The role of organizational design and culture in the value-based healthcare movement: The case of the Cleveland Clinic

The Cleveland Clinic was founded in 1921 as a multi-specialty group practice staffed and run by four physicians who had served in a military hospital in France during World War I. The four men—Drs. Crile, Lower, Bunts, and Philips—were inspired by a vision of a healthcare system in which physicians “acted as a unit,” collaborating in ways that departed radically from the back-then norm of fiercely independent and competitive physicians and practices. In so doing, the Cleveland Clinic challenged the status quo of physicians as “heroic lone healers.”1

Over the next 101 years, the collaborative vision that gave rise to the Clinic evolved into a nonprofit healthcare system made up of 22 hospitals and 275 outpatient facilities around the globe, including Cleveland Clinic hospitals in Abu Dhabi and London. The Main Campus in Cleveland today has some 1300 hospital beds where patients are treated by over 3000 physicians supported by 40,000 other caregivers, including 11,000 nurses. In aggregate, the Clinic now employs over 77,000 caregivers worldwide—a group that includes more than 5500 physicians and scientists, 3500 advanced practice providers, 2000 trainees, and 15,000 nurses. In 2022, this group of 77,000 treated 3.4 million patients with distinction.2 The Cleveland Clinic has consistently been ranked as a top hospital in US News and World Report rankings, with many top-ranked specialties. For example, the Clinic has been ranked #1 in the category of Cardiology and Heart & Vascular Surgery in all 29 years the rankings have been undertaken.

The stellar rankings and performance of the Clinic have also received national recognition, perhaps most memorably during President Obama's much-publicized trip to Cleveland in 2012, when the Clinic's practices and accomplishments were held up as a model for American healthcare. The Clinic's reputation owes importantly to its ongoing commitment to continuous improvement in carrying out its three-part mission of “caring for life, researching for health, and educating those who serve.” One such improvement was a fundamental and innovative transformation of the Clinic's organizational structure, or “org chart,” in 2008.

Until 2008, the Clinic was organized, like most hospitals (and colleges and their medical schools), into separate “departments” corresponding to their special areas of expertise—departments of Surgery, Internal Medicine, Neurology, and so forth. This departmental organization is a traditional structure that reflects the guild-like nature of medical training, and the bond of common experience shared by physicians working in the same specialties. Departments (or divisions) are further broken down into medical subspecialties such as Cardiology, Nephrology, Rheumatology, and Gastroenterology, and the surgical specialties of Cardiovascular Surgery, Urology, Orthopedics, and other disease-oriented surgical disciplines.

This traditional structure of guild-based departments was completely revamped in 2008 under the direction of the Clinic's then-CEO and President, Dr. Toby Cosgrove. After joining the Clinic in 1975 and becoming chairman of its Department of Thoracic and Cardiovascular Surgery in 1989, Cosgrove was appointed CEO in 2004 (a position he held until his retirement in 2017). Early in 2008—and just weeks before one of the present writers joined the Clinic as head of its Cardiac Electrophysiology section—all the departments were reorganized and replaced by 22 new “Institutes” dedicated to serving the Clinic's three-part mission of patient care, medical research, and continuing education of caregivers.

Reinforcing such resistance to change were “powerful forces,” including “the inertia and the temptation to continue doing things the way they've always been done.” “After all,” as Cosgrove stated, “the Clinic was already one of the most successful hospitals in the world, so if it wasn't broke, why fix it?”

