In this episode of Fireside Chat, we sat down with Dr. Tom Mihaljevic, CEO of Cleveland Clinic. Dr. Mihaljevic took some time to discuss family culture, global expansion, technology in medicine, and Cleveland Clinic’s five-year plan.

Transcription

Tom Mihaljevic 0:02
I believe it is always challenging. But I think the underlying culture, the culture that attracted me to Cleveland Clinic that has been here pretty much since the inception of Cleveland Clinic has been pretty much a family culture. We’re a very egalitarian organization. And so when I stepped into my role over two years ago, it was relatively easy to articulate, articulate the ethical framework for decision making in our organization and our ethical framework that anyone can relate to is fairly simple. We treat our patients and each other like a family, and we treat Cleveland Clinic as our home.

Gary Bisbee 0:44
That was Thomas Malevich, President and CEO of Cleveland Clinic and I’m Gary Bisbee. This is Fireside Chat. Dr. Mihaljevic was responding to a question about maintaining the Cleveland clinic’s family culture in the face of its growth to 70,000 employees and medical schools. Cleveland Clinic will celebrate its 100th anniversary next year in 2021. It’s a multi hospital multi country health system and one of the US is largest. Dr. Mihaljevic grew up in Croatia and he practiced as a cardiothoracic surgeon. He’s in his second year as CEO, as you listen to the conversation, look for the three basic principles underlying the Cleveland clinic’s five year plan, including what will not change, but also for his response to the question of leadership learnings from his international experiences. Let’s join the conversation.

Well welcome, Dr. Mihaljevic. It’s good to have you here. Tom.

Tom Mihaljevic 1:39
Thank you very much.

Gary Bisbee 1:39
Appreciate your time. I know you’re exceptionally busy. So this is terrific. Well, why don’t we get right into the podcast? Could you describe the Cleveland Clinic it’s always fun to hear the CEO describe it because it’s usually different than the printed material.

Tom Mihaljevic 1:55
Well, Cleveland Clinic is a wonderful organization. So coming from a CEO who’s very bias. It is an international integrated healthcare delivery system. It is physician-led. It has always been physician-led. It is about to be 100 years old. We’re one year shy of our centennial. And it has a very unique governance model. It is being led by a physician. It has a patient in a center. And it has one mission that consists of patient care, research, and innovation. It is an increasingly large organization that we care we employ 66,000 caregivers worldwide.

Gary Bisbee 2:39
A large organization is clearly the case a lot of people don’t know. Actually, if the Cleveland Clinic was a listed company on a stock exchange, you’d basically be number 300 in the fortune 500. Which would put Cleveland Clinic the same sizes Xerox which is kind of a classic name. So, I bet when you started your career as a physician, you weren’t thinking about leading an organization the size Xerox.

Tom Mihaljevic 3:07
Yeah, I couldn’t no, definitely, definitely not. I could guarantee you that it was not …never crossed my mind.

Gary Bisbee 3:14
But I know you’ve really focused on family culture if I could use that term. And I’m wondering how difficult it is leading a large super large organization, almost 70,000 people? How tough is it to keep the family culture with that, with that large an organization?

Tom Mihaljevic 3:31
I believe it is always challenging, but I think the underlying culture, the culture that attracted me to Cleveland Clinic that has been here pretty much since the inception of Cleveland Clinic has been pretty much a family culture. We’re a very egalitarian organization. So when I stepped into my role over two years ago, it was relatively easy to articulate, articulate the ethical framework for decision making. In our organization and our ethical framework that anyone can relate to, is fairly simple. We treat our patients and each other, like a family. And we treat Cleveland Clinic as our home.

Gary Bisbee 4:12
Well, it shows as we’ve been walking around today, looking a little bit lost here and there. There are always people ready to come up and help us. So that’s terrific. Congratulations. When you think about scale Tom, it started out as basically an academic medical center and now has expanded a number of regional community hospitals. Do you have 11 in this area now? So what’s the plan there? What has been the strategy Why are you beginning to expand into the regional hospitals?

