Becker’s Healthcare Podcast: Dennis Laraway, CFO at Cleveland Clinic

Release Date: December 5, 2025
Host: Alan Condon
Guest: Dennis Laraway, Executive Vice President & CFO, Cleveland Clinic

Episode Overview

This episode features an in-depth discussion with Dennis Laraway, CFO of Cleveland Clinic, an internationally recognized academic health system. Laraway draws on decades of executive experience to analyze today's most pressing financial challenges in healthcare, the sector’s technological transformation, and Cleveland Clinic's strategies for cost management, labor productivity, and AI partnerships. The conversation is rich with real-world examples, direct financial insights, and reflections on sector-wide trends.

Key Discussion Points and Insights

1. Dennis Laraway’s Background & Cleveland Clinic’s Scale [01:18–04:02]

• Extensive Leadership: Laraway shares his storied career, having served as CFO for several major health systems across the country, including Banner Health, Memorial Hermann, Baylor Scott & White, Ascension Health, and Dignity Health.

• Unique Difference: He highlights the Cleveland Clinic’s global reach and academic culture as distinguishing features.

  "I've had a long run across the country... and now [I'm at] a global enterprise here today with Cleveland Clinic." — Dennis Laraway [03:17]

2. Major Trends Affecting Healthcare Finance [04:40–11:01]

a) Healthcare Legislation & Payment Reform

• Government Funding Pressure: With healthcare constituting "nearly 20% of the GDP" [04:58], federal and state payment reforms will tighten, especially around Medicare and Medicaid.

• Shift to Value-Based Care: Laraway emphasizes the rapid transition from fee-for-service to value-based models, with payment methodologies and federal support under strain.

  "Federal funding of programs...those dollars are going to come down. There’s going to be price and payment pressure from CMS...this has all of our attention." — Dennis Laraway [06:20]

b) Cost Transformation

• Expense Management: Due to reimbursement pressure, healthcare leaders must focus on internal cost structures — both labor and non-labor — and drive efficiency.

• Standardization & Lean Operations: Pursuing operational consolidation, standardization, and productivity to offset revenue challenges.

  "If you've got price pressure and revenue pressure, then we must turn to...our own expense base...getting leaner across our enterprise." — Dennis Laraway [07:09]

c) Technology Transformation

• Industry Lag: Healthcare's adoption of advanced technology has trailed industries like banking and manufacturing. Narrow margins have held back investment, with some progress via the ACA.

• AI & Robotics: Recent years have seen a surge in AI and automation interest, unlocking efficiency and further cost transformation.

  "AI is now very, very well represented...there are opportunities and synergies...technology that can increase our coverage of volume and patients and transactional volumes, speed and accuracy." — Dennis Laraway [09:52]

3. Cleveland Clinic’s Cost Management Strategies [12:15–18:04]

a) Labor Productivity

• Top of License Utilization: Cleveland Clinic strives to ensure all workforce members operate at maximum capacity while remaining an employer of choice.

• Operational Examples: Improvements in bedside productivity, operating room efficiency, and back-office transactional productivity.

  "We want to be seen as the employer of choice in our communities...but we also need to make sure we're using our workforce at the top of their license." — Dennis Laraway [12:30]

• Financial Impact: “Nearly 100%” of this year's revenue growth (to Q3 2025) has dropped to operating income/cash flow, a direct result of expense discipline and labor efficiency.

  "We’re exceeding our plan for the year in top line revenue...for us, it’s nearly 100% [dropping to the bottom line] because of our attention to managing our expense base." — Dennis Laraway [14:52]

b) Supply Chain Management & Standardization

• Physician Alignment: Through adoption of formularies and standardization of supplies/pharma, the Clinic reduces variation and leverages contract consolidation for cost savings and care quality.

  "If we can create that alignment...we create contract leverage...reduce variation. That's better quality of care." — Dennis Laraway [16:17]

c) Centralized Back Office/Shared Services

• Global Scale: Cleveland Clinic has consolidated back-office operations with measurable results.

• Efficiency Gain: Enterprise service costs are now down to 8% of total revenue — “an all time low.”