In the pages that follow, we attempt to explain why this embrace of the Institute model in 2008—which Cosgrove said in his 2014 book that the Cleveland Clinic “has pushed further than any organization”—should be viewed as a critical new phase in the Clinic's continuous development toward becoming the increasingly “patient-focused” value-based healthcare institution that its four founders envisioned in 1921. As further testimony to its ongoing commitment to ensuring that its structure supports its tri-partite mission as fully as possible, the Clinic is currently in the midst of yet another revision of the Institute model. (The goal of this new operating model, which we discuss in more detail later, is to strengthen the Clinic's ability not only to provide the globally uniform patient outcomes and experience for which it has achieved international renown, but to extend those assurances to all its “caregivers”—nurses and trainees as well as physicians and scientists4—and their local communities throughout the Clinic's many global sites of care. The perennial goal is to be the best place to receive care and the best place to work in health care anywhere. This new operating model, still being implemented at this writing, is organized around current CEO Dr. Tom Mihaljevic's commitment to meeting the requirements of what the Clinic now identifies as its four “cares”: (1) patients, (2) caregivers, (3) the community, and (4) the organization.

As Cosgrove also acknowledges in his book, this vision of value-based care, and the “Institute model” designed and put in place to carry it out, was being advocated by the likes of Harvard Business School's strategy guru, Michael Porter. With Cosgrove's and the Clinic's possible debt to Porter in mind (though the influence was likely reciprocal and mutually reinforcing), our explanation begins with a brief review of the six major tenets of Porter's concept of value-based healthcare delivery and shows how each has informed the practices of the Clinic. In so doing, we draw on the standard doctrine that an organization's structure should be designed to deliver on its mission and strategy. Finally, the case of the Clinic is used to show how an organization's “culture”—as reflected in its shared values and norms—depends upon and is reinforced by its structure while contributing to its success and staying power.

In Porter's concept, value-based healthcare—the quest for the best possible patient outcomes delivered by a system with the lowest possible cost—has six main elements.5 First and most important is the reorganizing of traditional (or “legacy”) hospital and healthcare systems away from separate competitive departments based on physician specialties and into integrated practice units (or IPUs) centered on patients’ medical conditions. Such a reorganization was accomplished in the Clinic's decision in 2008 to replace all its existing departments with new Institutes. As noted above, the rationale for such change begins with the recognition that cardiologists and cardiac surgeons ought to work more collaboratively since they treat the same diseases and often share the same patients. The Clinic's Institute model was intended to reduce potential barriers to collaboration resulting from physicians working within different Departments.

This transition to Institutes makes it possible and helps facilitate the second key element of Porter's framework, which is to compile detailed information about patient outcomes (in all stages of treatment) and all the associated costs.

Expanded record-keeping and measurement in turn provide a much more reliable basis for the third element: the replacement of fee-for-services by “bundled” pricing. As Porter notes, the practice of “capitation”—which might be described as the first generation of bundled pricing—has been around and increasing for decades; but without IPUs and the information made possible by them, capitation pricing itself is not likely to be accurate or effective in allocating resources across the system.

Such reorganization and monitoring of outcomes and costs are also consistent with, and supported by, two other elements: increased specialization by hospital systems in their areas of expertise and comparative advantage; and expansion of the systems’ geographic reach. The increasing size, specialization, and geographic spread of hospital systems like the Clinic are all seen by Porter as working together to achieve what he calls the “virtuous cycle of volumes” in which growing expertise ends up improving outcomes and reducing overall cost.

Another reason bigger is likely to be better for some healthcare systems concerns the role of size in increasing the accuracy of assessments of the costs (and financial risks) of providing bundled services. Smaller referring hospitals may have less experience with (and therefore less confidence when) assessing the specific financial risks associated with complex conditions with multiple co-morbidities, prolonged hospitalizations, and readmissions than the larger institutions to which such patients are referred. In general, Porter notes that their greater precision in predicting variables such as the number of days in intensive care, risk of readmission, and long-term outcomes in cases involving such “high-risk” patients will advantage healthcare systems. Any redesign of our hospitals and healthcare system must try to harmonize the interests of all its major stakeholders. Patients need to be taken care of, as do hospitals, healthcare providers, and third-party payers. Accurate modeling of outcomes and costs is needed to achieve this goal.6

Less clear, however, is the role of public disclosure in value-based healthcare, at least in its present early stages.7 One less widely expressed concern about our healthcare system is the natural tendency of physicians whose outcomes are being tracked to refer more high-risk patients to other centers to burnish their own track records. The fact that published outcomes may not be risk-adjusted goes a long way in explaining the paradox that many of our leading medical centers do not report the best outcomes and costs. Simply put, crude measures (those making no attempt to adjust for risk) of outcomes may be worse because the patients they care for are sicker.

