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Don't Let Bailouts, Economy Erode Your Hospital's Reputation

Gienna Shaw, for HealthLeaders Media, March 18, 2009

The healthcare industry might not be getting Federal bailout money or handing out executive bonuses or booking Sheryl Crow to sing at Hollywood fêtes. But Americans are angry at businesses, industries, and institutions. And if you're not careful, they might start to look at your hospital or health system with the same critical, distrustful eye.

The controversy over salaries and bonuses and business relationships couldn't come at a worse time for healthcare organizations, as the government, the press, and the public scrutinize the spending of non-profit hospitals with the help of the revised IRS form 990 schedule H. On that form, hospitals must not only report community benefit activities such as charity care, but also list the salaries and bonuses of their top leaders and highest-paid employees.

Kind of a touchy subject right now.

World-wide, trust in businesses plummeted in 2008, according to the 2009 Edelman Trust Barometer. About 62% of informed and well-educated adults aged 25 to 64 said that they trusted businesses less than they had a year ago, according to the survey, conducted by the Edelman public relations firm. No doubt the economic crisis influenced the results—the poll was conducted in December 2008.

The study also illustrates the impact bad relationships have on consumers' interactions with organizations. In one scenario, for example, respondents were asked to think about two companies—one they trust; one they do not.

Among the consumers who trusted a company:

  • 91% will buy their products or services
  • 76% will recommend them to family and friends
  • 42% will share their positive experiences online
  • And 55% will pay more to do business with companies they trust

Guess how many customers said they'd pay a premium to do business with a company they do not trust?

Of those that distrust a company:

  • 77% refuse to buy their products or services
  • 72% will criticize them to family and friends
  • 34% will share their negative experiences online
  • And, of course, none said they would pay more for the products and services of a company they do not trust

Sounds like a good time to polish up that reputation.

In the March issue of HealthLeaders magazine I wrote the first of a two-part series on reputation—this one focuses on building trust and improving your relationship within your primary market.

Three tips from the sources I interviewed for the story:

Robert Pascasio, CEO, Bayside Community Hospital: Identify your place in the market. "If you haven't gone out in the world and attempted to identify how the community perceives you, you need to do that and determine where to go from there. If you don't structure who you are and offer services the public wants, needs, and will pay for, then you're wasting your time and everybody else's."

Jim Banahan, president, Banahan Communications: Build relationships with physicians. "Medical centers or hospitals are really missing it by not building a stronger rapport with their physicians." But don't overlook direct-to-consumer marketing; it is possible to educate patients to self-refer or self-select.

Rhoda Weiss, healthcare consultant: Advertising won't necessarily increase profitability, awareness, and reputation. And it won't help build relationships. "It's not about the big ad; it's about the big idea . . . Healthcare organizations need to tell their stories. They need to tell their communities what they have and what they have to offer."

Your organization might deserve awards for citizenship. Trust in and loyalty to your organization might be sky-high. And your executives likely earn every penny of their compensation. Of course you would never pull so stupid a stunt as to, say, fly a private jet into Washington to ask for a handout.

But Americans are angry right now. You have to do everything you can to prevent that economy-fueled anger from trickling down onto you and your organization.


Gienna Shaw is an editor with HealthLeaders magazine. She can be reached at gshaw@healthleadersmedia.com.

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