Is Your Mission Best Served by...........?

There seems to be a tremendous buzz and energy growing on this whole "retail thing". I am constantly being sent information on ways that companies are "serving" the hospital community by providing guidance and management programs. Although it becomes very attractive for hospital management to relieve themselves of the headaches related to the day to day operations of such added services and offerings, it comes at a great cost to the bottom line. This "bottom line" has more to do with the benevolence opportunities as opposed to the hard line profits mentality.

What best serves the mission of the non profit health care community is that of retention of margins after the real cost of doing business. The model of what many of these outside companies provide is a good one, the only problem is that most of the actual return does not stay with the hospital. Here is an actual paragraph from one such company's web site. Items in red added by me (couldn't resist)

"Company X" has secured agreements with world-class coffee purveyors to fund and operate (both at a high cost of goods) specialty coffee stores in hospitals. In addition "Company X" is securing agreements with other, healthy branded retail food and beverage companies (that need to make their money first) to further enhance our (should be "your") retail service options. Beyond the enhanced hospital image, the high-quality retail offerings will allow "Company X" to leverage its Room Service offering to hospitals, driving additional retail volume (This may be crossing a fine line of pushing retail into the rooms of patients. Providing an e-commerce destination for the patient to utilize at their leisure and convenience is one thing, using a Room Service person to "leverage" sales is creepy to me. The retail is first and foremost for your staff and visitors, who each have their own unique positive impact on patient care and recovery as a result of having what they need on campus). These retail concepts can be implemented with no cash outlay by the Hospital (Which can still be done if the hospital owns it, they just need good representation). "Company X" will invest in all design, build-out, construction, equipment, and installation needed to open the retail store and will operate the store upon opening, leaving nothing (this may refer more accurately to a fair share of the revenue as much as anything else)for the hospital to do but enjoy the high quality food, beverages, and environment! (this has an image in my mind of when I had to distract my young son with a pretty red balloon as the doctor had to give him a painful shot in the arm, or better yet the Wizard of Oz reference of not looking behind the curtain,just watch the show up front.

Regardless of how many want to package the approach, anything short of the hospital retaining complete ownership, control and most of the benefits of such retail spaces, it cannot be deemed a Maximum Return Initiative. That's my feeling and I'm sticking to it.