So, while there are clearly good reasons for hospitals and individual physicians to put information about their outcomes and costs in the public domain, this practice has a clear potential downside—unwarranted transfers of high-risk patients from one center to another mainly to pad the hospitals or its individual physicians’ published outcome statistics. The net effect of all this is to distort and undermine the informative value of the statistics themselves.8

If the limits of this kind of information are not readily apparent to most patients and “retail” consumers of healthcare, such limits are very well understood by hospital administrators and the health insurers that provide much of the financial backing for the U.S. healthcare system. It is largely because of the uncertainty and the associated potential for distortion that surrounds this risk adjustment process that bundled care focuses mainly on the standard care for a typical patient. The models used to estimate bundled costs for high-risk patients are still evolving. In the meantime, hospitals like the Clinic with a disproportionate number of such patients face the challenge of bundling the cost of care while being adequately compensated.9 To be sure, national payers like the Centers for Medicare and Medicaid Services (CMS) do risk-adjust payments for Medicare Advantage plans based on the patient's demographics and health status in the medical records. But this is just a first step toward what Porter envisions as a more cost-effective U.S. healthcare system.

The sixth and final element of Porter's model is to build an integrated information technology (IT) platform that helps healthcare systems to better measure outcomes and, where necessary, rethink and restructure the delivery of care. This will be difficult to achieve without standard data definitions and elements that include medical notes, images, and laboratory reports from the electronic medical record (EMR).10 The overall architecture should not only serve as a medical record, but also be designed to yield measures of outcomes, process, and costs for each patient and medical condition. These are all moving targets that have been made possible by continuous progress and improvements in treatments and reductions in costs. Moreover, such a technology platform must be designed to facilitate communication and provide accurate comparisons of outcomes and costs between organizations. Hospitals are working toward these goals, but there is a long way to go and change will require a very large investment of capital—both human and financial.

Advanced computing systems and artificial intelligence hold out the promise for managing massive amounts of data in real time. As one example, the Cleveland Clinic has recently entered into collaboration with IBM to use quantum computing and artificial intelligence for clinical research on treating medical disorders such as cancer, Alzheimer's disease, and diabetes.11 These kinds of sophisticated IT systems are likely to prove useful in predicting risk-adjusted outcomes and costs more accurately and efficiently, which, in turn, should provide the basis for identifying the most cost-effective care pathways.

In the context of the Clinic's mission and its strategy for achieving it—both formulated in keeping with Porter's vision of value-based healthcare—we now show how the Clinic's organization has been designed to complement and reinforce that mission and strategy.

Drawing on the concept of “organizational architecture” (featured in the article immediately preceding this one),12 this discussion will focus mainly on two important aspects of large organizations: (1) who gets to make what decisions (as determined by how the lines of reporting are drawn across and throughout the organization), and (2) how performance at all levels of the organization is evaluated and rewarded.

To start with, the Cleveland Clinic has always been and remains a physician-led organization dedicated to its three-part mission of clinical care, research, and education—one that is formally stated as “caring for life, researching for health, and educating those who serve.” The Clinic's vision, or what might today be called its “corporate purpose,” is to be the undisputed “best place to receive care anywhere.” Its “patients first” mantra captures and drives that mission.

