This is a rush transcript from "On the Record," August 4, 2009. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: As the health care battle rages on, "On the Record" is doing what members of Congress should be doing during their recess, going to hospitals, checking them out, find out what works, what doesn't work. Today, we went to a hospital that works really well, the Cleveland Clinic, and we asked questions. We didn't talk to lobbyists or bureaucrats, we talked to doctors and people who work in the hospital every day. We even talked to patients. You'll see the amazing state-of-the-art technology this hospital has in moments.

But first we talked to Dr. Toby Cosgrove, CEO of the Cleveland Clinic, about what needs to be done to really fix health care in this country.

(BEGIN VIDEOTAPE)

VAN SUSTEREN: In terms of the discussion in Washington about health care reform bill -- you know, you're a practicing doctor. You run a hospital. Are we on the right track? Or where would -- do you think -- what's your idea of how we can make it better? You know, I know you'd like to see everyone have (ph) hospital like your own, but...

TOBY COSGROVE, CEO, CLEVELAND CLINIC: Well, I'm concerned.

VAN SUSTEREN: OK.

COSGROVE: I'm concerned because the discussion has gone to a discussion that is about insurance reform and about access and it is not about quality or costs. And we're not going to get quality and costs under control, we're just going to cost-shift until such time as we begin to address the delivery system and the burden of disease.

And we talked about the burden of disease in terms of diseases that people get from their behavior and...

VAN SUSTEREN: Cigarettes, eating, that kind of thing.

COSGROVE: Exactly.

VAN SUSTEREN: Obesity.

COSGROVE: Exactly.

VAN SUSTEREN: So I take it you don't think obesity is a good thing.

COSGROVE: First of all, it costs more for health care. You know, it costs twice as much a year for health care for somebody who's obese than it does for somebody who's normal weight. It decreases the productivity of people, and it accounts for essentially 20 years of aging. In other words, if you're 40 years old and obese, it's equivalent to being 60 years old as far as health is concerned. Two thirds of the United States is overweight and one third of the United States is obese.

VAN SUSTEREN: Do you have any idea how many patients the Cleveland Clinic sees a year, any idea of the ballpark number?

COSGROVE: Yes. We see 3.5 million visits per year.

VAN SUSTEREN: All right. Out of the 3.5 million visits -- that may not be 3.5 million patients, though, right?

COSGROVE: Yes. We have -- we hospitalize about 175,000.

VAN SUSTEREN: OK. Out of 175,000 people you hospitalize a year, how many do you think are here largely in part that obesity has played a role in their reason for being here?

COSGROVE: Oh, I'm sure it's at least 50,000.

VAN SUSTEREN: So it's at least -- it's more than a third, or a little over -- a little less than a third?

COSGROVE: Right, major portion, because it accounts for -- you know, you're 20 times more likely to have diabetes if you're obese. You're twice the incidence of heart disease, twice the incidence of cancer. I mean, it just goes right up.

VAN SUSTEREN: So if we were really smart, we sort of cut it off at the pass in terms of health care if we could deal with obesity certainly, you know, starting out, you know, 25, 35 years from now, we'd pick it up on that end in terms of the cost savings.

COSGROVE: Absolutely. And some people think that it is worth $50 a pound for how much you lose in the cost of health care.

VAN SUSTEREN: So in terms of taking out the fryers out of here and getting rid of trans fats, listing the calories, have you made any effort reward the people who've lost weight here, staff?

COSGROVE: Absolutely. We helped some of the staff. We've given them free Weight Watchers, free Curves, and free access to our athletic facilities. And as a result, they've all lost -- in the last six months, they've lost 90,000 pounds.

VAN SUSTEREN: How many have lost 90,000 pounds?

COSGROVE: Six thousand.

VAN SUSTEREN: That's extraordinary.

COSGROVE: Yes.

VAN SUSTEREN: And they feel good.

COSGROVE: They feel better. And I mean, I -- it's amazing. Periodically, I have someone come up and give me a hug because they've lost 30 or 40 pounds. I don't get hugs very often.

(LAUGHTER)

COSGROVE: And we took all the trans-fats out of all of the food.

VAN SUSTEREN: How long ago?

COSGROVE: A year ago.

VAN SUSTEREN: OK.

COSGROVE: And if you look here, for example, all of these things have a number of calories associated with them. We serve no fried foods.

VAN SUSTEREN: There's no fried foods at all?

COSGROVE: No.

VAN SUSTEREN: Is this free time or work time?

COSGROVE: This is work time and lunch breaks, et cetera.

VAN SUSTEREN: So they're actually getting paid to exercise?

COSGROVE: Yes.

VAN SUSTEREN: Are you guys any good at basketball?

UNIDENTIFIED FEMALE: No!

VAN SUSTEREN: How many members you got?

UNIDENTIFIED FEMALE: Thirty-five hundred.

VAN SUSTEREN: And how many show up? You know, everyone, like, buys memberships, gets it charged to a credit card, and then it shows up one month and it's on your credit card for the rest of your life.

UNIDENTIFIED FEMALE: No, we have good usage.