Tom Mihaljevic 4:46
Well, the reason for expansion is that not really, we do not have a business reason to expand we have more of an ethical imperative to grow. We have a conviction that most patients in this country would choose Cleveland Clinic is their care provider if they were to have access to Cleveland Clinic care. Therefore we as the caregivers have an ethical responsibility to extend Cleveland Clinic quality and, and experience of care to as many patients in need as possible. So that gets us into the five year plan, which I think you’re starting the second year of that. Can you share with us what is the five-year plan and how is it going? The plan has the strategy has three components. One component is very important. And that component defines what will not change over the next five years. We’re to have a wonderful foundation of values and principles that have served us really, really well over the past 99 years and we believe that is going to serve us well in the future. So what is not going to change at the Cleveland Clinic is that we are going to continue to be physician-led organization that is patient-centric. That has three components of mission that we look as an interchangeable component meaning Cleveland Clinic, quality care, research, and education that will never change. What we are striving to change it’s the second component of our strategies, the way that we view appropriateness of care. What we would strive when we strive to be today is to be lifelong partners for our patients and their families in their journey of wellness. Not just be there for them when they become ill. We’re obviously always going to do that. But we would like to be really integrated into their lives in a way that is meaningful to keep them well and not just treat them when they were to become ill. And lastly, we strive through the transformation of the processes of care. And through greater incorporation of digital tools in a provision of care to continue to grow and we plan to double the number of patients we serve by the end of our cycle. The strategy cycle is 2024.

Gary Bisbee 7:21
That’s a very aggressive goal. Does that include international patients?

Tom Mihaljevic 7:27
Yes, it includes our entire organization, we as an organization view, as part of our responsibilities in every location to provide the same experience and the same quality of care in every Cleveland Clinic location, whether it’s here nationally, Ohio, Nevada, Florida or internationally, Canada, United Arab Emirates, London and soon in China.

Gary Bisbee 7:51
so could you go a little bit deeper time in terms of the digital piece of that what’s examples of initiatives or innovations on a digital side

Tom Mihaljevic 8:00
Well, the digital size of Cleveland Clinic care has been present for a really really long time. We were one of the earliest adopters of now widespread and a popular electronic health medical health record, which is Epic. But we have also use digital technology to improve care across Cleveland Clinic for quite some time. Every single Intensive Care Unit bed at the Cleveland Clinic is monitored through a central location. The tele ICU the way we call it has allowed us to improve the quality experience of care and safety across our intensive care units across the nation Every single EEG is being monitored through a central location. And this is just the beginning of the story in which we are striving to develop tools that are going to allow us to extend our care to as many patients as needed. And what is wonderful about digital technology is that it is obviously not limited through geographic or geographical constraints. And we are working…we have very many active partnerships with partners in digital industry. They’re helping us to develop those tools.

I know quality and patient safety is a core tenet of the way you think about things and actually had a chance to say hi to Dr. Merlino. So he’s back now at the Cleveland Clinic. But could you share with us some of your thoughts about how quality and safety fit into your view of patient care here?

Everything that we do for our patients we view from, obviously from our provider perspective, and we understand that in order for us to earn the trust of our patients, we have to focus on that on quality of care and the safety of care. We have to earn that trust by assuring our patient The Cleveland Clinic is going to be one of the safest places to receive care anywhere. And that is a topic that we are very passionate about. We are passionate about it to the extended every single meeting and every single forum at the Cleveland Clinic is an obligatory quality and patient safety is the first topic for every meeting. And that has helped us to continuously improve the environment of safety for our patients as well as for our caregivers.

Gary Bisbee 10:31
So on the international front, if we could turn to that, the Cleveland Clinic seems to me to be a leader in the country in terms of activities internationally. What was the original motivation for the Cleveland Clinic to expand internationally?