  "Our aggregate corporate shared services cost...is down to now 8% of our total revenue streams...showing the benefit of scale and synergies." — Dennis Laraway [16:57]

4. Excitement for the Future: AI, Partnerships, and Industrialization [18:40–22:40]

• Transformation Abounds: Laraway views this period of flux as full of opportunities. The influx of tech titans (Google, Oracle, Microsoft, Palantir) into healthcare is reshaping practices at scale.

  "Leaders are made in transformative times. So bring all the tools in your toolkit...it’s opportunity abound for us. And that's pretty exciting..." — Dennis Laraway [19:47]

• AI-Driven Initiatives:

  • Palantir Partnership: Driving operational synergies.
  • Oracle & G42: Collaborating on international care transformation.
  • Ambience AI: Using ambient listening to remove keyboarding for physicians and automate clinical documentation — boosting both physician engagement and patient experience.
  • EPIC Integration (Casa): Automating documentation, coding, and query management to reduce brute-force labor and speed revenue cycle processes.

  "We're working with emerging AI companies like Ambience...the ambient listening capability of physicians in their offices...automates and develops the patient note..." — Dennis Laraway [21:14]

5. AI in the Revenue Cycle and the Provider-Payer "Arms Race" [23:08–27:55]

• Current Challenge: Providers are "chasing" payers in automating claims adjudication and payment. Despite adoption of better technology, claims denial rates start >15% and must be hand-worked down to <2% — a huge resource drain.

• A Call for Collaboration Over Competition:

  • The “arms race” between payers and providers is inefficient.
  • The better solution is closer alignment and joint operating processes, using AI for genuine reduction of friction, rather than an adversarial escalation.

  "We in the provider sector, we're chasing this a bit... we still face 15 plus percent denial rates...all of the time, energy and resources...to get it from 15 to sub 2 is unsustainable." — Dennis Laraway [25:13]

  "Whether they ramp up AI faster than we ramp up AI...that doesn't seem to be the right game. The right game is to collaborate and create alignment..." — Dennis Laraway [27:30]

Notable Quotes & Memorable Moments

• On Federal Funding & Sector Dynamics:
  "At 20% GDP, it's very fertile ground for a lot of activity, a lot of emerging technology transformation, even more of industrialization if you will — that really has not occurred in the health sector as it has in other industries." [04:58-05:15]

• On Labor Productivity:
  "Be at top of license where you can be, be as productive, whether that's bedside productivity, nursing standards and patient ratios, operating room efficiencies or back office services..." [12:35]

• On Revenue Growth & Cost Discipline:
  "Nearly 100% [of revenue growth] is dropping to operating income...because of our attention to managing our expense base, managing to volume and patients served across the enterprise..." [14:52]

• On AI & Partnerships:
  "We're working with emerging AI companies like Ambience...ambient listening...that then transcribes, develops the patient note, helps drive coding and abstracting..." [21:14]

• On AI Arms Race:
  "All of the time, energy and resources consumed to get it from 15 to sub 2 is unsustainable...That doesn’t seem to be the right game. The right game is to collaborate and create alignment." [26:03, 27:30]

Timestamps for Key Segments

• [01:18] - Laraway’s background and Cleveland Clinic’s global scope
• [04:40] - Three major financial/operational trends in healthcare
• [12:15] - Strategies for labor, supply chain, and back-office cost management
• [14:52] - Financial results from cost discipline
• [16:17] - Supply and formulary standardization impact
• [16:57] - Shared services savings and scale
• [18:40] - What excites Laraway about the future
• [19:47] - The role of leadership in transformative times
• [20:00–21:14] - AI partnerships and operational transformation
• [23:08] - AI in the revenue cycle: progress and challenge
• [24:19–27:55] - Provider-payer AI arms race and need for collaboration

Summary

Dennis Laraway’s conversation provides a thorough, candid account of the strategic pressures facing large health systems, especially around federal payment reform, cost management, and technological evolution. Cleveland Clinic’s experience — driving real savings through labor discipline, global shared services, and leading-edge AI partnerships — demonstrates what innovation looks like at scale, even as the broader industry contends with entrenched inefficiencies, especially in the revenue cycle. Laraway’s call for collaboration between providers and payers, rather than an endless technological "arms race," is a rallying statement for the industry.