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Profiles in Doing Both: The Doctors Who Could Save Health Care

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Thirty-two million.

That's how many additional Americans will receive coverage thanks to controversial health care reform signed into law by President Barak Obama in March.

While a blessing to those in need, the new insurance coverage puts additional burdens on an already over-taxed system. Not surprisingly, many health care professionals are worried.

Rather than wait to see what unfolds, doctors and administrators at the world-renowned Cleveland Clinic, are already making critical reforms that some say could "cure" health care in the U.S. Led by outspoken CEO and former cardiac surgeon Dr. Toby Cosgrove, the Cleveland Clinic has done what many previously thought was impossible: it has simultaneously improved patient care and lowered costs.

To achieve these seemingly conflicting aims, the not-for-profit organization simply refused to tackle each challenge in isolation. To Cosgrove, doing one without the other made no sense. So he pushed his organization to do both by leveraging new technology, adopting new best practices and radically changing the business of medicine.

Founded in 1921, the clinic boasts one of the nation's most-advanced health care IT systems. It helps the health care provider better track the 3.3 million patients that visit its facilities each year. Outcomes are constantly monitored and recorded to help doctors better understand what works and what doesn't. Thanks to these investments, the Cleveland Clinic avoids redundant testing, which saves money and spares patients repeated inconveniences. And because its records are online, the hospital can better coordinate patient care with other health care professionals.

As for its own doctors, Cleveland Clinic has embraced a new compensation framework that provides a multitude of benefits. Rather than work as independent contractors paid for each test they order or every task they perform, physicians at the Cleveland Clinic are salaried personnel who work directly for the hospital. Though an unusual arrangement embraced by a relative handful of hospitals (the renowned Mayo Clinic is another adherent), the distinction is a proven money saver. Instead of ordering expensive tests that drive up their bills or performing procedures only to ward off lawsuits, Cleveland Clinic's doctors are motivated to work in their patients' best interests. Little wonder that out of the top five medical centers recognized by U.S. News, the Cleveland Clinic is the most cost-efficient.

And it's among the best, too. The hospital boasts the nation's highest-rated heart surgery center, and ranks second in the U.S. for gastroenterology, urology and rheumatology.

To keep the hospital running smoothly, Cleveland Clinic's management team does things that many other organizations overlook. It paid McKinsey & Co. more than $5 million to help the hospital organization find ways to reduce costs and improve care. One recommendation: run the organization more like a manufacturing operation that tightly monitors costs and embraces just-in-time logistical techniques. After engaging McKinsey, Cosgrove created a 50-person organization whose express mission is strategic planning and continuous process improvement. The team has helped the hospital revamp departments and change critical workflows that have reduced patients' wait times and increased staff productivity.

Today, the reforms launched in Cleveland are being implemented throughout the Clinic's nine community hospitals, 15 family health centers and satellite facilities in Florida and Toronto. The work has attracted widespread attention from the media and government officials who see the Clinic as a model going forward. A year ago, President Obama toured the facility with Cosgrove and spent time with him trying to better understand how it worked.

"Part of the reason the [Cleveland Clinic's] system works so well is that they have set up a system where patient care is the number one concern, not bureaucracy, what forms have to be filled out, what are we going to get reimbursed for, etc.," said the President. "These are changes I think the American people want to see."

That includes the 32 million uninsured citizens who are about to join the healthcare system. Because the Cleveland Clinic and others like it have committed to both cost reduction and patient care, these citizens have reason to believe they can get the care they desperately need.

Inder Sidhu is the Senior Vice President of Strategy & Planning for Worldwide Operations at Cisco, and the author of Doing Both: How Cisco Captures Today's Profits and Drives Tomorrow's Growth. Follow Inder on Twitter at @indersidhu.

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