Running Out of Patients

Denver General Hospital and the city's neighborhood health clinics will soon launch their first-ever marketing campaign, but don't expect to see it in high-rent neighborhoods. It's aimed at Medicaid recipients--many of them poor people and minorities.

The $200,000 marketing program also is supposed to provide a "corporate identity" to the hospital, which may come in handy. The Department of Health and Hospitals hopes to soon declare its independence from the rest of city government, becoming an independent authority with a board appointed by the mayor. By operating as an authority, Denver General would be freed from the city's personnel and purchasing rules, and hospital officials say that would give DGH far more flexibility in its operations.

The city awarded the contract, which runs through October, to Burks, Butler & Esposito, a Denver advertising and public-relations firm specializing in campaigns that target the city's minorities. Susan Burks, president of the firm, gave $175 to Webb's 1995 re-election campaign. Her partner Virginia Butler gave the mayor $250. The contract was awarded by a selection committee that evaluated several competing proposals.

C.L. Harmer, director of public affairs for the Department of Health and Hospitals, says several other firms, including Kinzley-Hughes Inc. and a consulting firm headed by former state official Gail Klapper, were interested in the contract, but the city felt strongly that it should go to a firm with experience reaching minorities. About 70 percent of the patients at Denver's public health facilities are Hispanic or black.

"Our population is Anglo, African-American and Hispanic," Harmer says. "We have to communicate differently. We're not marketing to yuppies."

Until recently, almost all of the Medicaid recipients in Denver wound up at Denver General or at one of the city's ten neighborhood health clinics, but now those patients can take their business elsewhere: A new state program allows Colorado Medicaid recipients to choose their own health-care providers.

"Historically, there's been no competition," says Harmer. "Now other providers are competing for mothers and children. Medicaid is our single largest source of patient revenue, and we have to compete to retain the same population we've always served. It's a new territory."

Denver's other hospitals have large marketing budgets, and Harmer says the budget for Denver General's advertising, which will include billboards, radio spots, newspaper advertisements and direct mail, is small compared with those of its rivals. "If you compare what we're spending to St. Joseph's, this is a very modest budget," she says.

And finding the money to pay for it is apparently no problem. Just a few years ago Denver General was running a deficit, but changes in the formula the state uses to reimburse Medicaid costs, as well as a stepped-up effort to collect from patients, have given the department a $60 million reserve. "It's turned around our financial picture," Harmer says. "It's helped us do a lot of things. It takes money to make money."

Denver General and the city's network of clinics posted 400,000 outpatient visits last year, and Harmer says the city has vowed to improve its services to low-income residents. "We set the system up for ourselves, not the patient," she says. "We're trying to do a better job with customer service."

Besides marketing, Denver General has taken other steps to position itself in the highly competitive health-care field. The hospital recently announced it was partnering with several other nonprofit Colorado hospitals, including University Hospital, Children's Hospital and Boulder Community Hospital, to offer integrated health-care services to insurers and employers around the state.

Denver City Councilman Ted Hackworth is skeptical of both the city's decision to direct the marketing campaign to minorities and the selection of Webb supporters for the job. "In announcing the selection of this firm, they indicated they needed a minority firm," Hackworth says. "I questioned that. It wasn't a matter of affirmative action; they just wanted to appeal to minorities." Hackworth says he has no proof that campaign contributions influenced the city's selection of Burks, Butler & Esposito, but he remains suspicious. "In government, that always has something to do with it," he says.

Harmer takes exception to any suggestion that the contract was a payback for political contributions to Webb. "That contract was not awarded because of any relationships to the mayor's office," she insists. "Burks, Butler & Esposito are highly qualified." (Klapper, who competed for the contract, also donated to Webb's campaign.)

Harmer says Hackworth's criticism is mainly political. "Ted Hackworth told me we were screwing up on our marketing because we were marketing to people who don't pay their bills," she says. "Councilman Hackworth is an opponent of affirmative action, and I think he's looking for scapegoats."

Burks acknowledges that she and Butler have been longtime supporters of Webb but says that, as far as she knows, that had nothing to do with her firm's selection. "I'd like to think we acquired the contract based on our abilities," she says. "We had to present our qualifications and get reviewed, and we followed all the proper steps.

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Stuart Steers
Contact: Stuart Steers