CHAPTER4 Community Relations 63 CASE 42 COMMUNITY RELATIONSHIPS MAINTAINED DURING HOSPITAL CLOSING Throughout the 19805 and early 19905, busi- ness and the government trimmed whatever fat there was from the he althcare system. In 1997, Congress passed the Balanced Budget Act in an attempt to reform Medicare and trim waste from the system. But cuts went billions of dollars beyond expectation. Now, the healthcare system is in a nancial crisis. Health premiums aren't paying for the cost of services. Hospitals are being squeezed by managed care companies that are having their own financial troubles. One conse- quence is the closing of hospitals MERCY HOSPITALDETROIT'S STRUGGLE The east side of Detroit is among the most troubled urban areas in the United States. struggling with a multitude of social and economic challenges. Mercy Hospital Detroit was an important anchor in this neighborhood, not only providing access to he althcare, but also security, employment, leadership, and a place for social interac- tion. It relied heavily on Medicare, Medicaid, and other government sources for its business nearly 80 percent of its total admissions. In the early to mid-1990s, Mercy HospitalD etroit found it increasingly dif- cult to maintain its scal health; operating losses were supplemented by the hospital's 1Renamed Trinity Health after a May 2000 merger. parent company, Mercy Health Services (MHS).1 Then, in 1997, the Balanced Budget Reconciliation Act severely reduced Medicare and Medicaid reimbursements. The already struggling hospital was devas- tated by the cuts. Losses of $1.5 million per month began to mount. The federal and state funding cuts similarly affected operat- ing margins at Mercy's other hospitals The MHS Board was faced with system-wide nancial constraints that put the system's bond rating at risk. Operating losses at Mercy HospitalDetroit totaled nearly $100 million from 19902000. In the hope of finding a buyer, a series of discussions with major Detroit health sys- tems ensued in 1999, but all were facing the same circumstances: increasingly ill patients with no health insurance and decreasing reimbursements from the government. The decision was made to close the hospital in December 1999. Mercy HospitalDetroit quickly became a national example of the evolving healthcare crisis in the United States. SEVERAL PUBLIC RELATIONS ISSUES EMERGED > How can the hospital close with- out giving the impression of aban- doning the city and its poorest residents? 84 CHAPTER4 Cammunity ReIarmm > Is it possible to close the hospital while still maintaining the excel- lent reputation of MHS and its sponsor, the Sisters of Mercy? > How can Mercy coincidentally acquire a similar-sized hospital in a predominantly white suburban community without attracting major criticism and, worse yet, accusations of \"racism\"? RESEARCH Preparations began as early as 1997 when Mercy HospitalDetroit commissioned a research study to obtain community opinion and attitudes. The study showed that parent company MHS was held in high esteem and that the local community not only counted on Mercy HospitalDetroit but saw it as an entitlement for the community. Meanwhile, the commitment to the community from the Sisters of Mercy and the MHS Board led MHS management to conclude that it should donate the 10-year- old building to the community. Instead of simply selling the hospital campus to a developer for commercial use, MHS decided the hospital should be converted as a long-term community asset to enhance neighborhood revitalization, and the new owner(s) and users should share the mission and values of the hospital's parent, MHS. Additionally, MHS decided to keep a pres- ence on the hospital campus by earmarking $2 million for a primary care clinic for the uninsured. In doing so, Mercy supported its mission of \"care for the poor and under- served\" while seeking a new owner for the larger block of property and buildings The next step was a major study in early 2000 just after the announcement of closure consisting of personal interviews with 198 Detroit community and opinion leaders, including elected officials, clergy, and major business and social service agency representatives, to obtain ideas about how to \"do the right thing\" and \"give bac \" to the community, rather than simply close the hospital and move on. The per- sonal interviews provided valuable input on specic community needs, possible organi- zations that met the criteria as a new owner, and communication tactics for most effec- tively reaching the important audiences of key community leaders and area residents, many of whom are without transportation or telephones. The interviews also helped crystallize other audiences to target: > Mercy HospitalDetroit employ- ees, medical staff, board members, and volunteers Y Mercy's leadership group (40 top management personnel nation- wide) and other corporate office employees Community religious leaders Local physician leaders Regional and national partners Major insurers VVYVY Archdiocese of Detroit and Bishops in all MHS markets Michigan's governor and staff Detroit's Mayor and key aides The Wayne County Executive and key aides Detroit City