Cape Girardeau hospitals wage advertising wars [St. Louis Post-Dispatch]
(St. Louis Post-Dispatch (MO) Via Acquire Media NewsEdge) Jan. 06--Barbara Thompson, vice president of marketing for St. Francis Medical Center in Cape Girardeau, commutes each week by commercial jet from her home in Wisconsin to southeastern Missouri.
She's a key player in the fierce battle for market share between Cape Girardeau's two nonprofit hospitals.
Her ad agency, the Waukesha, Wis.-based Roberts Group Inc., has a $10 million contract to deliver a battery of marketing services to St. Francis. That includes everything from TV and radio ads to newspaper and magazine ads to community events.
"Patients need to know that they have choices in health care and we need to educate them on the quality and services that we provide," said Steven C. Bjelich, president and chief executive of St. Francis Health Care System.
St. Francis spent about $11.5 million on "advertising and promotion" in fiscal year 2011. That's almost half of the $20 million the hospital paid to its largest contractor, McKesson Corp., a pharmaceutical distributor.
The medical center's ad budget amounts to nearly $46,000 per licensed hospital bed a year, or $130 a day per bed.
Yet, Bjelich said advertising expenses do little to drive up health costs.
Its crosstown rival, Southeast Health, spent $2.8 million on advertising and promotion in 2010, still a sizable amount for a hospital of its size. Jim Limbaugh, Southeast Health's executive vice president, said his hospital had chosen to spend less than its rival.
"At some point, you say, how much is enough There's a certain necessity to reach consumers through advertising, (but) we think that you drive business through relationships," he said.
Bjelich said that soon after he arrived at St. Francis in 1999, he began developing a strategic plan. The hospital had a three-person marketing department. "We were way behind," he said.
He hired the Roberts Group in 2000 to help buy broadcast time but soon decided to outsource all marketing operations to Thompson's firm.
Founded by Thompson in 1981, the Roberts Group has 30 employees. The firm's contract with St. Francis accounts for about 90 percent of its revenues. Although she carries the title of a St. Francis executive, Thompson is not paid as a St. Francis employee, its tax filing states.
Bjelich said the advertising dollars had paid off.
"We have a dominant market share," he said. "In 1999, we had 41 percent share, and now we're in excess of 52 percent market share."
Thompson's firm isn't the only one benefiting from St. Francis' ad spending. According to the medical center's tax filings, the nonprofit provides millions of dollars to some of Cape Girardeau's most influential media institutions, whose representatives also sit on St. Francis' board:
-- Wally Lage, a former St. Francis board member, served as chief operating officer of the Southeast Missourian newspaper in Cape Girardeau before his 2010 death in a boating accident. The daily paper's owner, Rust Communications, received $645,347 in ad money in fiscal year 2011.
-- Dennis Vollink, a St. Francis board member, is president of Drury Southwest Inc., which owns hotels and billboards. Drury received $446,796 for billboard ads.
-- Gerald Jones, a St. Francis board member, owns Cash-Book Journal News, which received $130,014 in ad money.
Bjelich said he saw no conflict of interest.
"Our board sets policy. The decision on who we utilize for marketing and promotion is a decision for management," he said.
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