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According to a report in Crain's Cleveland Business, MMPI's vice president at the time, Mark Falanga, had no knowledge that a med mart had already been tried in Birmingham, with disastrous results.
"In and of itself, this is not enough to cause us to hesitate," he told Crain's after studying the Birmingham debacle.
And indeed, no one hesitated.
MMPI, founded by the Kennedy family, who developed the company's expertise in mart-style buildings as a means to showcase furniture, gifts, home furnishings, and interior design — but not medical equipment — forged ahead with its med mart plans. At the helm was Chris Kennedy, the son of Robert Kennedy. Representing the county was then-Commissioner Tim Hagan, reportedly a close family friend of the Kennedys.
By the fall of 2010, commissioners started finalizing Cuyahoga County's 20-year deal with MMPI, and contracts that cemented the financial arrangements were approved before the county's new government came onto the scene. In the end, the commissioners issued bonds for the project that obligate the county to pay more than $800 million, including interest, for its med mart.
Through it all, MMPI had said it has procured potential med mart tenants, but declined to reveal who they were. It also claimed to have attracted trade shows committed to planting roots in Cleveland, although it wouldn't say which ones.
When construction crews broke ground in January, MMPI finally released the lists. Absent were large, multi-national makers of cutting-edge medical devices. Instead, furniture and design companies — MMPI's stock in trade — were featured prominently as med mart tenants, as were various Ohio-based outfits: everything from information technology to security systems to aromatherapy. Among the 30-some conferences announced, only a handful were medically related.
By May, Brian Casey was on the ground in Cleveland, bringing with him years of experience with a company that manages membership, educational conferences, and trade shows for medical organizations. A month after Casey's arrival, Chris Kennedy announced that he would be stepping down as president of MMPI. Replacing him at the helm: Mark Falanga, the man who knew nothing of Birmingham's med mart fiasco.
But Casey does know a thing or two. For one, he knows that hospitals don't actually shop for things the way Cleveland's original med mart planners assured us they would.
Beginning in about 1990, shortly before the Birmingham Medical Forum was built, hospitals across the nation started responding to government pressure to lower costs. One way is to join one of more than 600 group-purchasing organizations that contract with suppliers on behalf of large groups of institutions to get discounts — sort of like a warehouse club for medical buyers. The process makes shopping malls stocked with supplies and devices unnecessary.
"More than 70 percent of what a hospital buys is through a group-purchasing organization," says Curtis Rooney, president of the Health Industry Group Purchasing Association, whose members include the nation's largest medical purchasing groups. "Everything from cotton swabs to laundry services to CT scanners."
Further, nearly all hospitals belong to at least one such group.
"In addition to purchasing, they evaluate the products and compare them for the hospitals, and they work closely with physicians to evaluate the products," he says. "If it's really high-end, the hospital develops a relationship with the manufacturer, who makes a one-of-a-kind device for them."
In these cases, a hospital already knows what it wants — there is no comparison shopping.
The Casey Effect
An unassuming Chicagoan who now calls downtown Cleveland home, Brian Casey stands up straight but casually as he makes conversation. He chuckles easily when something strikes him funny, and any observer can see that he is genuinely impressed with Cleveland.
Casey's more serious, professional side knows that politics happen anytime two people are in the same room. He says he is staunchly honest. He is definitely frank.
"The concept within the medical mart — I think people may have had it upside down, where the tenants in the building are going to drive the traffic," he says.
In Casey's med mart concept redo, medical conferences and trade shows — not permanent tenants — will drive the traffic. The focus will be on medical education required by doctors and nurses. And he aims, at least at first, to target relative locals, not those far-flung enough to rack up endless nights in hotels here. Casey speaks only rarely in specific terms, but he hints at collaboration between local institutions that might eventually make Cleveland a Mecca for medical education.
As for med mart tenants? The original promises called for displays of high-end equipment from the likes of GE, Phillips, and Siemens, which may or may not still be in the works. Indeed, as MMPI begins turning mere letters of intent into signed leases, the first takers are shaking out more along educational lines. That, says Casey, is by design.
What Cleveland will get under the new plan is a convention center that features advanced, easily expandable IT capability and all the bells and whistles needed for live surgery feeds and hands-on medical and laboratory training. For the past two years, MMPI has routinely promised to bring in 50 to 60 medical meetings a year, amounting to 300,000 visitors spending more than $300 million on hotels, food, and nightlife annually.
So far, the going has been slow. Of the 25 conferences lined up to come here between 2013 (when the med mart is slated to open) and 2015, just 9 have something to do with medicine — and only 1 has agreed to hold an event here for two years instead of just one.
MMPI will not divulge how many attendees might arrive with those meetings or how many nights they might spend in hotels. But Positively Cleveland, the visitors bureau that is jointly responsible for procuring convention business for the city, booked 6 of the 25 meetings. And as a quasi-governmental entity, it is obligated to talk.