Executive Interview: Delos Cosgrove, M.D.

Medical innovator leads Cleveland Clinic into the future

Delos Cosgrove, M.D., has been CEO of Cleveland Clinic since October 2004. He joined the clinic in 1975 and was chairman of the Department of Thoracic and Cardiovascular Surgery prior to becoming CEO.

A cardiothoracic surgeon, Cosgrove has performed more than 20,000 cardiac surgical procedures, and he is noted for his work minimally invasive valve repair and replacement. He has filed 18 patents for medical devices, including the Cosgrove Mitral Valve Retractor, the Stentless Aortic Valve, the Low Velocity Aortic Cannula and the Cosgrove-Baxter Annuloplasty System for use in valve repairs.

A 1962 graduate of Williams College in Williamstown, Mass., (for which he serves as a trustee) Cosgrove received his medical degree from the University of Virginia School of Medicine in Charlottesville and completed his clinical training at Massachusetts General Hospital, Boston Children’s Hospital and Brook General Hospital in London.

Given Cosgrove’s experience developing medical devices, perhaps it is no surprise that he serves on the boards of three medical device companies: AtriCure Inc. in Cincinnati, which is developing alternatives to tissue ablation during surgery; Novare Surgical Systems in Cupertino, Calif., which makes atraumatic surgical clamps for cardiac and vascular surgery; and Corazon Technologies in Menlo Park, Calif., developer of devices to manage calcific cardiovascular disease during beating heart procedures.

Given his interest in medical innovation, Cosgrove is a perfect fit to lead Cleveland Clinic, which devotes a substantial amount of time and resources to research. The Lerner Research Institute oversees more than 1,500 clinical and basic research activities funded with revenues of $150 million, mostly from external grants and contracts.

Among the issues recently studied or currently under study at the clinic are:

  • The effectiveness of a new drug in protecting nerves from injury during prostate removal
  • The use of adult stem cells to treat multiple sclerosis
  • The identification of a gene that regulates blood vessel formation
  • A new cataract removal treatment that uses a jet of warm saline instead of ultrasound energy
  • Identification of the first gene to be confirmed as a cause of coronary heart disease
  • The use of synthetic HDL cholesterol to remove plaque from coronary arteries
  • Ongoing work in the field of Parkinson’s disease and other neurological disorders in the clinic’s soon-to-be-opened Brain Neuromodulation Center
  • Studies of medical problems experienced during long-term space flight at the Clinic’s Center for Space Medicine.

Partly as an outgrowth of its research activities, Cleveland Clinic actively develops or supports the development of new medical devices and procedures. For two years in a row, it has been the site of a Medical Innovation Summit, attracting industry executives, entrepreneurs, investors and clinicians to discuss trends and technologies in medicine. The clinic also sponsors a venture capital investment firm, Foundation Medical Partners in Rowayton, Conn., which is focused solely on healthcare products and procedures.

Cleveland Clinic provides healthcare not only to residents of Ohio, but also to people around the world. Formed in 1921, the clinic today is the second-largest medical group practice in the world. It includes a 1,058-bed hospital (including the Children’s Hospital), a 12-story outpatient building, the Cleveland Clinic Educational Foundation and Lerner Research Institute. In 2002, the Clinic recorded 2.5 million outpatient visits and 52,000 hospital admissions. About 1,100 full-time physicians and scientists and 800 house staff/fellows provide patient care.

In 1997, the clinic formalized the Cleveland Clinic Health System, a partnership with a number of community hospitals in Ohio. In addition, it operates two hospitals in Florida: Cleveland Clinic Hospital Naples and the Cleveland Clinic Hospital in Weston, which it operates under a joint partnership with Tenet South Florida HealthSystem.

Cleveland Clinic aggressively courts international patients. Through its International Center, the clinic helps patients from different countries schedule medical appointments, secure lodging and arrange for interpretation or translation. It also provides assistance with hospital admissions and financial transactions. The clinic has offices in Argentina, Canada, Cayman Islands, Costa Rica, Dominican Republic, Guatemala and Kuwait to help patients in those countries learn more about resources the clinic offers.

