Nonprofit hospitals focus on advertising, capital investments

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Some nonprofit hospitals are spending more on aggressive marketing campaigns and capital improvements than on charity care.

For instance, Missouri's St. Francis Medical Center put $11.5 million toward advertising and promotion in fiscal year 2011, while spending $2.7 million on charity care, reported the St. Louis Post-Dispatch. Meanwhile, nearby Southeast Health spent $2.8 million ad dollars in 2010 and $2.5 million on charity care.

Both nonprofits can boast several multi-million expansion and renovation projects, as well as new cancer treatment centers.

"It's sort of like keeping up with the Joneses," Southeast's Executive Vice President Jim Limbaugh told the newspaper. "One hospital would buy one red wagon, and the other hospital would buy two."

But the hospitals defend their fervent capital improvements and advertising campaigns, saying that new equipment, services and patients help them thrive in a medically underserved area with high levels of poverty and chronic conditions, the article noted.

Their efforts also go beyond just publicity, providing a public service that informs patients, according to St. Francis Health Care System President and CEO Steven C. Bjelich.

"Patients need to know that they have choices in healthcare, and we need to educate them on the quality and services that we provide," he said in another St. Louis Post-Dispatch article.

The healthcare arms race is nothing new. To continue their mission as safety nets for poor patients, nonprofit hospitals, including NewYork-Presbyterian/Weill Cornell, have been ramping up advertising and offering deluxe accommodations and luxury amenities to attract wealthy patients who are willing to pay more.

To learn more:
- read the Post-Dispatch article on rivalry
- here's the Post-Dispatch article on advertising

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