Just before Thanksgiving last year, construction began on the Lehman Bros. Emergency Center, a $25 million project at New York University Downtown Hospital that was made possible through a $5 million donation from the giant investment banking firm whose name will eventually adorn its entrance.
Wall Street played a prominent role in another corporate branding tie-in with a New York City hospital in recent months. About the same time ground was being broken on the Lehman project, the $120 million Morgan Stanley Children's Hospital of New York-Presbyterian made its debut on the north end of Manhattan, a few miles from the Big Board's headquarters.
The cost of the hospital was covered entirely by philanthropy, including personal contributions of about $60 million from more than 600 Morgan Stanley employees. Donations for the borough's only pediatric hospital also streamed in from other big-name players in New York's financial community, including J.P. Morgan Chase & Co. and Goldman Sachs.
A headline in one publication called it "The children's hospital that Wall Street built."
For cash-strapped hospitals struggling to raise funds for new facilities, this emphasis on donations for capital projects is almost certain to grow over the next several years. And while there is nothing new about hospitals plastering the names of corporate or philanthropic partners on the sides of buildings, wings and pavilions, this brand of fund-raising has made a big splash in recent years, highlighting the kinds of private philanthropy that many other public, not-for-profit organizations--including colleges and universities--have relied on for decades.
"Schools of medicine and hospitals are no different than the universities and the arts--we're all under increasing stress," says Gerald Levey, dean of the David Geffen School of Medicine at UCLA, which was named after the entertainment mogul who donated $200 million to the university in 2002. "The only way we can do this is to turn to the private sector. It's our goal--and the goal of everyone--to develop people who have the kind of affection for their institutions (as Geffen does for UCLA)."
Super-rich benefactors such as Geffen aren't the only big-time donors hospitals are courting. In some cases, international companies have provided large gifts for naming rights, a course that others might follow in coming years.
In fact, UCLA is the home of Mattel Children's Hospital, Los Angeles--one of the most high-profile examples of co-branding in U.S. healthcare, along with a second pediatric facility bearing the moniker of another famous toy company, the Hasbro Children's Hospital at Rhode Island Hospital in Providence. And Jackson Memorial Hospital in Miami is the site of the Ryder Trauma Center, which takes its name from the South Florida-based truck-rental company that donated about $2.5 million to the safety net hospital in the early 1990s.
What's next? Microsoft General? Time-Warner Medical Center?
Unlikely, says one advertising and marketing expert.
"In order to fill beds and be both competitive and profitable in a difficult environment, branding is becoming much more of an issue for hospitals," says Robert Henrie, a principal in R&R Partners, a national advertising firm with about 70 clients, including hospital systems such as Intermountain Health Care in Salt Lake City. "Blending names with a corporate sponsor has happened a few times--Mattel, Hasbro, the Morgan Stanley Children's Hospital in New York."
Yet while Detroit's Henry Ford Health System stands as a case study in sponsorship, commercial tie-ins as a marketing tool have not swept healthcare to the same extent that it has transformed America's sports stadiums into colossal advertisements for everything from brokerage firms and banks to airlines and fruit juices.
But the times are changing, at least in terms of a renewed emphasis on individual, if not corporate, naming rights at hospitals. Caught in a continuing budget crunch--about one-third of America's hospitals are losing money--healthcare executives and foundation staffers across the nation are seeking ever-more creative ways to raise cash for new facilities.
In fact, officials at New York-Presbyterian, home of the Morgan Stanley Children's Hospital, say the facility may be the only one of its size and cost ever built entirely with philanthropic funds.
"This is one of the real strong and positive spirits of this country," says Herbert Pardes, New York-Presbyterian's president and chief executive officer. "People are willing to do something to help nonprofit institutions like ours.
"There's a central point here. Capital in healthcare systems is very low. Margins are low. Reimbursements are barely making it. I applaud philanthropy as a way of helping make sure that medicine remains strong in this country."