VAN SUSTEREN: You do?

UNIDENTIFIED FEMALE: We do.

VAN SUSTEREN: Do you have to pay for this if you're an employee?

UNIDENTIFIED FEMALE: No, you do not.

VAN SUSTEREN: It's free?

UNIDENTIFIED FEMALE: It's free.

VAN SUSTEREN: People who use this, do they record what they're doing? I mean, do you have a record-keeping so that you can, like...

UNIDENTIFIED FEMALE: Yes, we do.

VAN SUSTEREN: Do you have a baseline, like, I swam three laps two years ago. Now I can swim 10 or 200?

UNIDENTIFIED FEMALE: What we do is usage right now and also we have an incentive. If you come in 10 times a month for at least 10 months out of the year, you get $100 bonus, so...

VAN SUSTEREN: Oh, really?

UNIDENTIFIED FEMALE: Yes.

VAN SUSTEREN: See, that's good. I mean, to encourage people...

COSGROVE: Carrots and sticks.

VAN SUSTEREN: Yes.

VAN SUSTEREN: Whatever happened to the president's physical fitness thing? When you and I were in school, that was, like, you got an -- you got an award...

COSGROVE: Right.

VAN SUSTEREN: ...or every kid got an award if they do 50 sit-ups or something.

COSGROVE: It didn't make a damn bit of difference in terms of -- in terms of the obesity in the United States.

VAN SUSTEREN: So what do we do?

COSGROVE: So...

VAN SUSTEREN: I mean, how do you get action?

COSGROVE: Well, you know, one of the things is you've got to get employers to understand that. I mean, right now, we've put together a program where we get more than our money back by getting people health care. We save money. And the...

VAN SUSTEREN: But the problem is, that's (INAUDIBLE) That's -- I mean, that's, you know, the promise. It's not -- it's -- you know, the whole idea of making people healthier so that 30 years from now...

COSGROVE: No, right now. Right now. They come to work, they work more. They're more productive. Their -- their -- their health care costs go down. And we're self-insured, so we pay for them when they're sick.

VAN SUSTEREN: Oh, so you've saying that even if -- I mean I thought when you were talking about a wellness program that -- that this is sort of a long-term program that'd pay off for us. You say that if we started getting well today, we would feel the costs today...

COSGROVE: Absolutely. Absolutely.

VAN SUSTEREN: That it would be...

COSGROVE: Absolutely.

VAN SUSTEREN: We'd start saving money today.

COSGROVE: Absolutely.

(END VIDEOTAPE)

VAN SUSTEREN: Up next, the Cleveland Clinic lets you in on its secret to success. Can other hospitals do this? You're going to find out.

(COMMERCIAL BREAK)

VAN SUSTEREN: The Cleveland Clinic is one of the best hospitals in the country. Now, not just for quality care but because it also keep costs low. The question is how?

(BEGIN VIDEOTAPE)

VAN SUSTEREN: This hospital has been -- has been suggested as being sort of a model hospital because of the quality of care but also cost.

COSGROVE: Right.

VAN SUSTEREN: You're able to make -- you meet the costs.

COSGROVE: Yes, and one of the reasons, I think, for that is a couple-fold. First of all, all of us are employed.

VAN SUSTEREN: You're not getting -- you're not doctors having privileges.

COSGROVE: No. And essentially, we get paid a fixed salary for what we do over the course of a year.

VAN SUSTEREN: Depending on how many tonsils you pull out.

COSGROVE: And (INAUDIBLE) like, for example, I was a heart surgeon. Didn't make any difference whether I did three heart operations or four heart operations a day.

VAN SUSTEREN: Now, what is the secret to your success here? Is it the way the doctors -- is that the -- the way the doctors are on staff, is that it or not?

COSGROVE: It's the model of care. You know, we're all in this -- it's a big team and we all are pulling in the same direction. And what is excess income is plugged back into the organization.

VAN SUSTEREN: Why can't other hospitals do this?

COSGROVE: Well, I think it's the model. Very few people have this model of care where the docs are all employed. And they are -- have the hospital and the docs are separate. They're all independent individuals that come in. It's not the integration -- and integration goes not just around one hospital. We're integrated across a whole series of hospitals in northeast Ohio.

VAN SUSTEREN: These are the paper records.

COSGROVE: These are the paper records. We...

VAN SUSTEREN: And ideally, we're going to get rid of all these some day, right?

COSGROVE: Yes. Yes, so...

VAN SUSTEREN: Oh, my God, just look at this.

COSGROVE: These are just the active records.

VAN SUSTEREN: Oh, my God. Look at -- these are active records?

COSGROVE: Yes. Look at that. And then look back down this way.

VAN SUSTEREN: Now, are these on electronic?

COSGROVE: No, these are not electronic. These are paper records and we're gradually moving to electronics. We've moved about 80 percent reduction in the calls for these records on a daily basis. So gradually, what's happening is these are being phased out.

VAN SUSTEREN: So this -- these are your electronic records?

COSGROVE: Yes. And these guys will probably tell you what they're doing here.

