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January 31, 2017

Toby Cosgrove on the ACA, hospitals, and Veterans Affairs

Daily Briefing

Cleveland Clinic President and CEO Toby Cosgrove in an interview with Axios' David Nather shared his thoughts on how the Affordable Care Act (ACA) has affected hospitals—for better and for worse—and his recommendations for Veterans Affairs (VA) reform.

Comments on VA

According to Nather, Cosgrove—who serves on President Trump's Strategic and Policy Forum—was under consideration to run the VA under the Trump administration. But Cosgrove said he withdrew from consideration to focus on his responsibilities in his current role. "I had to weigh that against my commitments to the Cleveland Clinic and the things that I'd started here that I needed to see through," he said.

But Cosgrove was clear on his support for giving veterans more access to private health care options outside of VA. According to Nather, Cosgrove during his time as vice chair of the Commission on Care—which studied ways to improve the VA—became convinced the VA health care system can't fully handle the needs of its patients. "They ought to have access to the private health care delivery system," Cosgrove said.

He also cited VA's decades-old EHR system. "They need to have an [EHR system] that is 21st century."

Comments on hospital consolidation

Moving forward, Cosgrove said there is a need for hospital consolidation within the health care industry overall—with a focus on partnerships and collaboration to improve outcomes and efficiencies.

For example, after the Cleveland Clinic partnered with MetroHealth System to coordinate trauma care, the mortality rate for trauma was reduced by half.

"What you need to think about is how you bring hospitals together to work as systems," Cosgrove said. "Health care has remained a cottage industry ... It really needs to consolidate, and it really needs to bring efficiencies."

But he acknowledged that there are competing forces that make consolidation difficult. "On one side of Washington, you have the [ACA] saying you've got to be more efficient. On the other side of Washington, you've got the Federal Trade Commission and the Department of Justice saying, 'Well, you know, you can't bring too many hospitals into the same system.'"

Comments on ACA

At the Cleveland Clinic, Cosgrove has had a "front-row seat" to the ACA's effect on the health care industry, Nather writes.

According to Cosgrove, some the law's hits include massive coverage gains and "gradually" improved quality metrics, such as reduced readmissions. "We needed to do something that moved us from paying for volume to paying for value," he said. "I think that was something that was really pushed hard by the ACA."

Cosgrove also pointed out that since the ACA was enacted, health care inflation has come down—although it's now on the rise again. That pattern means the law's ability to control costs "is probably open for discussion," Cosgrove said.

Touching on the law's "misses," Cosgrove said the ACA "really did not do very much" to encourage people to stay healthy. According to Nather, that might be due to the unpopularity of tobacco taxes and the lobbying power of the sugar industry in the fight against obesity.

"I think that was one of the misses, but I understand why it happened," Cosgrove said. "But I think that's one of those things you could correct going forward" (Nather, Axios, 1/26).

There's more than just M&A. Get the cheat sheet for hospital partnership and affiliation models.

Behind the flurry of M&A in recent years, a deeper trend of hospital integration is underway: the emergence of alternative partnerships that secure many of the same benefits of M&A without the financial and legal commitment: Clinical affiliation, regional collaborative, accountable care organization, and clinically integrated network.

This guide defines these types of partnerships and offers benefits, drawbacks, and examples of organizations in each.


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