Cleveland Clinic

In Fort Lauderdale, gasoline is 10 to 15 cents cheaper than you can find it in Southwest Florida. Why? Doubtless, a higher level of competition has driven the cost downward. Now for the first time in Collier County, a second major healthcare provider is coming to town. The new provider, the Cleveland Clinic Naples, adds both a new element of competition and a different way of practicing medicine. In principal this should improve overall quality of care and reduce the cost of care. But, providing high quality, low cost healthcare solutions in our community is more complex than dropping the price of gas at the pump.

The issue of competing Collier County health care providers came to a head this spring, when Collier's sole hospital organization NCH Healthcare System, sought to block Cleveland Clinic Florida, an offspring of the well-known Cleveland Clinic in Ohio, from building an acute care hospital to be known as Cleveland Clinic Hospital Naples. The two sides came to an agreement hours before litigation was to occur.

The Cleveland Clinic Florida, headquartered in Fort Lauderdale since the late 1980s, is entering the Southwest Florida market with a $22 million facility now under construction off Pine Ridge Road at the northeast corner of the I-75 interchange.

 

The 185,000 square-foot facility will consist of a four-story medical office complex connected to a two-story outpatient surgery and diagnostic center. Clinic representatives say the facility will be completed in March 1999. Construction on a 70-bed outpatient hospital is expected to begin on the same site this fall, with a completion date in spring 2000. Design plans for the hospital have not yet been released.

Naples Today: One Good Provider

Naples has been a one-provider town since the first Naples Community Hospital opened in 1956 with 50 beds. But Naples is no longer a small town, and NCH is now much more than a community hospital. Today, NCH Healthcare System is a medical powerhouse with two hospitals (the Naples Community Hospital and North Collier Hospital), numerous outpatient facilities, 400 affiliated doctors and 1,000 affiliated nurses. Its 1997 unrestricted revenues grew significantly to $253 million from $211 in the previous year. Its assets climbed to $89 million -- up $7.4 million from 1996. More than 23,000 patients were admitted in 1997, and NCH has the capacity for advanced procedures -- 462 open-heart procedures were performed in 1997.

In spite of the absence of serious healthcare competition, Naples residents have largely been fortunate in the quality of care provided through the NCH system. In fact, NCH is accredited with commendation and is highly rated in numerous areas of medical practice. Clearly, the Naples Community Hospital system has many enthusiastic fans in Naples, Collier and surrounding communities. Arguably, the care available in a county with 200,000 residents is superior to most communities of comparable size.

That said, even many NCH loyalists welcome the arrival of the Cleveland Clinic because they anticipate significant cost and quality benefits from a more competitive healthcare environment.

NCH Concerns About the Cleveland Clinic

As a realist, NCH Chief Financial Officer Ed Morton acknowledges, "We should not be petulant about change. Change and the community's desire for choice and the maturing of the community needs to be recognized."

However, Morton says he does not feel there is an overwhelming need for additional facilities in the community. "Since we are talking about taking care of the same patient, whether they are cared for at a Cleveland Clinic facility or an NCH facility, the number of patients is not likely to go up so that we will wind up with capital redundancy," he says. "We are not talking about a net increase in business."

Morton voices another concern about how Collier's charity care will be handled. "The concerns that we have had all along have less to do with the coming of the Cleveland Clinic and more to do with how we make sure that every provider in our community takes its fair share of the uncompensated care burden," he says, adding that finding an appropriate formula to allocate charitable care responsibilities between NCH and the Clinic was a major sticking point in arriving at an agreement with the Clinic.

The other specter raised by Morton is that healthcare may be sent out of the community because of the Clinic's agreement with the Columbia Healthcare System. "We do have some concerns about the exclusive partnership between the Cleveland Clinic and the Columbia Healthcare System to exclusively refer out of our community patients that they themselves cannot care for in their facility," he says. "The exporting of patients and revenues will not have a beneficial impact on our Collier economy."

In sum, NCH worries that:

1. There is no real need for another provider.

2. There will be a net economic negative because some healthcare will be exported to Lee County.

3. There may be an imbalance in charitable care provided by NCH and the Cleveland Clinic.

Is There Really a Need for the Cleveland Clinic Naples?

Not surprisingly, the perspective of the Cleveland Clinic differs significantly from that of the Naples Community Hospital. As a starting point, Clinic Florida CEO Dr. Harry Moon says simply, "Is another hospital needed? Of course it is."

Moon stresses that the Cleveland Clinic conducted a significant amount of research before deciding to enter the market. He also points out that Collier had fewer doctors per capita in areas such as family practice and internal medicine than most counties in Florida. He emphasizes the difficulty of obtaining care in the winter season, noting that the NCH Intensive Care Unit facility was at more than 100 percent utilization during that period.

Florida's Agency for Health Care Administration (ACHA) supported the Clinic's perspective. Once the agreement between NCH and the Clinic had been signed, ACHA's Director Douglas M. Cook stated, "The results of this agreement will be enhanced quality of care, expanded services to children, and more affordable health care for consumers. This agreement clearly addresses the public's desire for choice and accessible health care."

In effect, Naples Community Hospital has conceded the need for more patient facilities. In its agreement with the Clinic, it carefully protects its ability to add 30 beds to its North Collier Hospital in the next few years. Separately, in the agreement NCH indicated that facility already operates at 80 percent capacity year round.

Apples and Oranges: Different Models of Medicine

One of the difficulties sorting out the issues surrounding the arrival of the Cleveland Clinic is the uniqueness of its group practice model. As a result, discussions often devolve into hopeless apples and oranges comparisons.