Branding gets personal
Although most hospitals have not sought commercial sponsorship deals with the likes of carmakers and cell phone services--at least not yet--they have intensified fund-raising efforts aimed at wooing wealthy individuals like Pat Sajak, the "Wheel of Fortune" host who donated $1 million to Anne Arundel Medical Center in Annapolis, Md., where a breast-cancer center is now housed in a pavilion named after him and his wife, Lesly.
"Hospitals are saying, `Give us money, and we'll name a wing after you,' " says Steve Rivkin, a marketing consultant and branding expert, who edits a quarterly publication called the Naming Newsletter. "Give us more money, and we'll name the whole building after you."
The bottom-line question, however, is whether these tie-ins with either commercial brands or private individuals provide much in the way of brand identity or marketing muscle. While few would question that it's nice to garner these big gifts, hospitals probably won't increase business--or boost income--by renaming wings after prominent celebrities or large corporate donors.
As a relatively small number of hospitals seek this kind of corporate branding, most development officials have ramped up a fairly traditional version of this fund-raising philosophy, targeting members of the community as a key source of cash.
For many years, hospitals rewarded generous benefactors with simple plaques on lobby walls. That's now almost archaic, a part of healthcare nostalgia as outmoded as mercury thermometers. Multimillionaire patrons expect far more than this modest recognition to mark their generous contributions. At the same time, it doesn't hurt the hospital's image--or brand--to have a building or wing associated with celebrities, sports stars, political figures or well-known philanthropists.
The greater Fort Lauderdale, Fla., area alone boasts several major pediatric healthcare facilities named after sports celebrities, including the Joe DiMaggio Children's Hospital in Hollywood; the Miami Children's Hospital Dan Marino Center in Weston, which is dedicated to the evaluation and treatment of children with special needs; and the Chris Evert Children's Hospital at Broward General Medical Center in Fort Lauderdale.
Evert--a local heroine who grew up playing on tennis courts a few blocks from the hospital and who was a dominant force in women's tennis for more than a decade in the '70s and '80s--enthusiastically agreed to donate her name to Broward General's not-for-profit hospital for women and children in late 1996, says CEO Joseph Scott. The facility recently held a 20th reunion at the neonatal intensive-care unit that attracted scores of former patients and family members along with the internationally recognized tennis star whose name is used to help sell the hospital and its services.
"She's always had a close relationship with the hospital," Scott says. "She has celebrity status. And we can use her in any of our marketing materials. Our relationship has definitely been good for business."
At Anne Arundel, officials in the development office approached Sajak in fall 2000 during the height of a fund-raising drive for a new breast-cancer center. His wife had given birth at the hospital in downtown Annapolis several years earlier, and the longtime residents appeared to be likely prospects as donors in a county where the rate of breast cancer is much higher than the national average.
"They were very impressed with the number of people they could help with a gift," says Lisa Hillman, the hospital's senior vice president and chief development officer. "We asked them to consider a gift of $1 million, and Pat promised to call back within two weeks. He called back and said, `Lisa, we're going to make this gift not because we have breast cancer in the family but because this is our community and we want to help.' "
The Lesly and Pat Sajak Pavilion, a $2.5 million project, opened in March 2001.
"Does it seem counterproductive to see names everywhere?" Hillman asks. "Does it seem strange? Well, success breeds success."
At Northwestern Memorial Hospital in downtown Chicago, for instance, the 22-story ambulatory-care pavilion is named after longtime benefactors Dollie and Jack Galter, who reportedly donated about $10 million for the building. A second gift of about $10 million ensured that they would be remembered at the Galter Health Sciences Library at Northwestern University. The 492-bed Feinberg Pavilion, which is next door to Galter and serves as the inpatient wing of the $580 million hospital, is named after the Joseph and Bessie Feinberg Foundation, which has provided more than $103 million to Northwestern University. A $75 million gift from the foundation in 2002--the largest single donation to a Chicago university--led to the naming of the Feinberg School of Medicine.