The Clinic's CEO is—and has long been required by its bylaws to be—a physician who also serves as President of the Board of Directors.13 The role and responsibilities of the Board are to oversee and ensure the execution of the mission, including fiduciary oversight. To this end, the Board approves budgets for both ongoing operations and other strategic projects and initiatives that, in 2022, produced a total operating revenue of roughly $13 billion.14

The Clinic's Organizational Chart. From 2008 until quite recently, the Cleveland Clinic had been organized into 22 clinical Institutes that include Departments of related medical specialties. This structure was introduced to encourage physicians within each of these departments and centers to collaborate with a singular focus on patient-centered care.

Consider, for example, the Clinic's globally renowned Heart, Vascular and Thoracic Institute, which consists of Departments of Cardiology, Cardiac Surgery, Vascular Surgery, and Thoracic Surgery. Existing alongside and cutting across the boundaries of these four Departments are the Institute's 46 specialty centers for diseases staffed by physicians from different departments within the Institute. Examples include centers for adult congenital heart disease, valvular heart disease, coronary artery disease, heart rhythm disorders, and cancers involving the chest. The purpose of such centers is to foster multidisciplinary collaboration that works to overcome barriers between the disciplines.

The Clinic's Annual Professional and Performance Review (APR) Process. Reporting directly to the CEO is another physician designated the Chief of Staff, who is charged with overseeing the entire medical staff, including matters of ongoing performance assessment. Ultimately, it is the Chief of Staff's responsibility to help set and oversee standards and address concerns about professional skills, performance, and behavior.

Since its inception, the Clinic has been distinguished by its physician leadership (working in close collaboration with administrative leaders), 1-year appointments for all faculty (called “Staff”), and a salaried model that deliberately avoids the use of formula-based salary incentives. Among its other effects, this system is designed to ensure that clinical decisions about treating specific patients, ordering tests, or recommending procedures or surgical operations are made based on optimal clinical care and without any consideration of the financial impact on the institution or the physician's remuneration.

In carrying out this goal, the Clinic has also been distinguished by the persistence and intensity of its emphasis on collaboration and teamwork, both between and within “specialties.” Most physicians are not directly involved in the business side of the practice, which helps ensure that their primary consideration is the well-being of their patients.

The Annual Professional Review or APR, is a process of near legendary thoroughness in which each Staff physician annually engages in discussion with her or his respective leaders about professional and personal goals, and the alignment of these goals with institutional priorities, for the forthcoming year. The conversations are informed by data that describe the Staff physician's clinical work, quality, research, and educational activities as applicable. Specific data elements are used for evaluating most or all of the following aspects of a given physician's performance: clinical quality of care and productivity; scholarship and academic activity (including grants and papers); educational roles and performance (including teaching assessments from learners like graduate trainees and medical students); leadership in professional organizations; service to the community; contributions to administration or committee assignments at the Cleveland Clinic; and finally, collegiality and professional behavior. The APR requires face-to-face meetings for each physician with the Department and Institute Chairs, as well as a meeting with a member of the Medical Executive Committee (MEC), which is comprised of physicians elected by the physician staff. The MEC member interviews with the Staff under review are designed to increase the Clinic's understanding of and appreciation for each Staff member's experience of the Institute, the Clinic, and the Institute Chair.

What's more, the Chair of each of the Clinic's Institutes presents her/his APR to the Clinic's CEO and MEC. During such presentations (which summarize each Institute's contributions to the Clinic's mission), questions are directed to the Chairs, after which the MEC member who interviewed all Institute Staff reports to the MEC the major themes emerging from the individual Staff interviews (with all identities erased). The Chair's performance, as reflected in the APR presentation, determines whether his or her leadership role is renewed.

The APR is very time-intensive; at a time when the Clinic Staff was roughly a third of its current size (then about 1,700), a total of 7100 person-hours were allocated to the APR process annually.15 The size of this time commitment bespeaks the perceived value of the APR process, to the Clinic's leadership and its Staff alike. The APR process is widely viewed as “the fabric” that binds the culture of the Clinic's group practice.

