Who: Foundation Health Systems, Inc. (Los Angeles) and Physician Health Services, Inc. (Shelton, Conn.)
When: May 8, 1997 (announced); expected to become official end of year.
Total Employees: 1,022-Physician Health Services (PHS); 15,000-Foundation Health Systems, Inc.
Effect on PR/Marketing: For FHS, the nation's fourth largest publicly traded managed healthcare company, acquiring PHS, a full service health plan that serves more than 440,000 members in Connecticut, New York and New Jersey, dramatically increases its presence in this critical tri-state region of the East Coast. For PHS, the acquisition will strengthen its marketing muscle, allowing it to become more aggressive in its broadcast, print, direct mail and PR efforts and possibly lead to a new Web site. Although the acquisition has not been finalized, PHS's PR and marketing departments (14 total employees) are expected to remain intact. For the time being FHS, which recently underwent its own merger, is taking a hands-off marketing approach to the companies it acquires, while it figures out what its corporate identity should be.
Acquisition Campaign: Currently PHS spends about $2 million on its PR/marketing campaigns. FHS will kick in some funds to expand PHS's presence on the East Coast, but how much of a financial boost PHS will get is still undetermined. As one of the top five plans in the tri-state region, PHS outranks 29 other regional plans. To keep this momentum up the strategic approach will have to continue to be one of "clutter breakthrough," according to Alice Ferreira, director of public affairs at PHS.
A few months before the May announcement, PHS's PR and marketing staffers broke off into three strategic teams to inform its two key audiences (employees and media) of the proposed acquisition to prevent a misinformation crisis. The first team focused on employee concerns, the second, on investor calls and the third, on the press.
Acquisition PR/Marketing Challenges: