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Dec. 2004

Three Steps to Start Marketing the Mission

Now is the time for nonprofit hospitals to start marketing their mission. Letting the community know about the hospital's contribution to the community's healthcare can help fend off potential backlash. That was not done in the past because there was not an urgent need to do so. And hospitals frankly wanted to concentrate on practicing good healthcare and following their mission not necessarily publicizing their accomplishments.

The Stakes

In a study by William N. Gentry and John R. Penrod of the National Bureau of Economic Research called "The Tax Benefits of Not-for-Profit Hospitals" the aggregate value of the exemption from income taxes for all nonprofits during a one year period was $4.6 billion, with the median hospital receiving benefits of 1.8 percent of total assets. For the property tax exemption, an aggregate value of $1.7 billion was determined. The value of the property tax exemption varied across hospitals depending on state and local tax policies and ranged from 1.36 to 3.28 percent of fixed assets.

Consider the impact on your institution. Most think that impact far unlikely to happen. But this past summer the Senate Finance Committee was considering a proposal where the tax-exempt status of hospitals and other organizations would be reviewed every five years. The organization would have to file information to allow the Internal Revenue Service to decide whether it continues to be organized and operated for the original tax-exempt purpose.

To start marketing your mission, start with three steps:

1. Initiate a community health needs assessment

Demonstrating your commitment to your mission can go a long way in deflecting unwanted attention and attracting positive attention. At its core a hospital's mission is to help create healthier communities. You first need to know what the health status of the community is before you can embark on plans to improve it. Public health agencies typically have the expertise to conduct these assessments, but not every agency takes the lead. That is why is it important that your organization steps up to sponsor a study and serves as a catalyst to draw other community organizations, and even other hospitals, together.

If the expertise can be found within your organization to conduct a study, then it makes sense to take the lead. Either way they key is to let the people with true expertise in public health initiatives drive the data collection and reporting. When the report is completed, but prior to release, bring together the partners in the study to discuss collaborative solutions and identify tangible first steps that can be communicated at a formal release.

Simultaneously, put together a marketing plan to release the study results including PR strategies such as an initial press conference. Plan to also keep the study alive during the year through other initiatives such as updates and human-interest features of people impacted by community health improvements.

2. Tangibly demonstrate your community benefit through formal reporting

IRS Form 990, Return of Organization Exempt From Income Tax, is a report that must be filed each year by organizations exempt from Federal income taxes. It is an information return and not an income tax return. Treat this form as an opportunity and also understand its transparency. An organization's forms for the past three years must be shown, and copies provided, to anyone who requests them. The National Center for Charitable Statistics and Guidestar, two nonprofit groups, post many of them on the Internet. It is only a matter of time before all charities will be required to file their forms electronically so virtually every Form 990 will be accessible by anyone.

One of the sections that must be filled out on Form 990 is entitled "What Kinds of Programs Does the Filer Run and How Much Does It Spend on Them?" Here you state the programs you conduct, the purpose, and outputs, such as number of clients served and the total expenses for each program.

Be thorough in your descriptions. Treat this as if it were a marketing piece you were writing that was going to sell the organization. Specific things to list are detailed below.

In addition, certain states require that community benefit reports be issued. Don't wait to be mandated. Put a report together that addresses: the outreach that your foundation does, collaboration with community organizations, care for the uninsured and underinsured, ED use, community education and outreach, clinics, off-site initiatives, and community advocates employed. Show numbers on how many people have been served, dollars spent, and satisfaction levels. Also prepare information about your billing, collection and discounting policies. Package this information professionally and concisely. Then make a big deal about it by putting together a marketing plan around it, taking a similar stance as described earlier with a community health needs assessment.

The American Hospital Association has Web resources that can help you in communicating your benefit.

3. Conduct an economic impact study

Less employed, and yet still powerful, is the economic impact study that measures the financial impact that having a hospital means to a community. The data might surprise you. In studies our firm has conducted on behalf of clients, the employment impact and financial impact have been significant. On average every hospital position created almost an additional position in the community. Every hospital dollar spent generated an additional $.40 to $.50 in the community.

When conducting a study, consider partnering with the economics department of a known university. The credentials of having a Ph.D. conduct the study will speak volumes to its validity and the study researchers are usually open to participating in marketing related activities such as press conferences.

As with the initiatives above, put together a marketing plan. These studies lend themselves to broadening the typical audience that you would target. Tell your employees and physicians first, of course. Then involve the local chamber of commerce, civic and business organizations, political leadership and local businesses that can all benefit from the information. Invite key constituents to a press conference announcing results. Prepare letters to the editor that key leaders can send. Send a letter to businesses with the study results condensed in an easy-to-read quick reference collateral piece. Add key information as part of your boilerplate information on releases and other documents.

Keep the story alive by featuring people and businesses in the community who are directly impacted because there is a hospital in the community. It could be a profile of a local businessman about why she decided to relocate her business in your town citing the availability of quality medical care close by for employees.

The impact study is not just an insurance document. It sends a clear message to the community that the hospital should be supported and utilized and that issues affecting the hospital (such as tax challenges) affect the community.

It is easy to see why service lines that drive volume and revenue should have marketing resources devoted to them. It is less clear to see the implications of challenges and lawsuits that may just be in the back of someone's mind and not filed. Yet should you be challenged, these steps could provide some valuable defense material, just at a time when it is needed most..

Anthony Cirillo, CHE, ABC is president of Fast Forward Strategic Planning and Marketing Consulting, LLC in Huntersville, NC. He is a board member of the Society for Healthcare Strategy and Market Development, a Diplomate of the American College of Healthcare Executives and an Accredited Business Communicator of the International Association of Business Communicators. You may reach Anthony at Anthony@4wardfast.com

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