The Journal of Healthcare Contracting: When did you discover that you are dyslexic, and how has it affected your life and work?

Delos Cosgrove, M.D.: I didn’t know I was dyslexic until I was 33 years old. I went all the way through medical school without knowing it. Then when I was a resident in Boston, I was dating a schoolteacher who noticed I couldn’t read out loud. In college, I had a language requirement. Naively, I decided to take French. I managed three “D-minuses” and a “D” in remedial French. My recurring nightmare is that I don’t quite make it through that final semester, and I have to return all my degrees.

JHC: How has your life and work changed since becoming CEO of Cleveland Clinic? For example, do you continue to perform surgery?

Cosgrove: I haven’t given up my practice completely. I did an aortic valve replacement this morning. But I used to do four or five cases a day; now, it’s four or five a week.

The biggest difference for me now is that the end points in cardiac surgery are very immediate; there’s a beginning, a middle and an end, and they all happen in a few hours. The problems I’m dealing with now (as CEO) have an ending, if I’m lucky, in three or four months.

JHC: Earlier this year, you gave a presentation at the Arab Health Exhibition and Congress 2005 on “The Innovation Imperative,” during which you focused on the importance of enterprise-wide innovation as the only long-term strategy for maintaining quality in healthcare. Can you explain the concept and how Cleveland Clinic is attempting to implement it?

Cosgrove: It’s an important concept both for U.S. medicine as well as those of us at Cleveland Clinic. If you stop and think about it, years ago, you couldn’t go out in the summertime in public places because of the fear of polio. I had friends who dragged around iron braces, who lived in iron lungs, and who died of polio. Innovation has changed the landscape enormously.

Look at all the diseases that used to kill people, (like) typhoid, influenza, polio and infectious diseases. But those have been wiped out in the last century. Deaths from heart disease are down 40 percent in the last 40 years, all because of things we’ve learned. From a healthcare perspective and economic perspective, it’s much better to treat someone with a few drops of polio vaccine, as opposed to supporting them for life in an iron lung.

If we’re going to improve the quality of life, we have to figure out new ways to improve the quantity and quality of life, not just ways to patch things up.

We have to shift the conversation to one that involves more than counting dollars. We have to talk about quality. We’re just now gaining the ability to quantify that term. We’ve worked at it for 30 years in cardiac surgery. We can give you chapter and verse on quality – predictors of infection, incidence of strokes, predictors of stroke – all these things. As we’ve learned these things, we have learned to improve quality. We’re trying to get value for what we spend on healthcare. But you can’t do that until you determine cost and quality.

We’re starting to see two things occur. The first is that in today’s age of consumerism, people are beginning to look for measurements of quality. They want to know they’re getting top-quality care. Second, pay-for-performance is being talked about more. That is, paying [caregivers] more for improved quality.

JHC: How do you feel about pay-for-performance?

Cosgrove: There should be experiments along these lines. Mark McClellan (administrator of the Centers for Medicare and Medicaid Services and former commissioner of the Food and Drug Administration) told me that [CMS] is instituting various projects to determine whether the government can improve quality and pay for it. Yes, I think you have to begin to try to do it. You have to have some economic incentives. I don’t think [improved quality] will happen if you simply tell people, “It’s a good thing to do.”

JHC: How would a pay-for-performance plan work?

Cosgrove: In England, for example, caregivers of diabetic patients get paid a certain amount more each year if their patients’ cholesterol is checked, their eyes are checked for retinal changes, etc. As you do these things, you begin to see fewer admissions to the hospital and fewer complications. There have been similar experiments in the United States.

JHC: Isn’t this what managed care was supposed to do?

Cosgrove: The incentives of managed care were such that people weren’t incentivized to provide quality care.

JHC: What has your personal experience developing new medical devices taught you about bringing innovation and technologies to market? What’s the future for medical innovation in this country?

