Should hospitals pay to promote a U.S. News & World Report award?

Six hospital communicators debate the cost of purchasing a licensing agreement from U.S. News & World Report, and how it does—or does not—affect patients.

If your hospital was ranked by U.S. News & World Report for a specialty, congratulations.

This is great news for your hospital and staff. The award recognizes a variety of elements at your hospital, including its reputation, talented staff, expertise, and more.

But not so fast. The small gold badge, emblazoned with “Best Hospitals,” comes at a hefty price. If you want to put that badge on any of your marketing materials, you’ll be asked to sign a yearly licensing agreement. Basically, you have to pay to promote the fact you won.

We talked to six hospital communicators, ranging from academic to children’s hospitals, who decided whether to pay for the licensing agreement—and what that means for each hospital.

Some say touting the recognition by U.S. News is worth it.

Cleveland Clinic has a licensing agreement for digital, print, TV, and radio spots with U.S. News.

“It’s hard for hospitals to differentiate themselves from one another,” says Paul Matsen, chief marketing officer for the Cleveland Clinic. “There’s no perfect method for ranking hospitals, but our independent research shows that U.S. News is the most trusted and reliable source for hospital rankings. It led us to use the badges. In 16 categories—we’re No. 1 in 15 of those categories in Ohio.”

Others believe the award gets lost in the shuffle.

Chicago-based Rush University Medical Center is in a competitive hospital market, but it opted not to buy the licensing agreement. To help patients understand what all the awards mean, it created a microsite, “Quality and You.” On this page of the microsite, Rush lists all the awards it won.

“There are so many hospitals talking about one award or another—consumers don’t understand the difference,” says Lori Allen, associate vice president of marketing and communication. “It seems like everybody is getting an award.”

One thing that everyone agreed on was this: They can’t measure the award’s return on investment. No hospital had any numbers to prove that having a licensing agreement attracted new patients.

“It’s tough to measure a specific tactic, but we don’t like to look at things from one tactic or a campaign, but more like a trend over time,” says Chad Phillips, COO of communications and brand marketing at Orlando Health, which purchased the licensing agreement. “We know that in health care, things move up and down, quarter to quarter.”

The “award culture” in hospitals is prevalent. We know there are lots of other award companies—Vitals, HealthGrades, The Leapfrog Group—that ask hospital communicators to purchase a similar licensing agreement, but because U.S. News been around for more than 20 years, we turned our attention toward them.

Why buying the badge is worth it

Chris Bevolo, author of “Joe Public Doesn’t Care About Your Hospital,” says awards are used and abused in hospital advertising.

“You have to ask yourself how many people in the market are actually looking for care during the time you promote your award,” Bevolo says. “That percentage is so low—no matter what the award, how prestigious—that content is not relevant to the majority of people. Most people only need to go to a hospital a few times in their life. From that standpoint alone, you have to question the effectiveness that awards can sway consumers.”

Not surprising, many don’t share that opinion. Three of the hospitals we contacted had purchased the licensing agreement because, they argue, the U.S. News award is well known among consumers.

Despite being acknowledged by other ranking systems, Orlando Health enters into an award licensing agreement only with U.S. News. The award is promoted in three front-page ad strips in the Orlando Sentinel and on the hospital’s website, and it is frequently found on the background of the hospital’s Twitter and Facebook presences.

“U.S. News is a brand that’s recognized by consumers,” Phillips says. “As patients try to work through the clutter, U.S. News is looked at as an impartial, third-party judgment.”

Children’s Hospital Boston uses the U.S. News signage and logo in elevators, throughout buildings, in advertising campaigns, at conferences, and on its website.

“We hear a lot about how patients make a decision,” says Margaret Coughlin, chief marketing communications officer at Children’s Hospital Boston. “Particularly if you have to travel for your medical care, it’s a big decision. You could read up to eight to 10 sources to get information. U.S. News is almost like an assurance—a guarantee for patients.”

Bevolo describes marketing the awards as a “knee-jerk marketing tactic for marketing and health care.” He doesn’t think patients give much thought to awards, especially because the market is saturated with them. Five years ago, U.S. News hired a third-party vendor to license the awards; he says that’s when it lost its distinction in the marketplace.

“U.S. News used to have more cachet when they didn’t charge hospitals to use the awards—it was about a ranking from a news standpoint,” Bevolo says. “Now it’s more of a business model.”

How Mayo Clinic handles it

Many hospitals look up to Mayo Clinic as a leader in the health care industry.