Using Information Technology to Evaluate Patient Outcomes.  From its start, the Cleveland Clinic has also distinguished itself as a data-driven organization that has dedicated substantial resources to tracking measures of quality outcomes. These metrics from each Institute have been published annually and are publicly available online. Among the metrics of greatest general interest are clinical volumes, “raw” (as opposed to risk-adjusted) outcomes and complication rates, and long-term follow-up as available. Few healthcare organizations have matched the Clinic's commitment to understanding the effectiveness of its treatments and to making this information available to its stakeholders and the general public.

The ultimate purpose of such record-keeping is to provide a highly developed information system that serves as a catalyst for quality improvement. The underlying premise is that physicians who see their results will be both better informed and motivated to improve. Annual reports also serve to inform patients and their referring physicians about the Cleveland Clinic's outcomes for specific conditions. Such information also guides physicians’ efforts to collaborate more effectively in ways that benefit patients, and healthcare practice and performance generally—for example, by developing clinical care pathways that improve outcomes, reduce readmission rates, and otherwise work to contain costs.

Until the recent changes in the Clinic's org chart, the integrity of the quality data registries and quality improvement program was maintained and overseen by a separate and independent group, the Clinic's Quality and Patient Safety Institute.

Research at the Cleveland Clinic. At the Clinic, medical innovation is viewed as “ideas that have been put to work.”16 In 2022, the Clinic received $154 million in awards from the National Institutes of Health, and over $400 million of total outside research funding for basic science, translational science, and clinical investigations. The Clinic invests over $420 million in research and education annually and has more than 3600 active research projects. Though not all physicians are engaged in research, nearly all work collaboratively with clinical investigators and physician-scientists. All Institutes are well represented by both clinical investigators and translational and basic scientists. The results of these investigations are published extensively in high-impact, peer-reviewed journals, and many Clinic physicians present their work in national and international forums that foster innovation and continuing medical education.

The Cleveland Clinic's Education Programs. The Clinic's Education Institute has always been central to its overall mission. The Institute currently consists of 11 “centers.” Along with one dedicated to graduate medical education and another to continuing medical education, the Institute also includes the Cleveland Clinic Lerner College of Medicine as well as centers for Simulation and Advanced Skills, Health Professions Education, and International Medical Education. This structure works to integrate education with the rest of the Clinic's activities in a way designed to accomplish the Education Institute's three main goals: preparing future caregivers; ensuring the continuity of the Clinic's talent pipeline; and maintaining, harmonizing, and “systematizing” its education standards and practices across all global sites. As a measure of its extensive and global impact, in 2023 alone the Education Institute recorded over four million “education encounters” around the world.

Working together with the Clinic's Mandel Leadership and Learning Institute, the Education Institute also helps develop physician leaders to deal with the challenges of healthcare. Spurred by its recognition that healthcare leadership competencies are different from clinical and scientific ones, the Clinic's deep commitment to developing healthcare leadership began more than two decades ago with a course called Leading in Health Care.17 The course invited joint participation by physicians, nurses, and administrators all learning together. During a series of ten full-day sessions distributed over a 10-month period, interdisciplinary teams were invited to generate ideas, and then formal proposals, for implementing specific innovations at the Clinic. The concrete deliverable at the end of the course was a fully vetted business plan for the proposed innovation that was presented to the Clinic's leadership at the final session.

As one indicator of the success and value of this leadership course, it has served as an effective innovation incubator. After the first offering of the course, over 60% of the proposed business plans resulted in one of two constructive outcomes—either the plan was actually implemented, or “a bad idea” was quickly dispatched. In its 10-year follow-up reviews, the Clinic has found that over 40% of the course's physician participants have in fact been promoted to leadership positions at the Clinic.18

Also worth noting, before the onset of the Covid pandemic in March 2020, the Clinic also offered one-to-two-week immersive leadership development training programs to outside visitors in the Executive Visitors Program and the Samson Global Leadership Academy (SGLA). During its decade of offerings, the SGLA welcomed over 188 executives from 26 countries.19 In the post-pandemic era, the Samson Global Leadership Academy is now being offered in international settings like the 2024 Arab Health Meeting.

