities.
The hospital industry is going through an evolution similar to what occurred in banking, said Thomas S. Campanella, director of the health-care MBA program at Baldwin-Wallace University in Berea. The community banks from 20 to 30 years ago were largely replaced with regional banks, then with multi-state or national institutions.
“It makes it much more efficient to be able to consolidate or work together,” he said. “It’s ‘best practices’ applied to the real world.”
Initially, the deal between the Cleveland Clinic and Community Health Systems focuses on three key areas of collaboration:
• Quality alliance: The Cleveland Clinic will assist CHS hospitals in establishing “clinical integration” programs that allow doctors to share data and best practices to improve care while reducing cost.
• Clinical and operational services: The partners will explore ways to share best practices, including telemedicine initiatives, second-opinion services for doctors and patients, complex care coordination and cost containment.
• Cardiovascular services: The top-ranked Cleveland Clinic Heart and Vascular Institute will help select CHS-affiliated hospitals apply the institute’s expertise.
“We have 37 facilities that have cardiovascular programs,” CHS’ Smith said. “These are high-quality programs. The issue here is to take it to the next level.”
Likewise, Cosgrove said, the Cleveland Clinic can learn from efficiencies CHS has achieved operating hospitals across a large footprint.
“We have different areas of expertise,” Cosgrove said. “... There will be things we do for them that they pay us for and perhaps the same going the opposite direction.”
Cheryl Powell can be reached at 330-996-3902 or firstname.lastname@example.org.