Cosgrove: Bringing medical innovation to market today is not easy. It’s a long project. It requires, first of all, an idea, then a working prototype. Then someone has to find someone to finance or manufacture it. Then you have to go through the FDA. If it’s a procedure or a device with a cost associated with it, you have to get approval from Medicare or Medicaid. Then you have to get it out in the market to ensure that it works not just in your hands, but also in thousands of other peoples’ hands. And you have to demonstrate its efficacy. Each is a step along the way, and you can get hung up on any one of them. The government has inserted a lot of regulations that make the hurdles tougher to jump.

That said, the process is easier today than it was 25 years ago. Today, people realize the possibility of reaping financial rewards by taking a product to market. And the investment community is there to support these things, too. Plus, the whole medical industry has grown enormously. In 1970, maybe 50,000 heart valve procedures were done in the United States. Now, there are about 120,000.

JHC: Any recommendations on how the process of bringing medical innovation to market could be improved?

Cosgrove: Traditionally, doctors have not been the most creative people. You went to college, where you took prescribed courses; then medical school, where you memorized things; then your residency training, where you did what your professor taught you to do. Then you got out and found that the best thing is to stick to the tried-and-true ways of practicing medicine, lest you stray and wind up with a malpractice suit.

However, people are beginning to recognize that you can stimulate the creative, innovative process. As time goes by, people will become increasingly aware of this.

JHC: As a surgeon, have you had to make concessions to economic realities and, as CEO, do you have to convince your colleagues to do the same?

Cosgrove: We met that issue head-on at Cleveland Clinic about 15 years ago, when we had 10 cardiac surgeons on staff. Cardiac surgeons can be fairly strong willed. We had 1,400 different items in our storeroom. So we went through them all and were able to eliminate 500. We began to standardize across our group. We eventually settled on two packs, which came to the OR all prepared. You opened up one pack, and it had everything for the heart/lung machine. The other had everything that went on the table: catheters, drapes, scrub solutions and standard disposables. That allowed us to standardize our whole operation, which was good for everyone involved. It took a fair amount of political capital to do.

This is a continual process. There is such a thing as product creep. All kinds of things creep in all over the place. You need to periodically clean out your attic.

JHC: You’ve talked about medical innovation on one hand, and product creep on the other. How do you separate worthwhile innovation from less-than-valuable innovation?

Cosgrove: We have a network of cardiac surgeons at different hospitals working with us on this. Rather than having each of five hospitals trying out [the technology], we try them all out here in Cleveland, and then give our recommendations across the system. This gives them the opportunity to take advantage of the experience we have here, and we save them time as well. Then we can do group purchasing, which allows us to enjoy the maximum benefit of our huge volume.

JHC: What’s the biggest competitive threat facing Cleveland Clinic?

Cosgrove: Healthcare is a cyclical business, because the government, through Medicare, pays for such a large portion of it. As soon as hospitals figure out the Medicare system, the government again takes a big bite out of reimbursement. Then we have to start all over again.

Five years ago, many hospitals were in the red. Now, many are emerging from that distressing situation. But my expectation is that the government will reduce reimbursement again, which will bring more distress to hospitals.

JHC: Do you think it’s out of line that healthcare accounts for somewhere around 14 percent of the nation’s gross domestic product (GDP)? Do you think Americans are getting their money’s worth for the dollars spent on healthcare?

Cosgrove: How much is it worth to keep your mother alive? There are a lot of ways to look at this. You have to consider quality of life and length of life.

The Lasker Foundation produced a report that said over the last 30 years, 50 percent of the GDP growth was related to improvements in length of life. Looked at that way, it doesn’t seem that 14 percent of the GDP is too big a price to pay. And that doesn’t include the jobs associated with healthcare or the pharmaceutical companies. These are huge industries, which contribute to the economy.

So I don’t think healthcare is a drain on the economy. It’s a positive contributor. People live longer, they consume more, they pay taxes, they contribute to society. Those are the byproducts of our investment.

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