Council Trade and healthcare consortia 99,000 residents in the primary service area VVV VVV THE PUBLIC RELATIONS PLAN A public relations plan was developed to reach these audiences using a variety of tacticsnot relying on advertisingincluding specic ways to obtain their input and feed- back. Tactics in the plan included e-mail; a telephone hotline; staff and community town hall meetings; targeted letters to vol- unteers, community leaders, and others; the hospital newsletter; editorial board meet- ings with Detroit's two daily newspapers, weekly business newsmagazine, and African-American weekly; formal closure notices in community newspapers; direct- mail letters; and news releases, fact sheets, and backgrounders. The key messages to communicate were: \"Mercy can no longer tolerate this level of losses or be supported by others within the Mercy system,\" \"Mercy is 'doing the right thing' by donating the property to help meet community needs," and \"Mercy continues its ministry for the poor with a new primary care center for the uninsuredinvesting $2 million per year to make that happen.\" PLANS WERE EXECUTED WITH PRECISION Plans began with a carefully implemented effort to obtain balanced stories as early as September 1999about the difficult nancial situation and the possibility that Mercy HospitalDetroit may close. This was followed with a series of editorial board meetings with Detroit's two dailies, the weekly business newsmagazine, and African-American weekly. Similar meetings were later held with community leaders and the Detroit City Council. The generally fair and favorable editorials and news coverage resulting from the meetings helped educate Mercy's key audiences and would later help them understand the reasons for closing. Media coverage reached a crescendo in January 2000 and has continued through March 2001, including NBC Nightly News and several national trades. A total of 10,000 letters were mailed to residents' homes within three eastside ZIP codes. All audi- ences received the news of Mercy HospitalDetroit's closing and, although disappointed that Detroit's east side would CHAPTER4 Command): Relations 65 lose an acute care hospital, they were gener- ally understanding of the situation. Excluding a regulatory requirement to place a \"Public Notice \" advertisement in local newspapers, no other form of advertis- ing was used to reach the audiences EVALUATION In late 2000, the Mercy HospitalDetroit building was donated to a multi-service community organization (SER Metro) and a Catholic organization serving youths and families (Boysville). Other new tenants on the former hospital campus include Mercy Primary Care Center to serve the unin- sured, the National Council of Alcoholism and Drug Dependency, Head Start, Child Care Coordinating Center, the Detroit Fire Department, and McCauley Commons' independent housing. The revamped cam- pus promises to continue providing a posi- tive, major impact in the community. Balanced media coverage told the story fairly. Personal interviews with a sample of 20 (from the list of those previously inter- viewed) were extremely positive. Internal meetings were equally positive. Employees from Mercy HospitalDetroit, many of whom would be without jobs, gave Mercy Detroit's CEO a standing ovation after he explained the closing and transfer of the hospital. The nal test came when MHS announced the purchase of St. Mary Hospital, a 300-bed hospital in the Detroit suburb of Livonia, only four months after closing the inner-city Detroit hospital. Without the effective public relations pro- gram on the closing of Mercy Hospital Detroit, the announcement to acquire a new hospital in a predominantly white suburb could have caused signicant editorial scrutiny and community backlash that would surely damage MHS' reputation (just one month after its merger with another 86 CHAPTER4 Cammunity Relations major national health system to create Trinity Health) and hamper its future growth. All internal and external audi- ences met the announcement of the St. Mary Hospital acquisition, except for minor exceptions, with support and encouragement.2 I QUESTIONS FOR DISCUSSION 1. You are the public relations director The plan calls for input and feedback of the closing hospital. Your public relations plan calls for a community town hall meeting. Some people in the community don't have phones or com- puters. How will you alert everyone about this meeting? When will you hold it? How many times? Who will attend from the hospital? What is your goal for the meeting and how will you achieve that? Put together a plan from the community. What will you do with their feedback? What if your CEO is unwilling to listen? 3. Take as an example the hospital closest to where you live. Who do you think are the opinion leaders for that hospi- tal? Make a list and identify them by their position in the hospital, how they would be contacted and what the mes- sage strategy would be. addressing these issues. 2. Many depend on the hospital for their own and their children's health needs. 2Thank you to Stephen Shivinsky, APR, vice president of corporate communications and public relations at Trinity Health for this case study