Guarding against brand damage is difficult but not impossible under joint venture arrangements.
Many fathers have given their sons good advice that sounds something like this: "Your good name is all you really have in life."
Some hospitals and health systems renowned for their quality and patient outcomes are learning that lesson the hard way, as joint venture facilities bearing their name—but not controlled by the high-performing organization—have come under fire for a rash of problems from patient satisfaction scores to quality standards.
Late last year, Atlanta-based Emory Healthcare was embroiled in an embarrassing situation not entirely of its own making when Emory Adventist Hospital in Cobb County, GA, and Emory Eastside Medical Center in Snellville—both co-owned by Emory and other hospital chains—scored poorly on statistics measuring quality of care and patient satisfaction in a study done by the Atlanta Journal-Constitution.
Three of the five hospitals bearing the Emory name in the Atlanta area are joint ventures. Emory Eastside is part of a joint venture with HCA Inc., which handles most of the day-to-day management of the hospital, and Emory Adventist is 35% owned by Emory in a joint venture with Adventist Health System.
Numbers that tarnish
Representatives of both hospitals told the newspaper that the Medicare reports that show some of the poorest patient satisfaction scores in the state at Emory Adventist and that show a high death rate in patients admitted for pneumonia at Emory Eastside between 2005 and 2008 are retrospective, and that efforts were under way to improve those scores well before the Medicare reports were released.
However, damage to public perception caused by the newspaper's report cannot easily be undone, says Gabrielle DeTora, a Pennsylvania-based independent healthcare marketing strategist who worked in strategic planning and marketing for two hospitals before starting her own firm. "By the time it's a PR problem, it's too late," she says.
What happened with Emory is not all that unusual, DeTora says, although such failings don't always receive such coverage in the local newspaper.
She says C-suite executives from the CEO on down should be heavily involved not only in the ways revenue and referrals are going to work, but also in mapping out how to control quality and patient satisfaction. Implementing that plan on a granular level is too often ignored.
"It doesn't get down to the nitty-gritty," she says. "When a master brand takes over a subbrand, one tactic is to announce the brand change quickly so that it changes the perception of the sub-hospital. But you still have to deal with the quality issues, immediately communicate that plan to the physician referral community, and educate them on what you're doing to take that responsibility."
Another possibility—making the business transaction but taking time to address quality and patient satisfaction issues before the sub-brand hospital is allowed to use the master brand's name?is rarely done in healthcare, she says, and that puts the master brand's reputation at considerable risk.
"Perhaps a better way to do it is to allow administrators of the master brand to come in and collaborate with the sub-brand team in order to set a strategy and expectations and benchmark critical success factors to improve quality," she says. "That way the acquisition can be done very subtly" until quality and patient satisfaction are addressed. "In the long-term, it's better to hold off. But in the short-term, it's often about driving patient volumes."
Houston's M.D. Anderson Cancer Center is an example of a system that has licensed its brand in a couple of different ways that have evolved over time. It has six satellite locations that it controls totally in addition to its main campus in the Houston area, and has partnerships with nonprofit hospital systems in Albuquerque, NM; Orlando, FL; and Phoenix. In Albuquerque, it partners with Presbyterian Healthcare services to bring radiation oncology to the area. A partnership with Orlando Health since 1991 has brought a 10-story patient tower. In Phoenix, it will open an entirely new cancer hospital with partner Banner Health in 2011. The key in all cases is M.D. Anderson's clinical oversight.