CHS partnering with Cleveland Clinic

Organizations will share clinical, operational know-how across networks with 22,000 doctors

Community Health Systems has signed a strategic alliance with the Cleveland Clinic that calls for the two organizations to share clinical and operational data with the aim of improving quality and adding services.

The partnership is essentially an exclusive and wide-ranging consulting arrangement, with fees flowing in both directions. CHS execs will get access to Cleveland Clinic's expertise in clinical integration, data reporting and predictive modeling and have the chance to add cardiovascular services at a number of its hospitals. In turn, the Franklin-based company will share some of the tools it has used to improve its patient quality measures 20 straight quarters, said Chairman, President and CEO Wayne Smith.

The entities' alignment doesn't involve any equity, and CHS will devote financial and human resources to the project as individual projects develop. Smith said the first year of the partnership will involve setting up programs at three to five test sites before rolling out programs to CHS' more than 130 hospitals around the country. The opportunity to scale the collaboration in areas such as drug research, he added, and boost quality measures on a wide scale is very attractive. Cleveland Clinic has about 5,000 doctors in its network, while CHS offers some 17,000.

"Size does matter now. We looked at a lot of different people and they looked at a lot of different people," Smith said. "We came to the same conclusion."

Teaming up with the nonprofit Cleveland Clinic like this wouldn't have happened without health care reform, Smith added. As to whether the collaboration could be widened to include an insurance partner — building the alliance into something that would look a lot like an accountable care organization — he said that's an option down the road.

"When you put those two together, it could develop into something where we might take some risk," he said. "There's a lot of innovation and creativity that will come along here."

The scale of the deal with CHS is unprecedented for Cleveland Clinic officials, too. Since 1994, the well-known organization has signed partnership agreements covering cardiac, neurology and cancer services with 16 hospitals around the country.

Shares of CHS (Ticker: CYH) closed Monday trading at $43.37, up 1 percent on the day. Year to date, they have increased more than 40 percent.