Delos "Toby" Cosgrove discusses innovation in health care—including a key role for top executives to play in reducing the nation’s health care burden.
Brendan C. Buescher and Paul D. Mango
March 2008
As a leading medical institution in the United States, the Cleveland Clinic operates at the center of the country’s raging debate over health care. Like many peers, the clinic finds itself fighting to hold the line on costs while maintaining quality, attracting the most qualified staff, and providing access to affordable health care. But its efforts don’t stop there. Established in 1921 as a nonprofit group practice with a mission that links patient care, research, and education, the clinic has long been a crucible for experimentation and innovation.
And innovate it has, though not always without controversy. With more than 37,000 employees and annual revenues in excess of $4.4 billion, the Cleveland Clinic is leading a charge to lower the burden of disease on the country’s health care system while improving quality and patient experience. Cafeterias in the clinic’s many facilities no longer serve foods containing trans fats. Cleaning supplies have been replaced with nontoxic alternatives. What’s more, starting last September new employees aren’t allowed to smoke. Applicants are tested for nicotine, and those who test positive are provided with free smoking-cessation assistance but are not offered employment. Clinic physicians excel at technological, biomedical, and pharmacological innovation—its heart and vascular institute has been number one in the field for more than a decade. However, some observers believe that a number of these physicians have a conflict of interest.
The clinic’s CEO, Delos “Toby” Cosgrove, whose own research has produced more than 30 patents, recently sat down with McKinsey’s Brendan Buescher and Paul Mango to discuss health care in the United States, the importance of innovation as the industry globalizes, and the delicate balance among competing interests in the field. Cosgrove is not your usual executive; he spent 30 years at the clinic as a cardiac surgeon before being promoted to CEO, in 2004. Since then, he has immersed himself in the details of his new role, seeking to improve not just the clinic and the health of its patients but also their hospital experience and the future of the health care industry overall.
The Quarterly: Where do you think the US health care system is heading—and what needs to be done?
Toby Cosgrove: If you look at health care in the United States, what has caught the attention of most citizens is the cost, at around $2 trillion annually, or 16 percent of GDP. At that level, costs already affect competitiveness, so there’s a lot of concern about what will happen as those costs increase. That has led to three seismic shifts in health care.
The first is prevention. The only thing we can do to reduce costs, while still improving quality, is to reduce the burden of disease. Forty percent of the premature deaths in the United States are caused by obesity, inactivity, and smoking, all of which ought to be preventable. Two-thirds of the country is overweight and a third is obese. Over the decades I have operated on a lot of patients with lung cancer, and every one of them was a smoker. So a natural starting point is to help people stop smoking and help them lose weight.
Delos “Toby” Cosgrove
Education
Graduated with BA in history in 1962 from Williams College, Williamstown, Massachusetts
Earned MD in 1966 from the University of Virginia School of Medicine in Charlottesville
Career highlights
Cleveland Clinic (1975–present)
* President and CEO (2004–present)
Fast facts
Serves on several editorial boards, including those for American Heart Journal and Circulation
Member of 16 scientific societies, including the American College of Surgeons, the American Heart Association, and the American Association for Thoracic Surgery (for which he served as president in 2000)
Holds more than 30 patents for developing medical and clinical products used in surgical environments
Has published nearly 400 journal articles and book chapters, one book, and 17 films on training and continuing medical education
