Administrative costs rise nearly 900% in 12 years?

Beginning in 2001, financial statements for Lakewood Hospital Association introduced a line for “Administrative services” costs. Starting at $2.4 million in 2001, these costs balloon to more than twenty-four million dollars in 2013. Save Lakewood Hospital has questioned high fees paid by LHA to the Cleveland Clinic for operating Lakewood Hospital, before, but the exact progression of this line item through 14 years should be sobering reading for everyone interested in Lakewood’s future:

2001: $2,479,000
2002: $2,970,000
2003: $3,459,000
2004: $5,925,000
2005: $6,093,000
2006: $7,349,000
2007: $10,887,000
2008: $14,864,000
2009: $15,083,000
2010: $20,727,000
2011: $23,810,000
2012: $23,043,000
2013: $24,438,000
2014: $24,305,000

Curiously, the bill for these Administrative services has ballooned fastest through those years which, the LHA and City of Lakewood have complained, Lakewood Hospital has been losing money owing to declining activity. It’s also worth noting that between 2008 and 2014, alone, the LHA paid $146 million for Administrative services—more than the entire predicted cost of building Cleveland Clinic’s new Avon hospital from the ground up.

Yet the nature of these expenses remains unexplained and unquestioned by the same LHA trustees and city administrators consistently asserting that Lakewood Hospital is financially unviable.

Lakewood Hospital and Lakewood deserve better stewardship than this.

Note: audited financial statements for 2009, 2010, 2011, 2012, 2013 and 2014 are available from the City of Lakewood’s web site. Earlier statements have been released, by city Law Director Kevin Butler, in connection with a taxpayers’ lawsuit; please see this PDF with 2001 and 2002 Administrative services costs as comparison.