Mayo Clinic does not purchase the licensing agreement with U.S. News or any other company. However, like the other hospitals we contacted, Mayo Clinic promotes the award internally and to its social media audience. It sends out tweets and Facebook posts about the award. It also has information about the award on its hospital intranet, in newsletters, and in press releases. As long as a hospital doesn’t use “the badge,” this is a cost-free method of promoting it because the rankings are in the public domain.

“We want our staff to know how Mayo Clinic looks,” says Paula Santrach, associate dean of value creation at Mayo Clinic. “Basically, we acknowledge that we have received awards, but we don’t go any further than that.”

Santrach says that because there are a lot of ranking systems with different methodologies, Mayo Clinic does not endorse any particular one.

However, Mayo Clinic is running an ad campaign on the U.S. News website. If you click on any hospital that’s ranked—whether it’s a pediatric hospital or an adult hospital—you’ll see a Mayo Clinic ad on the right-hand side of the page and top of the page, directing you to join Mayo Clinic.

Mayo Clinic didn’t outline its specific marketing strategy or budget for this campaign, but told us via email, “In general, we try to reach patients in places where they look for information,” said Nick Hanson, who’s in the public affairs department. Hanson did not tell us how many people have clicked on the ad and did not comment about whether buying ad space was more effective than buying the badge.

How much does the ‘badge’ cost? It depends

The question of proving the “badge’s” ROI is something no one could answer. Some, like Rush University Medical Center, say it’s just not worth the money.

Rush’s Allen says “buying the badge” wasn’t an effective way to spend the hospital’s advertising dollars. She estimates that the cost of the badge is the same as a few print ads in the Chicago Tribune or several television spots, which she says would garner more media impressions.

Nick Ladermarco, director of sales for Wright’s Media—in charge of licensing the awards for U.S. News—did not divulge any information about the pricing. There’s no listing of fees on the U.S. News website.

Based on our interviews, the prices seem to vary according to such factors as how many awards the hospital has won, the number of hospitals in your system, and which licensing package a hospital buys.

Boston Children’s Hospital paid $40,000 for its licensing agreement. University of Utah Health Care, which did not purchase a licensing agreement, was asked to pay somewhere around $30,000.

However, one hospital communicator, who wished to remain anonymous, said its hospital paid $230,000 for the ability to promote the U.S. News badge for five of its hospitals.

“The way they [Wright’s Media] positioned the pricing is that it’s based on the number of awards you won and the number of hospitals in your system,” the source says. “They originally came back to us with a price higher than $230,000, but we said it was too high. Then, they came to us with the $230,000 price. To me, it says the prices are arbitrary. They are probably wheeling and dealing—trying to figure out how much they can get.”

Do patients understand that hospitals have to “buy the badge”?

Allen doesn’t think so.

“If they did know, they’d be even more confused,” Allen says, with a laugh. “It’s not like hospitals are paying to be ranked, but it might make people think that—if they don’t listen carefully enough to know what the fee is really for.”

Coughlin says she doesn’t believe consumers would think differently if they knew Children’s Hospital Boston had paid for the U.S. News signage and logos.

“We don’t pay to be part of it; we don’t have to pay to fill it out,” Coughlin says. “Most awards—like J.D. Powers or the Good Housekeeping Seal—you have to pay for that. It’s a very common practice.”

Readers, do you purchase any licensing agreements to promote your awards? Why or why not? Tell us what you think.

How U.S. News works with a third-party vendor

For five years, Wright’s Media has been in charge of licensing the awards on behalf of U.S. News. Wright’s Media does not receive any information from U.S. News about the winners until after the rankings have been established. At that point, Wright’s Media contacts hospital PR and marketing departments. Sometimes, perennial winners will come to Wright’s Media directly. No hospital has to pay a fee to be considered for a ranking.

According to the U.S. News website, researchers surveyed about 10,000 specialists and sifted through data on about 5,000 hospitals. There are 100 winners in each of 16 categories that a hospital can be ranked in, such as cancer treatment, rehabilitation, and psychiatry. The badge does not specify a hospital’s ranking; the No. 100 hospital in orthopedics has the same badge as the No. 1 hospital in orthopedics. A consumer couldn’t tell the difference simply by looking at the badge.

A detailed review about how hospitals were ranked can be found here.

Wright’s Media says a “high percentage” of the recognized hospitals buy a licensing agreement, but it wouldn’t offer specifics.

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