Catholic Health Initiatives: Marketing, Finance, and Strategy

Introduction

Catholic Health Initiatives (CHI) is a non-profit organization consisting of four separate national Catholic health systems that were combined under CHI over the past three decades. CHI offers assisted living services, nursing home services, memory care, rehabilitation care, hospital care, adult day care services, and many other health care services around the nation. It has recently merged with Dignity Health, becoming one of the largest health services conglomerates in the United States. This paper discusses the marketing strategies employed by CHI, its financial situation, its partnerships, and its strategic planning.

Marketing Strategies

The marketing strategies used by CHI include television, digital marketing with content and social media, print ads, and outdoor advertising to help make CHI more recognizable among the different communities throughout the states in which it operates (CHI, 2018). As Doster (2013) and Jackson (2011) show, social media is one of the most popular forms of communication used among people today. CHI uses a variety of social marketing techniques, from social media publishing to outdoor advertising. Representatives also play a large role in promoting the company's services to potential clients who may be interested.

The company's high degree of social marketing allows it to be visible and well-known across different regions and formats. Marketing encompasses all aspects of a business — from how products or services are priced and offered, where they are offered, who the people are providing the product or service, how the product is promoted, to how services are distributed — making marketing essential to the overall performance of the company. Today, social media plays a tremendous role in social marketing, but CHI does not rely solely on social media. It maintains a strong Internet presence, including a blog entitled Imagine Better, where a variety of articles, colorful pictures, and videos showcasing the quality of care provided by CHI can be found. Packaging and positioning are two ways in which effective marketing can be accomplished (Ampuero & Vila, 2006), and CHI excels at both through its Internet presence, offering a clean, crisp website with easy access to the types of information clients are likely to seek. These elements reflect the 7 P's of marketing philosophy: product, price, place, people, promotion, packaging, and positioning — each representing an aspect of what it means to market a business (Ivy, 2008).

The company's Internet presence is quite large, as it operates numerous websites, blogs, and social media platforms. Its many different Internet channels bring casual browsers to its webpages, while its websites offer detailed information along with contact numbers where people can obtain additional data directly from someone associated with the company. The websites provide information about the company's history, focus, purpose, aims, values, and mission. All of this information is published online, making the Internet one of the best channels through which this company markets itself to the public. As the Internet is one of the primary means of sharing information in today's digital world, and as society has entered the era of "Digital Natives" — a point in time in which those born after 1981 have grown up with digital technology (Prensky, 2001) — it makes sense that the Internet represents the company's strong suit. Maintaining so many professional-looking sites does require considerable investment, but the purpose is to remain visible in the virtual space, where so many people now turn for information.

All of CHI's financial information can be found in its most recent annual report from 2018. CHI has seen its revenue grow from admissions thanks to reductions in labor costs and through a restructuring of the organization, which became necessary because of the merger with Dignity Health (Annual Report, 2018). However, the company does carry considerable losses year over year, with operating EBIDA and operating losses totaling $477.6 million and $442.9 million respectively (Annual Report, 2018). The company attributes these losses to declines in volume, which it notes are part of an industry-wide trend. Compared to losses sustained in 2017, however, the company has cut losses significantly.

Financial Information

The company is also divesting some of its assets, such as the Medicare Advantage health insurance operation it previously ran in Washington, and it intends to sell QualChoice in Arkansas (Annual Report, 2018). CHI is reinvesting in itself by restructuring through its merger with Dignity Health, streamlining its services, and emphasizing regional development in Colorado, the Pacific Northwest, Kentucky, Nebraska, Texas, Iowa, and Ohio. It maintains strong geographic diversification; operating revenue is also well diversified, as no single region of its business provides more than 18.4% of total revenue (Annual Report, 2018).

Because the company reports losses, the strategies it is incorporating to cope with them include continuing its trajectory of cutting labor costs, restructuring, divesting assets that fall outside its core business model, and focusing on developing its regional operations to bring volume back to a level where profitability becomes achievable. The company cites continued improvement in Texas and Kentucky, and identifies investment in information technology to update infrastructure as well as reductions in claims expenses as signs of continued progress (Annual Report, 2018).

CHI is essentially a health care organization built on partnerships. It is currently looking at entering into an agreement with Premier Health Partners in Ohio, "which operates several hospitals as well as certain ambulatory/ancillary service centers, joint ventures and other services in the greater Dayton area" (Annual Report, 2018, p. 4). As a diversified health care provider, one of its notable service lines is CHI Health at Home, operating in eight different states, with more than 3,300 associates, $285 million in revenue, and 1.5 million patient encounters each year (Annual Report, 2018). CHI Health at Home provides services throughout the entire CHI network and also to ten different partners outside the network. Partnerships are therefore extremely important to the organization.