What you need to know about the forces reshaping our industry.


April 6, 2017

Cleveland Clinic CEO: 3 ways to make health care cost less

Daily Briefing

    By Josh Zeitlin, Editor

    Cleveland Clinic CEO Toby Cosgrove on Wednesday said he thinks the Affordable Care Act (ACA) is largely here to stay—but that lawmakers and regulators can take concrete steps to make the U.S. health care system more efficient and less costly, including allowing more consolidation among providers.

    Cosgrove weighed in on the state of health care during a panel discussion moderated by Axios CEO Jim VandeHei and NBC News Political Director Chuck Todd.

    Cosgrove: ACA repeal would put hospitals in 'financial trouble'

    Todd noted that Cosgrove predicted in January that because of a lack of consensus on health care among GOP lawmakers, Congress would keep "70 to 90 percent of the ACA as it is now, and change portions of it."

    Cosgrove on Wednesday said he stood by that prediction. "I think it's very hard to begin to take away coverage from 14 million or 20 million people," he said. "Over time, it's I think politically very difficult to swallow."

    He also said an ACA repeal bill that led to millions more uninsured Americans would hurt hospital finances. "If you look at hospitals across the United States last year, 52% of them lost money on operations," Cosgrove said. If the uninsured rate increases, he added, "you're going to have a lot of hospitals that are in financial trouble across the country."

    3 ways Cosgrove says the US can bring down health costs

    Cosgrove said the ACA "really came about because of the inflating cost of health care," and that while the law has increased coverage and improved quality metrics, "we've seen the [health] inflation rate come down but then start to go up again."

    The cost problem is one facing "every country in the world," he said, for two reasons: "We have an increasingly aging population, and we have more things we can do for people."

    Still, Cosgrove offered three ways to reduce the cost of health care.

    1. Decrease the burden of disease in the United States

    Cosgrove said, "We are never going to control the cost of health care if we don't decrease the things that are driving up the cost, which are chronic diseases—obesity, smoking, lack of exercise." He said lawmakers should focus more of their attention on ways to reduce the prevalence of chronic conditions, which he said would likely receive bipartisan support.

    2. Allow more consolidation among providers

    Consolidation among health care providers is a contentious topic, as some stakeholders argue efficiencies from consolidation can bring down costs, while others contend that consolidation tends to lead to higher prices.

    Cosgrove on Wednesday described consolidation as a key way to "improve the efficiency of looking after sick people" and reduce costs.

    There are significant technological and back office expenses to running a health care system, from the finance and HR staff to health IT support, he noted. And he suggested the Federal Trade Commission and Justice Department need to "ease off" some to allow systems "to begin to consolidate hospitals to be able to get the efficiency that bookstores ... and lawyers" and other industries have gotten by consolidating back-office support.

    Cosgrove also said consolidation would allow more hospitals to specialize, rather than trying to offer all the services that every patient needs. "We have to realize that not all hospitals can be all things to all people, and we have to have a system that allows people to move and drive the efficiency of the health care delivery system," he said.

    3. Improve telehealth regulation

    Cosgrove said that lawmakers should take steps to make telehealth regulation less onerous. "Right now we have to license doctors in 50 states in order to" provide telehealth services across the country, he said.

    Under a more streamlined regulatory approach, systems could better remote care for patients while they remained in their homes or in nursing facilities without them "ever coming to the hospital," which he said would improve the quality of care and bring down costs.

    Moving in 'the right direction'

    Cosgrove also called for lawmakers to take steps to reduce drug costs and bring down what he called a "tremendous" legislative burden. "We've had 14,000 pages of regulations come down ... in the last two years," he said.

    As for what the future will hold for hospitals and health systems, Cosgrove said that he still expects there to be modifications to the ACA, and that there "should be modifications." Ultimately, however, he believes the U.S. is "headed in the right direction [on health care], particularly as we move from volume to value. That is going to change health care across the country." 

    Get our best practices for implementing telehealth programs

    Join our population health experts for a webconference on April 25 to get the latest updates on the current state of the telehealth market, get guidance on common planning pitfalls to avoid, and see how leading provider organizations have managed to achieve success using virtual care delivery platforms.

    Register now

    Have a Question?


    Ask our experts a question on any topic in health care by visiting our member portal, AskAdvisory.