UNIDENTIFIED MALE: So I just came from a different hospital system, and we had a mix of paper records, as well as kind of an antiquated computer system. This is actually very nice.

UNIDENTIFIED FEMALE: When there were paper charts beforehand, you had to actually go and get the paper records and put through (INAUDIBLE) Now you can just go through electronically and click on whatever you want to filter out, you know, whatever labs you wanted to get images from before that you can compare to. And you can load up images from outside hospital onto the computer here and have the Realis (ph) here read it.

COSGROVE: Hey, sir.

VAN SUSTEREN: Hi.

COSGROVE: He started getting chest pain and wound up calling the nurse on call, and then a series of events over the last -- starting, what, last Sunday morning?

UNIDENTIFIED MALE: Yes.

COSGROVE: Early?

UNIDENTIFIED MALE: Uh-huh.

VAN SUSTEREN: What did you get? Did you get horrible chest pain?

UNIDENTIFIED MALE: Yes. It was a chest pain where it was on and off...

VAN SUSTEREN: Heavy, or did you think you had indigestion?

UNIDENTIFIED MALE: I thought it was indigestion. And I called the nurse on -- the Cleveland Clinic nurse on call, and he suggested -- he said, You're not 25 anymore and you need to get to the emergency right away. So I woke my wife up. She drove me down. We got there about 3:00 o'clock. And we got in there, and they seen something that they weren't sure about, but knew where to take me to.

You know, they called Cleveland Clinic, was communicating with them down here. And they got me up and they came over and got me over here about a little bit between 5:00, 5:30. And (INAUDIBLE) you know, I had a heart attack, and they went in and seen and said -- you know, did -- what's that stent called?

COSGROVE: Cardiac catheterization.

UNIDENTIFIED MALE: Cardiac catheterization. And I had a blocked artery.

COSGROVE: See, I think the two things there is, first of all...

VAN SUSTEREN: This was just on Sunday, by the way. We're on Tuesday. That was two days ago?

UNIDENTIFIED MALE: Yes.

COSGROVE: See, but what happened is, first of all, the transportation system moved him to the right place at the right time. He didn't bring any paper with him. Electronic medical records came right with him. So then we get all the information...

VAN SUSTEREN: Before he even got here.

COSGROVE: ... before he even got here.

I think what you have to do is you have to drive efficiency. And one of the things that a system does, it drives efficiency. For example, purchasing. We have across our entire system, a billion dollars worth of purchasing a year.

VAN SUSTEREN: Do I want an MBA running the hospital or do I want a doctor?

COSGROVE: I think...

VAN SUSTEREN: You know, I mean, it's the -- you know -- you know, it's sort of...

COSGROVE: See, I think that -- you know, I will give you my bias. My bias is that it's easier to teach a doctor about business than it is to teach an MBA about medicine.

VAN SUSTEREN: So where are we?

UNIDENTIFIED MALE: This is the main receiving dummy (ph).

VAN SUSTEREN: All right, when you say "receiving dummy," this is where you receive all your supplies?

UNIDENTIFIED MALE: All the products come in through here used everywhere here at the main campus.

VAN SUSTEREN: Everything comes through here every day. And you -- how do you -- how do you move it to the facilities?

UNIDENTIFIED MALE: Well, that's where it gets pretty exciting.

VAN SUSTEREN: OK, show me.

UNIDENTIFIED MALE: Two different ways of moving things. One way is by truck. So some things come in here and we re-route them to one of our own internal vehicles and they leave by truck. The exciting way...

VAN SUSTEREN: What is the exciting way?

UNIDENTIFIED MALE: ... is over here.

VAN SUSTEREN: All right.

UNIDENTIFIED MALE: And it's called "automatic guided vehicles."

VAN SUSTEREN: Oh, my. This is it?

UNIDENTIFIED MALE: This is it. It's going to go underneath here, and hopefully, load one of these up.

VAN SUSTEREN: This little robot.

UNIDENTIFIED MALE: It's a robot, yes.

VAN SUSTEREN: It's a robot? Where do you get something like that, if I want something like that for my house?

UNIDENTIFIED MALE: Well, this was -- this was actually purchased from a company over in Europe.

VAN SUSTEREN: It's talking!

UNIDENTIFIED MALE: Yes, it will talk. It says it's backing up right now. It will tell you when it's going to move. It will tell you, if you stand in front of it, to please move.

VAN SUSTEREN: All right. So what is it getting right now?

UNIDENTIFIED MALE: Right now, it's picking up bulk linen, so it's linen that's going to be used here in the hospital.

VAN SUSTEREN: And how does it know where to go? Where do you program this thing?

UNIDENTIFIED MALE: They travel unattended, and we program in where we want them to head via touchscreen. So all the operator has to do is -- it'll flash when there's something that needs to be dispatched. This one's coming (INAUDIBLE)

VAN SUSTEREN: Oh, watch out. It's coming in. Watch out. It's coming in. Watch out. It's coming in.

UNIDENTIFIED MALE: ... until it stops.

VAN SUSTEREN: Yes.

(LAUGHTER)

(END VIDEOTAPE)


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