In keeping with the priority of patient experience at the Clinic, communication and empathetic care are seen as key parts of its educational offerings. For example, in 2011 a new program was implemented to improve the patient experience. All 43,000 then members of the Clinic's Main Campus were taken offline on weekdays to attend a session called Communicate with HEART (Hear, Empathize, Apologize, Respond, Thank). The goal was to enhance caring for patients and fellow caregivers in ways intended to make them feel “as if they are family.”

As another demonstration of its concern about the patient experience, the Clinic gives great attention to the look and feel of its building and spaces, with artwork, vistas, and open spaces designed to promote healing. Patients’ voices are encouraged through frequent feedback invitations, surveys, and patient focus groups.20 And to help patients and visitors navigate their way around its large campus, the Clinic engages people it calls Redcoats as “greeters” to provide directions and otherwise orient patients, finding wheelchairs when needed, and otherwise facilitate visits.

While physicians are understandably focused on treating illness, the Clinic has long recognized the ways that “healthcare” goes beyond just “sick care.” The Wellness and Preventive Medicine Institute was established to provide outpatient services that educate people about healthy choices to reduce the risk of disease. At the same time, the Clinic has also recognized that, to lead by example, disease prevention should include efforts to encourage model behavior by Clinic caregivers. Smoking is banned on the campus; and under Dr. Cosgrove's leadership, the Clinic implemented the testing of prospective employees for active smoking (with urine nicotine testing) and offered free smoking cessation programs. Not smoking is a condition of employment.

And there has been a significant financial payoff from the Clinic's investment in its caregivers’ health and well-being. For every dollar spent on tobacco prevention, the Clinic estimates it has realized $4 in healthcare savings, reducing its health insurance costs by $36 million just by not hiring smokers. Similarly, financial incentives such as reduced health insurance premiums are offered to caregivers to encourage employees to exercise and lose weight (including free access to Weight Watchers and gym memberships). Sugary drinks and trans fats have been removed from cafeterias and vending machines. The net effect of these and other wellness-promoting measures has been that the Clinic's employee healthcare costs were reduced by an estimated $15 million between 2010 and 2013.

As much as the Clinic aims to provide a supportive working environment for its employees, it is not surprising that work in healthcare in general, and perhaps especially at busy institutions like the Clinic that care disproportionately for complex patients, can be intense and stressful, predisposing caregivers to the epidemic of “burnout” in healthcare. Clinic leadership is highly mindful of this risk and various strategies have been implemented to mitigate stress. Among them are greater provisions for the use of new technologies such as voice transcription in the electronic medical record, increased reliance on “scribes” to help physicians document outpatient visits, and a number of fairly new “Caring for Caregiver” services such as improved communication, support programs, work flexibility, and recognition of teamwork and outstanding service. Though it would be naive to conclude that these efforts address all challenges, or that no patient comes away frustrated or disappointed by their experience, the Clinic's performance and dedication to safety and quality over the past century reflect the importance of setting high goals and committing to continuous improvement in all aspects of the organization.

As mentioned at the outset, in the past year (2023), the Clinic has begun to implement a new “operating model”—a model that, as formulated and put in place by CEO Dr. Tom Mihaljevic, redefines the organization's view of its own success in terms of its effectiveness in meeting the requirements of what the Clinic has now come to see as its four main “cares”: (1) patients; (2) caregivers; (3) the community; and (4) the organization (as reflected in its commitment to reinvest all revenues beyond expenses with the aim of extending its high level of service to as many people as possible). As evidence of such change, one needs to look only at the Clinic's 2022 Annual Report, which devotes almost equal space to its efforts to address each of the four cares. Such a rethinking and restatement of the Clinic's commitments and (some of its) operating objectives can be seen as strengthening its ability to provide not only the best possible patient outcomes, but also greater safeguards and a more rewarding experience for caregivers, and more meaningful contributions to the local communities where Clinic facilities are housed and operate.