Tom Mihaljevic 10:49
The original motivation was certainly linked to our intrinsic motivation that I mentioned before and that is that we really believe that we have an obligation to extend our care for people in need. And we have always been in a very fortunate position that we have been able to welcome very many patients from all over the world and their families who came to Cleveland, Ohio to seek their care. So obviously, coming closer to them was the next logical step. And we had started that journey quite some time ago. I personally spent a little over six years six and a half years living and working in the United Arab Emirates, as we were building Cleveland Clinic in Abu Dhabi.

Gary Bisbee 11:34
So can we see can we expect more expansion? Do you think internationally? What’s the go-forward plan?

Tom Mihaljevic 11:40
Oh, absolutely. Absolutely. What we’ve learned going internationally is that the need for coordinated, complex care, you know, the world is just immense and that we are speaking about from the angle of providers in the United States have certainly not exploited that opportunity and have not really contributed to the extent and I know that we can.

What we have also learned is that we can transform the communities and doing an immense amount of good. By having a presence internationally. We have literally transformed the lives of 10s of thousands of patients in the United Arab Emirates, b bringing Cleveland Clinic into Abu Dhabi. And yes, we will continue to grow. The largest project currently is Cleveland Clinic in London which will open in 2021, on our on our centennial. And then we are also having a partnership in China, where we are overseeing and helping manage the build and construction of two hospitals in Shanghai.

Gary Bisbee 12:56
So in London, the reading I’ve done the integration comprehensive care side seems to be a centerpiece of the London hospital. Is that right?

Tom Mihaljevic 13:07
Yes, absolutely. We’re trying to bring the best of Cleveland Clinic to London, but also to leverage the very unique advantages that London has as a hub of higher learning and a city that is filled with exceptional health care organizations and also an exceptional talent. So we do believe that we have a lot to offer, that our model of care that is multidisciplinary that is based on teamwork that is, relies heavily on a digital infrastructure and new technology will create new offerings that are going to be welcome in the United Kingdom.

Gary Bisbee 13:52
So we could turn to your background personal background for a moment, fascinating as it is. You grew up in Croatia…what point did you start thinking about medicine?

Tom Mihaljevic 14:03
I started thinking about medicine when I turned about 16 or 17 years when I was 16 or 17 years old. Yeah, growing up in Croatia back then Yugoslavia, we would then enter a medical school right out of high school. So there is no college, as college does not exist in most European countries with a few exceptions. So at the age of 16-17, I decided that medicine is a field that I’m interested in. I graduated from, from universities Zagreb, and as it happened in 1989. And then a couple of years later, the war started in in former Yugoslavia. So there were actually no educational opportunities after I graduated, so I was forced pretty much to look for the educational opportunities outside of my country.

Gary Bisbee 14:57
So it seemed like time in Switzerland time in Austria…

Tom Mihaljevic 15:00
Yeah, yeah so the journey brought me first to Austria I had to learn German in order to be able to get my first job in Switzerland. I spent four years in Zurich in Switzerland and University Hospital there, and then decided to come to the United States and was very fortunate to land at Brigham and Women’s Hospital in Boston, and even more fortunate to do a year later. Start my residency in general and then cardiac surgery. I stayed at Brigham for 10 years ultimately as a staff, and a member of the faculty of the medical school and then joined Cleveland Clinic in 2004. 16 years ago.

Gary Bisbee 15:42
So you know about the name change, of course, it’s just up there. What do you think about Mass General Brigham instead of Partners? What do you think about that as a former faculty member?

Tom Mihaljevic 15:53
Well, I’m delighted. I’m delighted to see to these two great organizations are partnering in a meaningful way. I think that my colleagues in Boston are just super. I really cherish my time there. And I always believed that the collective potential of those two organizations is far, far greater than the sum of individual potentials.

Gary Bisbee 16:17
So it’s all the time internationally. How did that influence you as a CEO?

