Community Relationships Maintained During Hospital Closing

Community Relationships Maintained During Hospital Closing

The case study revolves around Detroit city's Mercy Hospital that had to discontinue its operations in March, 2000 due to heavy cuts in federal and state hospital payments. The case study provides information on hospital's PR plan that was crafted and executed with utmost precision. Furthermore, the case-study discusses how Mercy Hospital's PR strategies helped the hospital effectively communicate the hard news to a myriad of publics while maintaining positive relations with the community.

CASE SUMMARY

Mercy hospital was located in the East-side of Detroit, one of the most poverty-struck areas dealing with a plethora of social and economic issues. Mercy hospital maintained an excellent reputation and was a valuable community resource that not only provided healthcare but also catered to a multitude of services such as security, leadership, employment and a place for social interaction. Ever since Congress passed the Balanced Budget Act in 1997, Detroit's Mercy Hospital started facing extreme financial pressure. Eighty percent of Mercy's patients relied on Medicare, Medicaid reimbursements and other government programs. The hospital's financial stability was further impaired when the Medicare and Medicaid reimbursements were severely reduced under the Balanced Budget Reconciliation Act. Mercy started bearing losses of 1.5 million per month and the total operating losses totaled around $100 million from 1900-2000. Considering its dwindling ability to recover its costs of providing services, the hospital was forced to take the decision of closure.

PUBLIC RELATIONS IMPLICATIONS

As mentioned above, Mercy Hospital was a valuable resource for the community of East-side Detroit. Thus, the hospital closure news could have led to several public relations implications some of which are discussed below:

 There was a strong possibility that the closure of Mercy Hospital could lead the public to believe that the hospital was unresponsive to the needs and desires of the city and its poorest residents. This could severely damage the reputation of Mercy Health Services (MHS), the hospital's parent company and its sponsors, the Sisters of Mercy.

 Also, Mercy hospital's decision to acquire a similar sized hospital in a predominantly suburban white community could lead to community backlash and the hospital could be accused of being racist. Additionally, the hospital had to communicate the closure news to a plethora of publics including hospitals employees, leadership groups, community leaders and many more. Thus, the public relations staff at Mercy was confronted with a huge issue that required them to design a strategic plan.

SITUATIONAL ANALYSIS