Columbia/HCA Healthcare Corp. last week proposed another strategy for financing community benefits: Charge it.
Often derided by tax-exempt hospitals for delivering profits to shareholders, Columbia last week announced it would offer a credit card that will funnel dollars into community organizations.
The nation's largest hospital company will issue its own "affinity card" with Visa USA and People's Bank of Bridgeport, Conn. Of every $100 charged with the card, 35 cents will be invested in communities where Columbia operates hospitals.
"This program marks the first time that a major corporation, its employees and others have made such a tremendous commitment to community reinvestment with an affinity card," said Les Mann, senior vice president, healthcare marketing for Visa USA.
In recent years, affinity cards have become a popular marketing strategy in which issuers such as AT&T and General Motors provide rebates on their products based on credit card usage. Most recently, Blockbuster Entertainment Group issued an affinity card in which users receive 1% of their monthly charges in "Blockbuster Bucks" good for free video rentals.
Instead of giving rebates to credit card users, Columbia will give them back to the community. The program is expected to generate 100,000 credit card accounts and contribute about $1 million to community organizations annually.
Funding will be determined by a local board of community volunteers and Columbia employees. Boards will be established in each community where the 325-hospital chain operates.
The card has no annual fee and an initial annual percentage rate of 9.9%. After March 1996, it will be 13.9% for purchases and 11.5% for balance transfers.
"With the initiative to balance the budget in Congress, we believe there will be an increasing demand on the resources of community organizations," said Richard Scott, Columbia's president and chief executive officer. "By using the Columbia Visa card, people can join us in our efforts to improve the quality of life for people in our communities."
In recent years, Columbia has touted its community-benefit investment of $1 billion annually in uncompensated care. It also estimates that tax-exempt foundations valued at more than $1 billion have been set up via its acquisitions and joint ventures with not-for-profit hospitals.