Still, the proliferation of names on everything from pavilions to patient rooms can cause headaches for hospital marketing departments. Once you name anything after a donor, it's almost impossible to change it. And long names that serve as legacies for an entire family can be confusing or distracting from a marketing standpoint.
"It just becomes hard to use all these names that are out there," says Daniel Fell, a healthcare marketing expert who is a partner at the consulting firm of Daniel & Douglas & Norcross. "It can become very political. And if you're in a rebranding process, it can be very difficult to change them."
Commercial tie-ins face similar stumbling blocks. The most obvious is the threat that your new corporate partner will fail or--worse yet--become embroiled in a scandal that could tarnish the hospital's reputation.
"A corporate sponsorship with the right company can bring real credibility," Fell says. "But you've got to be careful. What's more, the bigger the brand name--like Mattel--the more it's going to compete with whatever the organizational brand and identity was before. You can give up some of your brand with these deals. If you're running ads for the Mattel Children's Hospital, it may or may not be clear to consumers right off the bat whether they're about the toy company or the hospital."
By the very nature of the sympathetic and emotional work they do for their patients, children's hospitals and cancer centers are prime specialty areas for naming opportunities and big donations from individuals and companies. Among the many well-known examples are the Walt Disney Cancer Memorial Cancer Institute at Florida Hospital Orlando and the University of Texas M.D. Anderson Cancer Center, named after Monroe Dunaway Anderson, a wealthy Houston businessman whose company was the world's largest cotton merchant in the early 20th century.
Three years ago, Bristol-Myers Squibb Co., one of the nation's leading drugmakers, paid $5 million to have its name attached to the first free-standing children's facility in New Jersey at the Robert Wood Johnson University Hospital in New Brunswick. Hospital officials say there were no strings attached. A spokeswoman for the drug company, the biggest private employer in the surrounding Middlesex and Mercer counties, said at the time that the sponsorship was a "wonderful opportunity to partner with one of the leading hospitals in the region."
But some observers are a bit more cynical about the driving force behind such seemingly civic-minded largess. "Let's face it, Bristol-Myers Squibb and other companies have a vested interest in reaching either the buyers, so to speak, at the hospital, and consumers," says William Chipps, senior editor of the IEG Sponsorship Report, a twice-monthly newsletter with about 20,000 readers, which tracks corporate trends in co-branding and marketing. "You'd have to be pretty naive to think there isn't a marketing element here. Of course, it is warm and fuzzy, and they are giving something back (to the community)."
In Georgia, an insurance company known for advertisements featuring a boisterous duck forged its own long-term deal for the naming rights to the AFLAC Cancer Center and Blood Disorders Service of Children's Healthcare of Atlanta. The Columbus, Ga.-based insurer committed $3 million in 1995 to expand a basic pediatric ward at the system's two children's hospitals. In 2001, the company committed an additional $2 million a year for five years, while its national sales force pledged another $10 million over three years, says Diane Vaughan, senior development officer at the children's hospitals.
"AFLAC is a dream donor," says Vaughan, adding that the company also provides the children's hospitals with the proceeds of the online sale of its trademark duck. (About 63,000 of the stuffed animals have been sold so far at $10 apiece.)
It's yours if the price is right
In the search for creative ways to raise cash, some hospitals have gone so far as to produce itemized price lists for naming rights, outlining precisely how much a donor must provide to have a name attached to a building, a room, a wing or a pavilion. Denver Health, an integrated system in Colorado's capital city that includes the flagship 291-bed Denver Health Medical Center, produced what officials describe as a "draft list" outlining costs for naming opportunities for everything from entire buildings ($20 million) and "visitor sleeping chairs" ($1,200 apiece) to second-floor family lounges ($200,000) and a correctional-care facility visitation area ($100,000).
In the Boston area, Harvard University has put the naming rights to a 6-month-old research building on the market for a cool $100 million.
At what point does this descend into crass commercialism, transforming healthcare facilities into bazaars where anything and everything has a price?