Tom Mihaljevic 16:25
There are several learnings from our international involvement, so I’ll just mention a few that really kind of stuck with me. The first learning is, The Power of what I like to call is healthcare diplomacy. In the presence of a really exceptional academic or healthcare organization from the United States in a world is something that we haven’t utilized as a country. The amount of good did we can contribute to other societies and other communities by our presence is just immense. It’s transformational to the full sense of the world we often dance in the United States where we have an abundance of excellence in the healthcare around us do not realize how great our blessings are. The second big learning is that the world is filled with talent with people who are eager to do well and people who have a passion for being medical professionals and being caregivers. And this is the pool of talent that did that is enriched our organization.

Gary Bisbee 17:32
So if we could turn to there’s three kinds of environmental themes that I think we’re all struggling to understand and then you all that are leading health systems to react to them. One of them is government pay and the increasing amount of federal involvement. We obviously have state involvement through the Medicaid but average across our largest 100 Health Systems, 55 percent revenue is our government. Half of the baby boomers aren’t even on Medicare yet. So we expect to see that increase. How are you thinking about that here at the Cleveland Clinic?

Tom Mihaljevic 18:10
Well, the Cleveland Clinic debt base is already accelerated, given our local demographics here in Northeast Ohio as well as in the more graphics that we were serving in Florida. So I think that this is a process that we’ve anticipated for a really, really long time. And I think it’s important to take into consideration. However, I would like to say that in a healthcare debate in the United States that we are currently having. While we speak a lot about Medicare and a way to pay for health care. I do believe that there is even a greater opportunity to really speak about topics that are not addressed in a public forum. And those are the actual major determinants of the health of the nation, the quality of our hospitals, and the quality of health care in our hospitals. Has a relatively small influence in health of the nation in public health outcomes, the availability of social services, preventive services, our economic disparities, adequacy of good housing, the way that we address the mental health epidemics have a disproportionately greater influence on the health of Americans than the quality of our hospitals. So I do believe that there is a missed opportunity to speak about the issues that I believe are somewhat neglected in a public debate about how to improve the health care of America agreed

Gary Bisbee 19:40
I agree with that, and the question is, what opportunity is there for our large health systems to become involved in that debate, and try to lead actually,

Tom Mihaljevic 19:51
The opportunities are really large healthcare systems such as ours have also become the largest employers so we do have an increase or associate responsibility. And we can do a lot by advocating for what is right but also changing the way that we provide care. And I think all of us embarking on a journey to change interest from the way that we deliver care by providing more continuous care, focusing on prevention, focusing on community care, we’re changing our delivery systems as well as the tools with which we deliver care. So yes, there is a great responsibility for us to change the way that we approach healthcare but also to educate others about what matters in healthcare.

Gary Bisbee 20:35
Right. Well, given the employment, you say in all these health systems, our largest employer in their region, I think, out of the largest 100 systems, 25 of them are literally the largest employer, private employer in their states. And with the increased amount of government pay, you kind of see the system is moving to almost a Public Health utility model, which would presumably create a platform to move in the direction you said. It’ll be interesting to see you know if we can get to that point but feels like that might be a natural extension.

Tom Mihaljevic 21:15
I do believe that it would be a natural extension. I am a believer that the large healthcare systems that are fully integrated and that have good care models with the patients in the center have also the responsibility to grow. I think that we still in the United States have extremely good healthcare centers, whose reputation far exceeds the actual influence they have on the health of Americans. I would say if you were to take the top five academic medical centers in the United States, input are the populations that we serve all together, you will find out that our market share is around 2% percent of the US healthcare, which in simple terms means that one in 50 Americans will have an opportunity to access the best with us healthcare history.

Gary Bisbee 22:08
Yeah, for sure. There is a training aspect. So presumably that group, you’re talking about trains a number of ours, our physicians. What about the business model aspects of what we’re just talking about? So, smaller amounts of commercial pay, more government pay, the payer mix dynamics of demographics, and so on. So how are you thinking about the business model here at the Cleveland Clinic over the next several years?

