Driving by Grady Memorial Hospital while in Atlanta a few days ago reminded me of the controversy last spring concerning the hospital’s marketing budget. Grady had announced it would invest $1.5 million in marketing communications in 2010. That’s up $500,000 from its typical annual budget.
Georgia State Senator Vincent Fort lashed out at the hospital saying that investing “$2.5 million over two years is indefensible.”
Given that Grady’s 2010 operating budget is $740 million, $2.5 million over two years is less than .2 percent — or about one-third of what the average hospital spends on marketing according to the American Hospital Association’s Society for Healthcare Strategy and Market Development (SHSMD). By any measure, that’s extremely reasonable – and, Sen. Fort, not only very defensible but desperately needed for an institution whose problems include very negative perceptions.
Given the political season, I couldn’t help but wonder if Sen. Fort was as restrained in his campaign spending as he expects Grady to be.
Seems he was not. As of his October 25th campaign finance report (which excluded the final week of very expensive campaigning) Sen. Fort had already spent over $213,000 to win an office that pays $17,000 a year ($24,000, if you include his per diem).
That’s almost five times the salary and per diem for his two year term. I guess he needed to deal with a few perceptions of his own.
Unlike state senators, hospitals must earn revenue. The brand perceptions of hospitals are critical to market share and, therefore, the generation of revenue. If a state senator can spend 500 percent of his income to keep his job, I think it’s entirely reasonable — not to mention very smart — for a hospital to invest a small fraction of one percent without self-serving politicians using it as a whipping post.
So, back to my original question of what do politicians know about running a hospital? Even less than they know about running government… and we know how great a job they do with that.