University Hospitals CEO Dr. Cliff Megerian on the system’s financial turnaround

Cleveland - It’s taken a great deal of work, but University Hospitals in Ohio has engineered an impressive financial turnaround.

In 2025, University Hospitals recorded an operating margin of 2.6%, its first positive operating margin in years, and the system had $192 million in operating income, according to its annual report.

Dr. Cliff A. Megerian, the chief executive officer of University Hospitals, spoke with Chief Healthcare Executive® about the rebound and the system’s efforts to improve access for patients. He talked about the strategies that led to better revenues and reduced expenses.

While Megerian said there were a number of factors that led to the improved financial performance, he said the key was an “exceedingly disciplined approach to expense management, but also revenue growth.”

Megerian points to team meetings that took place on a weekly basis devoted to expense management, and separate weekly meetings on revenue growth.

“We dived really deep in stopping doing things that we don't need to do,” Megerian says. “The good news is we didn't curtail any clinical activity. We became more efficient.”

Megerian cites the use of artificial intelligence across the system to find more efficiencies. He pointed to the transition to Epic’s electronic health record system to improve revenue cycle management.

Revenues improved by nearly $15 million to $20 million per week, he says, while the system reduced its expenses by around $100 million. The health system sold outpatient laboratories to Quest Diagnostics in 2025.

University Hospitals operates 21 hospitals and nearly clinics and outpatient facilities in Cleveland and northeastern Ohio. The system boasts revenues of $7.3 billion.

Less waiting for patients

In addition to applying more scrutiny to revenues and expenses, University Hospitals also worked to reduce the amount of time patients spent waiting for appointments.

“We really doubled down on what we thought was an ethical mandate, and that was to really lower our days to first appointment in the ambulatory sphere, and we decided we want to be best in class and get a very high percentage of our appointments in less than 10 days for first visits,” Megerian says.

He pointed to the use of technology to streamline the time to get an appointment. But he says more importantly, the system secured “buy-in from our clinicians that waiting is suffering.”

“If you have a big concern and you're told to wait four weeks, that really goes against our values, which is do no harm,” Megerian says. “And so we were able to be very clever as it relates to making sure physician templates are maximized. There's no empty holes.”

Megerian also says University Hospitals is utilizing nurse practitioners and physicians’ assistants more effectively. He says they are “entirely capable of managing and seeing a certain segment of complaints in the ambulatory setting.”

“We really maximized their deployment, made sure that they could work at the top of their license, and then many wanted to more come work here, integrated them with the physicians,” he says. “So it's really a team approach, as opposed to one or the other, and that's allowed our visit volumes to significantly increase.”

Reducing length of stay

Megerian also pointed to another area that he said was “dramatically helpful.”

University Hospitals worked to find ways to reduce how much time patients were staying in the hospital. He says the focus remains on treating patients safely. No one is being kicked out prematurely, he stresses.

But Megerian says the system has taken steps to ensure that, as much as possible, if a patient has a condition or procedure that has an expected hospital stay of four days, the patient is discharged in that time.

“Every additional day that they stay is potentially an opportunity for someone who needs to get in, not to have a bed,” Megerian says.

He says hospital leaders, including nursing leaders, worked to make sure that they found ways to ensure patients weren’t staying in hospital beds longer than necessary.

“By having that ability to now have beds that are available, you then can welcome new patients with sometimes really complex needs that need to be there,” Megerian says.

With the added capacity, University Hospitals performed more transplants, more complex heart procedures and more neurosurgical procedures. “Now we have more space,” he says.

Megerian also says the system is utilizing its community hospitals more effectively, and stemming the transfer of patients to the UH Cleveland Medical Center, the system’s main campus, when it’s not needed. He also says some patients are being sent to community hospitals to free up space for patients who need more care at the main campus.

“Although we have all these other community hospitals, some of them are entirely capable of doing some secondary, even early tertiary care,” Megerian says. “So let's not try to concentrate everything on the main campus, be overflowing, not let the really quaternary stuff in. Let's start moving some of this secondary, tertiary care out to these great community hospitals that can handle it. And it's been very, very successful.”

Projecting ‘a great year’

Megerian notes there are looming challenges with Medicaid cuts in the coming years following the passage of President Trump’s domestic policy package last year.

But he says he’s glad that some of the impacts are coming down the road. He credited Ohio Gov. Mike DeWine for signing an order to boost the state’s franchise fee last year, helping Ohio secure more Medicaid funding.

Building on the momentum University Hospitals has enjoyed, Megerian says he’s optimistic for even better financial performance next year.

“We have bigger goals for this year than we even did last year,” Megerian says.

“In the end of the day, if you increase your volume, your revenues, you decrease your expenses, you have the kind of year that we had, and we're on track for a great year right now,” he says.