To Rivkin, the marketing expert who has authored a branding book titled The Making of a Name, the renewed focus on commercialism runs the risk of turning some healthcare executives into hucksters who put a price on just about everything associated with the hospital. That, he says, is not good marketing.
"Would I counsel a hospital to become linked with a toy company or something else?" Rivkin says. "Only if they're desperate. It's not good to give the perception of selling out."
Other experts dismiss such a gloomy perspective, saying that hospitals are like many other public-spirited institutions that need to tap into donors of all kinds to thrive--or just to survive.
"This (fund-raising strategy) isn't below anybody. Talk to Harvard or any other major university about how they raise money," says Bill McGinley, president and CEO of the Association for Healthcare Philanthropy.
It should come as no surprise that Southern California, ground zero for super-rich celebrities, is fertile territory for development officers, and has been for many years. Almost 15 years ago, Steven Spielberg, one of Hollywood's biggest names, donated $5 million to Cedars-Sinai Medical Center in Los Angeles, which has been nicknamed the "hospital of the stars." The director's donation went to the Steven Spielberg Pediatric Research Center on the hospital's sprawling campus.
Meanwhile, some of Ronald Reagan's friends have vowed to raise about $150 million for the right to have UCLA's new medical center bear the name of the nation's 40th president. In addition to Geffen's $200 million endowment--the institution's biggest single one-time gift--the university in 1998 named its children's hospital for Mattel after receiving a donation of $25 million from the toy company's foundation.
"It's been a wonderful partnership for everyone," says Levey, the dean of UCLA's medical school. "It's clear that we have benefited. Not only do we have the Mattel name, which is synonymous with the best in children's toys, but it has filled a niche for their company. They're associated with one of the world's great institutions, one of the world's great pediatrics departments."
While UCLA has the company that created Barbie, Rhode Island Hospital has teamed with Hasbro, the marketer of such American icons as G.I. Joe, Monopoly and Tonka trucks. The Providence, R.I.-based toymaker, a local philanthropic force since its formation in 1923, donated $2.5 million to help fund the hospital's construction about a decade ago.
In Denver, entrepreneur Philip Anschutz, one of the world's richest men, has donated about $66 million over the past few years to the University of Colorado's sprawling new medical complex east of the city. The university's principal medical facility, including the new hospital, is now called the Anschutz Centers for Advanced Medicine at University of Colorado Hospital.
Dennis Brimhall, president and CEO of the University of Colorado Hospital since 1988, says the institution has raised more than $100 million over the past five or six years toward its $450 million relocation project to the site of an old Army base east of downtown Denver. Brimhall says he barely involved himself in development plans as recently as five years ago. Now, he's spending "30% to 40%" of his time on fund raising.
"I didn't dare to ask anybody for a dime in the old days," Brimhall says. "We realized we had limited access to capital, and that if we were going to succeed, we had to develop an alternative to reserves and borrowing. So, I just had to learn to do this."
Brimhall says he's been relatively low-key about the naming opportunities and doesn't have a published list to provide potential donors. Still, he acknowledges, almost anything is fair game: VIP suites, walkways, gardens, rooms, wings, diagnostic facilities and medical equipment. In fact, a positron emission tomography scanner is named after the deceased wife of a prominent Denver businessman.
And Brimhall, now an aggressive proponent of fund raising, isn't averse to following the lead of local sports franchises like the Broncos, who play at Invesco Field at Mile High; baseball's Rockies, who play at Coors Field; and the Avalanche hockey team, which plays at the Pepsi Center.
"Most of the giving has been private," says Brimhall, who concedes that he couldn't strike a deal with big-name local companies like Qwest Communications or United Airlines, which already has spent millions for naming rights for the home of Chicago's Bulls and Blackhawks. "We've tried on the corporate side and have not been particularly successful. The corporate market in our area has been hunkered down. But hope springs eternal. It's just finding the right match."
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