200 Doctors Form Group to Save Hospitals
An unusual deal is brewing in which doctors are coming to the rescue of two Chicago hospitals. If approved, the owner-doctors will be thrust into a new leadership role with intimate involvement in marketing and PR.
A group of 200 doctors is in the final stages of taking over Chicago's Michael Reese Hospital, a 523-bed operation serving mostly lower-income African-Americans and Hispanics, and Grant Hospital, a 212-bed facility serving an upscale North side community. Michael Reese is a debt-ridden but highly respected 120-year-old provider.
The two hospitals, owned by Columbia/HCA, have been struggling financially for the past decade and were put on the block last fall.
To finance the $60-million acquisition, the doctors formed Reese-Grant Acquisition Group, in partnership with Doctors Community Healthcare Corp. (DCHC), a health management firm in Scottsdale, Ariz. The agreement, signed last week, is contingent on approval by Illinois regulators, which is expected next month.
Under the agreement, the doctors will have only 20 percent ownership but will run day-to-day operations.
Industry analysts are calling the deal an example of doctors responding to managed care's cost-cutting limitations by carving out a frontline position in how healthcare will be shaped in certain markets.
The doctors built their careers at the two institutions and have a personal stake in their survival, says Sharon Kirsch, DCHC's, director of corporate communications.
But the transaction is compelling from a communications perspective because the physicians will direct the marketing strategy and community outreach activities.
DCHC hired a Chicago-based agency, Greenhouse Communications, for a short-term new hospital/logo campaign. If the deal gets the green light, the acquisition group will decide whether to keep the agency.
Internal Buy In
After the deal is approved, resolving the myriad employee communications issues will be among the first priorities, Kirsch says, adding that employees did not seem to receive formal news of the proposed acquisition until DCHC recently issued a press release.
When HPRMN contacted Columbia's media relations manager, Jeff Prescott, to find out if it had issued its own press release and kept employees apprised of the sale process, he said simply "the employees know that the transaction exists."
He also said that it had been a while since he'd spoken with the marketing staffs at the two hospitals.
To make the transition smooth, DCHC is working with the acquisition group to develop an employee stock ownership plan, install a community representative on its board, develop bi-laws and a new hospital mission. (DCHC, Sharon Kirsch, 602/348-9800;Columbia/HCA, Jeff Prescott, 615/344-5708)