CLEVELAND, Ohio - The Cleveland Clinic achieved a 35 percent increase in operating income in 2017, rebounding to $328 million after a major drop to $243 million the previous year, according to numbers released Wednesday.
Figures still remain shy of the record high $481 million the Clinic recorded in 2015, but CEO Dr. Tom Mihaljevic is optimistic the system will continue its upward trajectory thanks to its efforts to improve efficiency. The Clinic's operating margin in 2017 was 3.9 percent, compared to 3 percent the previous year.
"We have to do financially well to do good," Mihaljevic said in an interview with reporters after his first State of the Clinic address this morning, committing the system to "responsible growth." Mihaljevic took over as CEO and president of the Clinic on Jan. 1.
He pointed to the $800 million the Clinic has cut from its budget the past few years, a portion of which came from the MyTwoCents program, an employee-driven process improvement effort.
"We've worked more efficiently and gotten bigger," former Clinic CEO Toby Cosgrove said after the event, noting the success of the Clinic's expansion into Abu Dhabi. The Middle East accounts for 41 percent of the system's international patients.
The Clinic also plans to open a new 200-room hospital in London in 2021, which will be the Clinic's centennial anniversary.
Cleveland Clinic's London hospital to open in early 2021
"On that date, we will have made a remarkable journey, from a four-story outpatient clinic on Euclid Avenue to the back yard of Buckingham Palace," Mihaljevic said.
Despite the Clinic's international growth, the system remains committed to Cleveland and its "grit," Mihaljevic said.
"Everything that we do internationally comes back to Cleveland. Our global brand places the name 'Cleveland' in the most vibrant and dynamic cities on earth," Mihaljevic said.
The Clinic is the largest employer locally and is the second largest in the state. In 2017, its market share in Cuyahoga County grew to 47 percent, the highest in about six years.