Cleveland Clinic sees record patient visits, narrow operating margin in 2024

Cleveland Clinic served the largest number of patients in its history in 2024 with more than 15 million patient encounters worldwide, generating nearly $16 billion in revenue and ending the year with a 1.7% operating margin. 

The year-end findings come from the annual State of the Clinic address made by CEO and President Tom Mihaljevic, M.D., on Jan. 27. 

"Years have passed since the COVID-19 pandemic and healthcare has not recovered. Today, about 40% of U.S. hospitals continue to lose money," Dr. Mihaljevic said. "In the past, we could predict Cleveland Clinic's financial health based on our productivity and expense management, but even that has changed."

Dr. Mihaljevic noted that despite the handling of more than 15 million patient encounters, the health system's 1.7%  operating margin fell short of its anticipated 2.7%. He attributed this shortfall to new financial pressures, including unexpected increase in charity care totaling $370 million, surging cost of malpractice insurance and rising costs of drugs due to smaller discounts on medications. 

"Many of our peers have not been able to withstand these pressures," he said. "We are doing well by comparison because of demand for our services and because we continuously innovate the delivery of care." 

For comparison, as of November, the median calendar year-to-date operating margin for hospitals was 4.6%, according to Kaufman Hall's monthly report, which includes data from more than 1,300 hospitals.

Despite these financial challenges, Cleveland Clinic continued to expand in 2024. It opened a new cancer pavilion at its Hillcrest Hospital in Mayfield Heights, Ohio; refined an expansion of its Cole Eye building on the flagship campus, set to open in February; and plans to expand the hours and use of its outpatient settings on nights and weekends in 2025.

The Cleveland Clinic employs over 83,000 people, and according to Dr. Mihaljevic, its turnover and vacancy rates are lower than the national averages. He attributes this to a workplace culture that prioritizes and rewards caregivers with top-tier benefits and competitive compensation.

Dr. Mihaljevic has led Cleveland Clinic as president and CEO since 2018. His address can be found in full here.

 

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