Cleveland Clinic CEO warns of $200M loss in 2022
Cleveland Clinic CEO and President Tom Mihaljevic, MD, gave the healthcare organization’s State of the Clinic speech on Jan. 18, sharing optimism for the company’s future despite a $200 million loss in 2022.
Mihaljevic projected the net operating loss for last year, noting that more than half of hospitals lost money in 2022 due to labor shortages and associated higher wages, as well as inflation impacting supply and pharmaceutical costs. The net loss was revealed by Mihaljevic, who also spoke of the larger challenges across the healthcare industry. Fortunately, the worst impacts of the COVID-19 pandemic appear to be behind Cleveland Clinic, which operates 22 hospitals and more than 220 outpatient facilities.
“In recent years, when I reviewed our accomplishments, we were gripped by winter surges of COVID-19,” Mihaljevic told Cleveland Clinic’s 77,000 caregivers worldwide via a virtual address. “It is comforting to begin the New Year on a healthier footing.”
Mihaljevic also touched on the global healthcare workforce challenges, noting that the COVID-19 pandemic had a huge strain on healthcare staff, leading to higher rates of burnout, early retirement and a shortage of two million workers in the field. In response to this industry challenge, Cleveland Clinic boasted it provides a benefit package with added incentives, such as bonuses for nurses referrals. The healthcare operator is the largest employer in Ohio and hired more than 1,600 new caregivers who live in Cleveland in 2022.
With such a large presence in Ohio, Cleveland Clinic is also focused on improving health equity, according to Mihaljevic. The company has spent $50 million to remove lead paint from homes in Cleveland, as well as focused on building affordable apartments in the Fairfax neighborhood. In addition, Cleveland Clinic has partnered with other community organizations to address food needs and worked to ensure that Black babies and their mothers have an equal chance at healthy lives through its Center for Infant and Maternal Care.
“We are coming closer to addressing the root causes of unequal health,” Mihaljevic said in his speech. “When caring for a healthy community, medical care only contributes to a small portion. There are other factors, such as employment, environment, education and personal behaviors.”
Mihaljevic was also optimistic about Cleveland Clinic’s efforts despite the financial woes of 2022.
“I have full trust that we will come out of these times even stronger,” he said. “We have been able to fulfill our mission for more than 100 years – despite wars, recessions, pandemics and the tragic fire of 1929 on our campus. Cleveland Clinic is persistent in good times and in hard times. We stay true to our goals, even when it is most difficult, and have never compromised our care.”
The net loss for the year is not a surprise after Cleveland Clinic reported significant losses in revenue throughout the year.
Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."