The President's Prototype: CEO Dr. Toby Cosgrove on What Cleveland Clinic Does Differently

Cleveland Clinic CEO Delos "Toby" Cosgrove, MD, recently shared what traits have made the world-renowned system a prototype of modern healthcare — and one explicitly hailed by our president — in a Business Insider report.

Cleveland Clinic was mentioned in presidential debates this past fall when President Barack Obama called it "one of the best healthcare systems in the world," as it provides great care at less-than-average costs. Dr. Cosgrove is well aware of the attention and praise his system has received, as well as the pressure that comes along with being an exemplar.

At a White House event two years ago, Dr. Cosgrove was the last of nine hospital system CEOs to speak about his system. "I'm the last guy to talk, and I described our system, how we're integrated and how we're all employed. And everybody says, 'Oh we couldn't do that.' I said, 'Wait a minute, guys. How many of you would like to have that system?' Everybody raised their hand," Dr. Cosgrove said in the report.

At Cleveland Clinic, all physicians are salaried, have one-year contracts and undergo annual professional reviews. There is no tenure. The one-year contracts extend to the C-suite, too: Dr. Cosgrove has had 37 one-year contracts during his time with Cleveland Clinic.

In reviews, physicians and management go over individual contributions to the organization and decide whether the physician will be reappointed. If so, decisions about salary follow. This is an innovative practice in healthcare, according to Dr. Cosgrove, who said he doesn't know of another institution with annual professional reviews and one-year contracts. Traditionally, "you got privileges at a hospital, and they were yours for life unless you committed murder or something," he said in the report.

Cleveland Clinic bucked the orthodox organization of specialties and departments, what Dr. Cosgrove calls a "guild system" that has persisted in medicine for years. In one year, Cleveland Clinic got rid of its departments of surgery and medicine and instead adopted an institute system. For example, every clinician who deals with the human neurologic system was placed within a neurologic institute, which has one head. "So if you go in for your headache, you can see, there in one location, everybody who you could potentially need to see," Dr. Cosgrove said in the report.

Interestingly, overhauling the system's organizational structure — and doing it all within one year — did not spur as much conflict as one might expect. "Nobody came to me and said that's a terrible idea, not one person, but everybody was anxious. And nobody has come to me and said we have to go back. So everybody could see the value of doing it," Dr. Cosgrove said in the report.

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