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The Banning of Hospital Advertisement Interview Ideas

Mary Bergin is the CEO in Putney, Vermont; she is the CEO of a community hospital that has grown significantly over the past few years in terms of the resources it has added. Mary came to the hospital after being the COO of larger facility in New York, but she wanted to live in a rural state as well as be in charge of her own facility. Putney County Hospital was in some financial difficulty when she first arrived. But the Board of Directors supported her initial cost cutting efforts. As a result, the hospital had returned to financial stability. Over the past two years, the hospital had begun to aggressively recruit primary care physicians and also establish several satellite clinics. All of these strategies had been done because of the significant regional competition that the hospital faced from major centers in Burlington and Hanover, New Hampshire.

It was early March and spring was just beginning to come to Vermont. The snow was starting to melt and the ski season was coming to an end. Mary went to her porch to get the newspaper to skim it before an early meeting at the hospital. The headlines caught her off guard, "Vermont Legislature Considers Banning Hospital Marketing and Advertising." As Mary read the story quickly she realized it this was as serious issue. Two important members of the legislature, State Rep. Steve Maier (D-Middlebury), who has support from a Republican, and Sen. Kevin Mullin (R-Rutland), a member of the Senate Health and Welfare Committee, had proposed a ban on such activities. Mary texted her leadership teaban on hospital ads," Burlington Free Press (March 17, 2010) http://www.burlingtonfreepress.com/apps/pbcs.dll/article?AID=2010100317018).

At the lunch meeting, Mary began, "Did you all read the story? I am not sure this initiative will pass, but we all know Vermont. This idea will not and scheduled a luncheon meeting, She also asked them to make sure to pick up a copy of the Burlington Free Press (see "Vermont Lawmakers consider "Did you all read the story? I am not sure this initiative will pass, but we all know Vermont. This idea will not die. Some form of a limiting proposal may go forward in another session of the legislature. We need to develop a strategy around this issue. There are many facets to this problem.

"I am really concerned", said Bill Hayes, the Marketing Director, "we have Dartmouth Hitchcock in New Hampshire that will just increase their presence at our expense, the minute we cannot advertise. As it is they are so much bigger than us, then there are hospitals in New York. How do we protect our patient base?"

"Well, maybe we could take those dollars and invest it in more doctors or some new technologies, that is the point of the proposal," said Mike Dolan, the Chief Financial Officer, "is it really so bad? I am not so sure?"

"Wait," said Mary, "let's not have a Senate debate here on the merit of the bill, we need to think of a plan that is multi-faceted in light of something that now is in consideration. What if it passes? What is the implication for our strategy? What do we do in light of the fact that there is now more examination of what we do in terms of our marketing efforts even if the bill does not pass?"

What position should I take in the newspaper? I am being asked for an interview by the Putney Gazette later today. Please identify key issues/questions to be raised for the interview.

Solution Preview

Below are a few bullet points that come to mind that may directly or indirectly impact the issue of hospital advertising

- What is the purpose of marketing and advertising?
- When one looks at the cost-benefit analysis, is the expense of advertising really that great of an investment?
- What is the difference between what a for-profit and nonprofit does with regard to how they keep business flowing ...

Solution Summary

How to protect the patient base, competition and legislative issues related to hospitals is discussed.

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