The outbreak of Covid-19 in 2020, with its unprecedented stresses on healthcare systems everywhere, would appear to be the most obvious impetus for the Clinic's change in its operating model. However, the expansion of “stakeholder” commitments reflected in the Clinic's new model can also be viewed as part of the more general Environmental, Social, and Business Governance (ESG) and sustainability movements that were set in motion well over a decade ago. Such movements have attracted their share of zealots—and partly as a result of them, political opponents. The good news, however, is that a striking number of America's most widely admired (and highly valued) public companies have demonstrated their ability to increase their long-run efficiency and value while—and arguably by—stepping up their investments in employees and local communities.21

Our prediction for the Clinic's new model is much the same: the benefits to the organization from committing to and carrying through on such investments are likely to be substantial. By reinforcing and even enlarging the Clinic's reputation for treating its patients (and now its caregivers and communities) well, the Clinic is likely to become even more effective in bringing about the virtuous cycle envisioned by Porter. Demand for its services and its global reputation and impact will continue to grow, as will its contributions to its communities, philanthropic support for its research and its other activities, and even the accolades offered by future US Presidents and other world leaders. What organization could object to, or refuse to embrace, these prospects?

The Clinic's reputation for having a collaborative culture invites the question: “How is this different from what goes on inside other large, highly regarded healthcare systems?” After all, most if not all other leading medical centers profess much the same commitment to providing outstanding care while also embracing cutting-edge clinical methods.

In addition to its being physician-led and committed to its founders’ vision of “acting as a unit,” the Clinic's culture is distinctive for its persistent emphasis on teamwork. And that emphasis, as we have seen, is reinforced both by the Clinic's Annual Professional Review process and by an integrated organizational structure led by a single CEO that encompasses, under a “single roof,” a system of hospitals, a medical school, research facilities, and outpatient practices. And owing to its much-publicized successes and accomplishments, the Clinic's integrated model has helped it continue to attract physicians who share its aspirations and values.

At the Clinic's Main Campus, which is its largest component, all physicians are employed and salaried as noted above. This longstanding practice offers a stark contrast to many other institutions, including academic centers, where what might be called the “incorporation of physicians” is a fairly recent phenomenon. As recently as 2005, fewer than 5% of American doctors worked in group practices of 50 or more. This trend has changed dramatically since then thanks to financial pressures that have led to the consolidation of healthcare facilities and the acquisition of many physician practices by hospital systems. According to a survey conducted by the American Medical Association in 2020, although 44% of physicians identified themselves as “self-employed,” 40% said they worked either directly for a hospital or for a practice that was partially owned by a hospital.22 In certain specialties like cardiology that are hospital-based, the number is much higher.

What is more, to the extent that physicians prefer the autonomy and freedom of private practice to working within large healthcare systems, many of today's healthcare organizations are likely to find themselves less successful in recruiting and retaining physicians than long-established systems like the Cleveland Clinic, Mayo Clinic, and Kaiser Permanente of California.

And there is growing evidence that the Clinic's insistence on remaining a physician-led institution may be working to reassure physicians.23 Along with studies showing a clear association between physician-led and top-ranked healthcare institutions, one analysis of top-ranked hospitals among US News and World Report-ranked institutions even finds physician leadership to have the highest positive correlation with an institution's ranking status.24 Other studies have been consistent in showing the benefits of teamwork among physicians for enhanced clinical outcomes.25 As one example, one analysis reported finding that the more team training undertaken by surgical teams, the lower the surgical mortality.26

In light of such evidence, the Clinic's emphasis on teamwork and “acting as a unit” should be seen as a deeply embedded cultural feature—one that continues to drive the quality of its patient care more than a century since its founders first established the Clinic. As already noted, the Clinic's collaborative culture has long strengthened its ability to attract and retain committed and talented caregivers at all levels. As just one indicator, annual turnover rates among physicians at the Clinic's Main Campus have consistently been well below 7% (and industry averages), with most departures related to personal or family factors or recruitment to leadership roles elsewhere. In the recent past, Clinic physicians have assumed CEO positions at major medical centers that include Inova (in Virginia), Intermountain Health, Guthrie Clinic, and Lahey Clinic.