Tom Mihaljevic 22:39
We have always, we have always been somewhat agnostic to the way that we’re being paid for healthcare. I would say that we were blessed by the fact that our original business model that it was established 99 years ago, was based on a salaried provider model. So our physicians, the vast majority of our physicians are salaried, we do not incentivize people for doing more with centralized, we actually pay people for doing what is right for our patients. We do not have tenure. Each one of us has a yearly evaluation. And so to say, if you will, value-based care has been provided at a Cleveland Clinic even before the value-based phrase was coined. So, our business model is relatively simple. And this is we always do what is right for our patients, we treat them as their family, we have never gone wrong. And whenever we continue to do what is right consistently, it seems that the finances tend to follow.

Gary Bisbee 23:47
So just moving from there to scientific innovation, a lot of talk about precision medicine, for example, is a bridge between the individual and some of the scientific innovations. How do you think about that here at the Cleveland Clinic?

Tom Mihaljevic 24:01
We’re very excited about the opportunity and we believe that air is our ability to aggregate, synthesize more patient-relevant data with the use of new technology will help us devise the treatments that are going to be tailored to an individual needs. Clearly, there are certain aspects of that type of treatment that are already in place cancer care today with immunotherapies. Genetic interventions for certain diseases do increase awareness about the importance of genomics and all omics protein omics, turbo omics, and so on. In the health of our patients is a very, very exciting field. In order for us to be able to utilize that rapidly expanding base of information and knowledge will certainly be dependent on our ability to use that data in a technology that we’ll use machine learning and artificial intelligence.

Gary Bisbee 25:03
This has been terrific. We appreciate your time. Three questions to wrap up if I could. One of them is, what’s the toughest decision you’ve had to make as CEO?

Tom Mihaljevic 25:14
The toughest decisions for anyone? I see. I’ll speak for myself. Obviously, the toughest decision I have ever had to make in my CEO tenure was when I had to make a personnel change or let someone go, who’s a dear friend, but it was not fitting for the role.

Gary Bisbee 25:31
That has to be hard. That one sticks with you, doesn’t it? Never forget that one. Second question. So what’s the most important leadership lesson you’ve learned through your career?

Tom Mihaljevic 25:42
I think in leadership, there are still a number of different lessons, but I think one has to be to him or herself. I think that we have to develop a certain degree of comfort around our own authenticity as an individual. And because if we’re not true to yourself, I don’t think that we’ll be able to be effective as people in, and as leaders in communication with others.

Gary Bisbee 26:11
Well said. Third, & last question. In terms of the US health system, you’ve got this marvelous perspective of really looking at it from a number of different models. What’s the best part of the US health system do you think?

Tom Mihaljevic 26:27
I do believe that we here in the United States have by far the best hospital care of any country. The excellence of our top academic medical centers is just unparalleled. So I’m immensely enthusiastic about that piece. That’s is what has brought so many people like me here to this country, and degree of innovation, dedication, work ethic. And in just a wonderful, wonderful pool of talent that we have in this profession is unparalleled. So yeah, I’m an enthusiastic supporter of the work that we do here in the United States.

Gary Bisbee 27:14
Tom, thank you so much for your time today. Just terrific. You’re a great leader here at the Cleveland Clinic. Appreciate it.

Tom Mihaljevic 27:20
Thank you very much.

Gary Bisbee 27:23
This episode of fireside chat is produced by Strafire. Please subscribe to Fireside Chat on Apple podcasts or wherever you’re listening right now. Be sure to rate and review fireside chat so we can continue to explore key issues with innovative and dynamic healthcare leaders. In addition to subscribing and rating, we have found that podcasts are known through word of mouth. We appreciate your spreading the word to friends for those who might be interested. Fireside Chat is brought to you from our nation’s capital in Washington DC, where we explore the intersection of healthcare politics, financing, and delivery. For additional perspectives on health policy and To read my weekly blog Bisby’s brief for questions and suggestions about fireside chat, contact me through our website, fireside chat podcast dot com or Gary at hm Academy dot com. Thanks for listening.

Transcribed by Otter