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Hospitals fear effect of fall off fiscal cliff
BioMotiv aims to help drugs cross valley of death Startup plans to license compounds trapped in the lab, solve ‘major issue’ in mediciners
Reimbursements from Medicare would drop By TIMOTHY MAGAW tmagaw@crain.com
By CHUCK SODER csoder@crain.com
Should the United States fall off the so-called “fiscal cliff,” Northeast Ohio’s health care providers would stomach millions of dollars in revenue cuts their leaders say could gnaw away at their already-slim operating margins. The inability of Congress and the White House to hash out a deal to tackle the nation’s ballooning deficit would trigger billions of dollars in spending cuts and tax hikes through a process known as sequestration, which would include an estimated $10.7 billion in cuts to the Medicare program next year. Given Northeast Ohio’s aging population, many local hospitals rely heavily on Medicare dollars to subsidize their operations. For instance, 43% of the Cleveland Clinic’s patient volume stems from Medicare patients. Plunging off the fiscal cliff could cost the Clinic — an enterprise with annual operating revenue of about $6 billion — as much as $22 million in reimbursements. The impending Medicare cuts account for a mere 2% reduction in the federal program’s spending in 2013. But because Medicare reimbursements
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aiju Shah and his colleagues at BioMotiv LLC are heading into the pharmaceutical industry’s valley of death to rescue some of the many drugs that lie at the
bottom. If they succeed, they’ll prove there is indeed a safe way to cross the chasm. And they’ll have created a cadre of young drug development companies in Northeast Ohio, which today has only a small presence in the pharmaceutical business. See BIOMOTIV Page 11
Union concerns eased, manufacturers again eye Ohio By JAY MILLER jmiller@crain.com
More manufacturers are returning Northeast Ohio to their list of candidates when they start shopping for a place to build a plant or expand existing operations, as concerns ease about the state’s history of unionized labor and the perceived challenges organized work
forces can present for management. “Our business attraction people said one of the trends they are recognizing is that the union question is not coming up as often,” said Tom Waltermire, president of Team NEO, the regional business attraction nonprofit. He said most of the companies his staff talks to about bringing operations to Northeast Ohio are manufacturers.
INSIDE: Team NEO’s quarterly report shows overall employment likely won’t return to peak levels until the end of the decade. PAGE 33 Ohio is landing on the lists of more site selectors, Mr. Waltermire said, as manufacturing rebounds and finding skilled or trainable workers has become harder in many parts of the country. As a result,
companies that have been wary of Ohio because of its union reputation are returning here and to other unionized states with pools of machinists, welders, electricians, plant maintenance workers and others with related work experience. “I think it’s not coincidental those two things (the return to Ohio and the shortage of skilled labor) sit See UNION Page 33
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Case Western Reserve University law school rapidly increasing number of study abroad affiliations ■ Page 3 PLUS: MANUFACTURERS TAKE GREATER INTEREST IN MAX HAYES PLAN ■ & MORE
Entire contents © 2012 by Crain Communications Inc. Vol. 33, No. 45