In summary, the Clinic's mature and distinctive culture has long served as a powerful attractor and retainer of talent among caregivers who share its values and its commitment to patient care. In this sense, the Clinic's culture is rightly viewed as a key contributor to its extraordinary performance and the well-deserved global recognition of its standing among the world's best academic medical centers.

As much as digital systems have already affected the way care is delivered and monitored to date (e.g., in electronic medical records, digital imaging systems, and data tracking), the advent of AI promises to radically revamp clinical practice and care systems. AI is already working to increase the value of diagnostic tools like those that identify pathologic conditions in imaging and in biopsy interpretation (as in breast imaging and tumor recognition) as well as informing treatment options to advance personalized healthcare (say, in determining specific cancer treatments).27

Artificial intelligence will also help physicians respond to another challenge—keeping up with the explosive rate of increase in medical knowledge. Whereas a physician in the early 20th century might have seen only modest changes over a lifetime of practice, today's existing stock of medical knowledge is estimated to double every 72 days.28

The prospect of harnessing the power of AI for adaptive and just-in-time learning holds out the promise of helping healthcare providers address the herculean task of maintaining their currency in specialized medical knowledge. For this reason alone, progressive healthcare systems should be cultivating expertise in AI, both by facilitating the access of its caregivers to emerging AI technologies in order to spur innovation and by developing strategic partnerships with leading AI engines. The Clinic is clearly doing so, as exemplified by its entry into a 10-year partnership with IBM to develop a Discovery Accelerator. The collaboration involves embedding a quantum computer on the Clinic's campus and engagement with IBM to offer sophisticated curricula focused on AI and quantum computing to Clinic caregivers.

The IBM Quantum System ONE was installed at the Clinic in March 2023 and is the first quantum computer in the world to be dedicated to healthcare research with the aim of accelerating biomedical discoveries. Among its many anticipated benefits are accelerated development of drugs targeting specific proteins, more accurate prediction models for cardiovascular risk, more effective treatments for Alzheimer's, and more precise characterization of genetic risk factors for disease.

In this article, the case of the Cleveland Clinic has been used to explore the potential contributions of a large organization's design and culture to its success in a challenging environment. As highlighted in these pages, critical elements of the Clinic's success include its emphasis on “acting as a unit”; full integration as a system (including all clinical facilities, the research and the education missions); nimbleness and ability to innovate decisively around the core of a “patients first” north star (as exemplified by the migration to Institutes and the current operating model reorganization); a commitment to being both physician-led and to training physicians and other caregivers in leadership competencies; and intensive efforts to ensure alignment between physicians’ individual professional goals and organizational mission through time-honored processes like the Annual Professional Review. These features have worked together to create an environment that helps the Clinic both recruit and retain top medical talent.

In the current dynamic healthcare environment, the willingness and ability to adapt to sweeping change are mission-critical for large healthcare organizations. The Cleveland Clinic's extraordinary performance is attributable in no small part to decisions about its own organizational design that were intended to sustain its collaborative culture. The Clinic would be indistinguishable from other hospital systems if its only accomplishments were to meet annual budgets, manage a large volume of patients, or fund new buildings. Instead, the Clinic's distinctive culture and organizational structure have helped and can be expected to continue helping, its physician leaders carry out its three-part mission of patient care, education, and research. And in so doing, they will continue to contribute to a vision of the future in which the Clinic leads other healthcare organizations in delivering better patient outcomes at lower overall costs (including caregiver burnout)—in Wayne Gretzky's words, “skating to where the puck is going, not where it has been.”