HealthLeaders-InterStudy, a leading provider of managed care industry intelligence, finds that recent cooperation between the Cleveland Clinic Health System and University Hospitals Health System (UHHS) owes more to market financial instability and less to collaborative good will. According to the latest issue of the Cleveland Market Overview, UHHS, under new leadership, has stabilized its finances after years of losses and is embarking on an expansion plan that will lead to renewed healthcare provider competition in the Cleveland area.
"This may be deja vu, a repetition of financially debilitating events of a decade ago," said Patrick Powers, HealthLeaders-InterStudy senior analyst. "Back then, health system competition led to aggressive overexpansion that contributed to UHHS', and even Cleveland Clinic's, recent financial challenges. Given that you're not seeing significant population growth in the region, outside Medina County and a few other areas, the current expansion may be risky financially. Without a growing population, it's hard to justify the capital expenses of facility construction."
In January 2006, UHHS announced a five-year, billion-dollar expansion plan that includes the construction of a freestanding cancer center and new outpatient centers in Twinsburg and Aurora, suburbs in an area southeast of Cleveland that, demonstrating UHHS' foresight, has a population growth justifying the new projects. At the same time, building in this area puts it in competition with Akron-based Summa Health System, which is allied with the Cleveland Clinic System, as well as with Akron General Hospital.
Other news about the Cleveland healthcare market: * Greater Cleveland Medicare eligibles can choose between eight health plans offering 36 Medicare Advantage plans, and 19 companies offering 43 stand-alone prescription drug plans. * High malpractice rates continue to challenge Cleveland area physicians. For an OB/GYN, Columbus malpractice premiums are 55 percent of Cleveland's, and Cincinnati's are 39 percent. About Market Overviews
Market Overviews provides a detailed analysis of local healthcare markets, allowing healthcare businesses to plan their local strategies.
HealthLeaders-InterStudy, a company of Decision Resources, Inc. (http://www.decisionresources.com/), is the authoritative source for managed care data, analysis, and news. For more information, please visit http://www.healthleaders-interstudy.com/.
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