With two months still left in the year, Cleveland Clinic Indian River Hospital hopes to take a giant leap toward profitability by the end of 2025 after three previous years of losses totaling more than $175 million.
Dr. Richard Rothman, the Vero hospital’s vice president and chief medical officer, told the Indian River County Hospital District last week he expects to cut 2024’s losses of $48 million in half when all the numbers are tallied for 2025.
And by December, Rothman said, he expects the entire hospital operation to be at break-even on a month-over-month accounting basis.
At least one department of the hospital, the Behavioral Health Center, hit the break-even point this past summer. In previous years, “that was a $4 million loss,” he said.
The annual October report is a requirement of the partnership between Cleveland Clinic and the Hospital District. Not only is the Hospital District Cleveland Clinic’s landlord in its 75-year lease of the hospital buildings and land; the district also provides roughly $5 million per year in taxpayer money to support prenatal care for indigent patients, and behavioral health services for adults and children.
Rothman explained that a big part of his plan to move out of the red was adding caregivers to the staff – specifically doctors in high-demand specialties like cardiology and hematology-oncology – to improve the bottom line by treating more local patients.
Rothman has brought back numerous physicians – who left after the 2019 takeover – either as staff or as independent doctors with hospital privileges.
“Our caregivers touched many lives. In 2024, more than half a million people were seen at the Cleveland Clinic Indian River Hospital,” Rothman said. “The hospital completed all of its clinical service offerings in 2024, and continues to refine these service offerings to meet the needs of the community. In addition, the hospital provided more than $20 million in charity care to residents of the county that needed it most.”
The hospital as a whole recently edged past the local school district’s nearly 2,300 employees to become the largest employer in the county with more than 2,500 employees.
Hospital District Trustee Chair Dr. Bill Cooney pointed out that Cleveland Clinic has increased the number of employees by roughly 1,000 caregivers since taking over the hospital.
“If you think about the services that we’re providing, the more complex services require a significant increase in the number of specialized individuals to provide those services,” Rothman said.
The other part of the turnaround plan has focused on providing services for a cost that approaches the Medicare reimbursement rate for those services, since around 70 percent of Cleveland Clinic Indian River Hospital patients are seniors covered by Medicare.
With another 12 percent of patients being Medicaid recipients or uninsured, that leaves only 18 percent of patients with private insurance through their employers or health insurance purchased in the marketplace.
“From 2019 to 2024, the Cleveland Clinic has invested nearly $300 million in operations and facility improvements to ensure we have a sustainable healthcare delivery system for the residents of Indian River County,” Rothman said. “Our total capital expenditures for 2024 amounted to approximately $30 million.”
The first phase of the Emergency Department renovation is now complete, with phase two of the $18 million project getting underway in January. By the end of this year, Cleveland Clinic will unveil its $7 million renovated Labor and Delivery Unit, and it will soon begin a $90 million build of a new storm-hardened power plant for the aging hospital.
“A $2.5 million cardiac catheterization lab is in progress to go up, adding the second cardiac catheterization lab and the only labs capable of doing transaortic valve replacements, a minimally invasive way of replacing a valve. We performed more than 120 of those procedures over the last 12 months,” Rothman said.
The Hospital District’s Cooney, in the question-and-answer portion of the meeting, said: “Tell us about the housing that your Cleveland Clinic is developing in our county here and what the plans for that would be.”
“Cleveland Clinic is in the process of working through the RFP as you guys are so familiar with in your line of work to source the right teams to come in and help to build houses that our workforce can afford,” Rothman said of a vacant parcel on U.S. 1 that was donated to the Cleveland Clinic Foundation.
“And our workforce includes our teachers, police officers, and members of the Cleveland Clinic caregiver workforce. We’re still in the process of that RFP and we hope to have more news for this group over the coming months.”
