he Cleveland-area community comprises six counties in northeast Ohio, and includes 2.2 million people. It extends 100 miles along the Lake Erie shore and more than 40 miles inland. Nearly two-thirds of the area’s population is concentrated in Cuyahoga County, Ohio’s largest county, where the city of Cleveland is located. Another quarter of the population lives in suburban Lake and Lorain counties, and the remainder in the rural and suburban areas of Ashtabula, Geauga and Medina counties.

The population as a whole is somewhat older than the national average, with a larger proportion of minorities. The median household income and percentage of families living below the poverty line approximate national averages. The 1995 unemployment rate was lower than the national rate.² Nonagricultural jobs are predominantly in the service (76 percent) and manufacturing (20 percent) sectors. The health sector makes up 10 percent of the employment base.³

As a community, Cleveland has some significant health problems. Age-adjusted mortality rates for cancer and ischemic heart disease are 9 percent and 25 percent higher than the national average, respectively.⁴ Infant mortality is significantly above the national average, and is higher in Cuyahoga County, where one in five live births occurred among women with no first trimester prenatal care.⁵ Health services use and capacity are relatively high. The rate of admissions and days per 1,000 population are 24 percent and 21 percent higher than national norms, respectively.⁶ The ratio of hospital beds to the population is about 22 percent higher than the national average.⁷ Local estimates hold that the area is overbedded by 40 percent, although hospital occupancy rates are comparable to the national average.⁸ The area has 25 percent more physicians per 1,000 people than the national norm (19 percent more primary care physicians and 31 percent more specialists), which is not surprising because it is a major center for medical education.⁹

THE HEALTH CARE MARKET

The market for health services is well-defined along geographic lines, with a distinct central core based in Cleveland and suburban-rural sub-markets to the east, south and west. The central core, encompassing Cleveland and nearby Cuyahoga County suburbs, has a high concentration of hospitals. Most of the city’s hospitals are located in poor or working-class urban neighborhoods, and carry significant charity care responsibilities. Several hospitals are establishing new satellite clinics in strategic urban locations. Cleveland residents reportedly are loyal to their neighborhood hospitals, and the Cuyahoga River forms an east-west demarcation line around which the dominant hospital systems appear to be developing their strategies. Physicians on the east side typically are organized in large hospital-owned and -affiliated groups, while those on the west side are more likely to be in smaller private practices.

The suburban and rural areas to the east and west are also highly oriented toward Cleveland providers, with little pull from other urban centers. Much of the specialty care for these residents is provided either in Cleveland or, increasingly, in local suburban hospitals under contract with Cleveland hospitals. A number of the Cleveland-based hospital systems have established ambulatory and urgent care clinics on the periphery of Cuyahoga County to attract patients from outlying counties. Suburban and rural populations to the south are pulled between the Akron health market and Cleveland-based systems.

Interviewees almost universally believe that Cleveland has a high-quality health care system and that the quality of medical care has remained constant or improved in recent years. Much of this perception is tied to the prestige of several major Cleveland providers. In addition, the Case Western Reserve University Medical School, which is affiliated with five local hospitals and systems (as well as the Henry Ford Health System in Detroit), is considered one of Cleveland’s health care assets. Case Western also has an agreement with the state to enroll a majority of Case Western’s students from Ohio.

In the past, health care costs were viewed as high, but these concerns have abated. According to American Hospital Association statistics, Cleveland’s rank among large cities for average cost per admission dropped from 11 to 21 between 1990 and 1994,¹⁰ and data from three employers showed 24 percent declines in premiums between 1991 and 1994.¹¹

LEADERSHIP AND DECISION MAKING

Area political and business leaders play an active role in health care issues, which they view as important to the community. Business leaders are well represented on hospital boards and they take an active interest in health system issues through several organizations, including: Cleveland Tomorrow, a business roundtable of Cleveland’s leading employers, the Health Action Council, representing large purchasers, and the Council of Small Enterprises (COSE), a purchasing cooperative of small and medium-size businesses under the auspices of the Chamber of Commerce.

In general, however, the Cleveland-area health market is driven by the city’s leading hospitals and physician groups. These are powerful institutions that shape the community’s perceptions of health care and market change.

In contrast, there appears to be some unease with insurers, particularly Ohio Blue Cross & Blue Shield, partly because of its historically dominant role and partly because of its attempted acquisition by Columbia/HCA, a national for-profit hospital company. Some interviewees believe that insurers are extracting dollars from an increasingly competitive health care market without adding value. This view has been underscored by press reports of the considerable personal gain that several Blue Cross executives stood to make from the Blues plans proposed sale.

Many respondents express hope that the Cleveland area may leap-frog the evolutionary phase that many metropolitan markets are experiencing, where price and the preponderance of a few large managed care plans are the driving factors. These observers say they would like to see Cleveland make a speedy transition to direct contracting between purchasers and large provider organizations. Few people, however, were able to cite concrete evidence to support that this will take place.

There is also a prevailing view that decisions affecting the health care sector are made informally by a small group of executive decision makers, such as hospital CEOs and business leaders who sit on hospital boards. It is widely believed that these influential personalities and their long-standing interpersonal relationships drive the emerging partnerships and competitive relationships.

A number of consumer advocacy organizations are active in the Cleveland area, but they do not appear to wield great influence on health care policy or the shape of the delivery system. Consumers do not appear to participate in their employers’ health care purchasing decisions, but purchasers reportedly are reflecting their employees’ preferences by selecting plans with broad, geographically appropriate provider networks.

Several respondents noted the absence of a consistent, collective voice for the public good on health policy issues such as excess capacity, for-profit health care acquisitions of not-for-profit institutions and the effects on clinical practice of financial incentives for physicians. The Cleveland Plain Dealer has reported extensively on issues related to the safety net, Medicaid managed care, quality of care and for-profit acquisitions. The emergence of a coalition of labor unions and other groups opposing Columbia/HCA’s acquisition of Ohio Blue Cross & Blue Shield may presage greater advocacy activity, and a local council of consumers, providers and plans has been formed as an advisory group to monitor the implementation of mandatory Medicaid managed care in Cuyahoga County.