Few crises test the strategic endurance of a communications department the way an impending hospital closure does. But maintaining credibility throughout the closure process is
critical for health systems with multiple facilities. Flawed management decisions, incomplete outreach and insensitive messages can spell the demise of a parent organization's
image long before one of its hospitals closes.
In the second part of our two-part series on crisis management, we show you how to survive this dilemma with your reputation intact. It requires early, honest and consistent
communications about how the hospital's future was threatened and what options it considered before deciding to pull life support. More healthcare organizations will have
to confront this bleak reality as declining occupancy, lagging revenues and rising costs make it impossible for some hospitals to stay afloat. In 1997, 38 hospitals closed, a
slight increase from 1996 and 1995 when 37 hospitals closed, according to the federal Office of the Inspector General.
Cleveland, which is in the throes of a heated and unresolved healthcare crisis, has become an unfolding case study in how hospital closures can spark community outrage, last-
minute litigation and political finger-pointing when key stakeholder audiences aren't given enough of a heads-up.
Last month, Primary Health Systems (PHS), which owns four Cleveland-area hospitals, announced that it had to close Mt. Sinai Medical Center-University Circle, a major teaching
hospital with a 98-year history. Two weeks later, PHS announced that two of its other hospitals would meet the same fate, Mt. Sinai Medical Center-East in Richmond Heights and St.
Michael Hospital. The closures cumulatively are expected to wipe out care for thousands of low-income patients and eliminate 1,700 jobs. PHS has been on shaky financial ground
since it sought protection under Chapter 11 last year. At the time of the filing, PHS had assets of $157 million and liabilities of $237 million.
When the last round of closings were announced, a political debate erupted between the mayor and the city council that led to a temporary restraining order to keep St. Michael
and Mt. Sinai Medical Center-East open. The closings also caused a ripple of community rallies, attracting thousands of frustrated citizens who denounced the closings and put
pressure on elected officials to keep them open.
Doomed Communications
By the time Ed Nebb of BSMG Worldwide was brought on board last year to handle the communications surrounding the Chapter 11 filing, he had to make the best of a bad, rumor-
ridden situation. Employees and physicians felt that PHS was less than forthright about the decision to close the hospitals and waited until the last minute to disclose the
critical information. When PHS announced the closing of Mt. Sinai Medical Center-University Circle, it highlighted that the closure would not affect operations at its other
facilities. This statement haunted the hospital owner when it announced the need to close two of its other facilities two weeks later. Although Nebb says that throughout the
closure process the communications goal has been to be as factual as possible without making unrealistic promises, he concedes that "[PHS'] crystal ball has been particularly
cloudy."
In addition, the litigation, which is prolonging the closure process, blindsided PHS and significantly muzzled its communications. By all accounts PHS' embattled image will
deteriorate even further by the time the dust settles on the legal battle and it exits the market.
Light at the End of the Tunnel
Not all hospital closures have to end in angry accusations and community backlash. HPRMN spoke with two healthcare organizations that recently survived this situation.
Mercy Hospital in Detroit, owned by Mercy Health Services in Farmington Hill, Mich., shut down in January and Kaiser Permanente pulled out of the Northeast market (New York,
Vermont, Connecticut and Massachusetts) last year. These organizations relied on early, well-orchestrated communications with critical audiences to convey credibility throughout
the tough decision-making process to discontinue services. For Kaiser this process began in 1998 when it was considering turn-around options to salvage the health plan that had
lost $65 million in FY 1997 and $90 million in FY 1998. "At that point we said we needed to explore all [turn-around] options, including divestiture," says David Rooney, who
headed up Kaiser's communications. Rooney now works for Sawchuk, Brown Associates, the PR agency that handled Kaiser's crisis communications.
By the time Kaiser announced that it needed to leave the market because of worsening financial pressures, the decision was regarded as unfortunate but understandable.
Mercy Hospital's closure was regarded with similar acceptance. In January 1999 Mercy talked to healthcare leaders, government officials and the Catholic community about its
plummeting financial situation. By the time the hospital announced the need to close, it was losing $2 million a month and though the community was frustrated with the decision
they understood that the MHS exhausted all of its options. Throughout the final phases of the closure process, MHS also aggressively publicized, through media relations and direct
mail, that patients could access similar healthcare services within a five-mile commute once the hospital closed. "It was important for us to communicate to the community that we
weren't abandoning them," says Leigh Sullivan, MHS' manager of corporate communications. To this end, MHS is working with a consulting firm that will allow the hospital facility
to be used as a community service center.
(PHS, Ed Nebb, 212/445-8213; Sawchuk, Brown Associates, David Rooney, 518/462-0318; MHS, Leigh Sullivan, 248/489-6032)
Closures Don't Have To Kill Your Reputation
There's no way to avoid the anger and desperation a community feels when a healthcare organization decides to permanently close its doors. But communicators can establish
respect and credibility for the difficult decision by:
- opening lines of communication with key stakeholder audiences, like employees,
elected officials, vendors, physicians, and business/community leaders as
soon as possible about the potential for closure; - being candid about your financial status;
- media training executive management on discussing all worst-case scenarios;
and - keeping physicians in the loop throughout the closure process, not at the
tail end of it.