When the Ebola crisis rocked Texas Health Presbyterian Hospital Dallas, the new head of its corporate parent maintained a low profile, making few public comments and steering clear of the glare of TV lights.
Then Barclay Berdan, who had taken over as CEO just weeks before, on Sept. 1, issued a public apology in full-page ads in the Fort Worth Star-Telegram and the Dallas Morning News on Sunday. Otherwise, he has dodged the media.
For decades, Berdan has been known as an accessible, well-liked hospital administrator in Fort Worth, where he opened Harris Methodist Hospital Southwest in 1986 and later spent 14 years at Harris’ main downtown complex, rising from chief operating officer to president.
In 1997, Harris merged with Presbyterian, another faith-based nonprofit operation, creating Arlington-based Texas Health Resources. Harris Methodist remains its biggest hospital, providing 19 percent of the system’s revenues, while Presbyterian in Dallas is the second-biggest, contributing 17 percent, according to THR’s financial filings.
Before September, the 25-hospital group had been riding high both in terms of reputation and performance. It reported 2013 revenues of $3.85 billion, resulting in an 8.3 percent operating margin — considered highly enviable in the nonprofit hospital world — up from 7.2 percent the year before, filings showed. (By comparison, Dallas-based Baylor Health Care System, now Baylor Scott & White, reported 2013 revenues of $4.1 billion with a 7.1 percent operating margin, up from 6.9 percent. A survey by Modern Healthcare magazine found the average operating margin of 200 hospitals in 2013 was 3.1 percent.)
“We will become the benchmark of quality, safety and customer experience that other health systems around the country want to emulate,” Berdan proclaimed in July when he was selected to succeed retiring CEO Doug Hawthorne, who had run THR since the merger.
Anne T. Bass, a member of the Fort Worth family of billionaire philanthropists who headed the search committee as THR’s board chairman, called Berdan “a forward-thinking visionary with a personally engaging leadership style.”
Then Thomas Eric Duncan came to Presbyterian’s emergency department, throwing Texas Health into an unflattering spotlight.
Numerous healthcare and crisis PR experts predict that the hospital chain will survive the self-acknowledged lapses arising from the treatment and death of the uninsured, 42-year-old visitor from Liberia who was sent home with inappropriate medicine after saying he had been in Africa and after his temperature had spiked at 103.
Duncan would return in an ambulance two days later and die a few days after being admitted. Two nurses who treated him during his stay at the hospital would contract the virus and are being treated at hospitals in Bethesda, Md., and Atlanta.
Managing the fallout
Analysts are still trying to assess the damage from Presbyterian’s errors in sending Duncan back into the community and improperly protecting its staff. What’s clear is that the public fallout has been pronounced.
“If I had an accident at the intersection in front of Presbyterian, I would ask to be taken to Denton,” said Andrew Reyes, a Coppell resident who works in Irving as a physical trainer.
Ann Alexander of Dallas has been going to Presbyterian since it opened in 1963, and gave birth there. She was back on Monday for a follow-up visit with her doctor, returning without qualms. “I think they made mistakes but they’re putting them behind them,” she said.
But asked if she would be treated by its emergency department, Alexander said she’d have to think about it.
“It definitely has had an impact. There have been a significant number of cancellations,” said Dr. Jay Staub, an OB/GYN specialist who practices at Presbyterian’s Margot Perot Building some distance from the emergency department.
“Many people are calling for advice and we’re trying to talk them off the ledge.”
Staub tells patients that the Ebola cases were isolated, “that you can’t get Ebola if it’s not in the neighborhood.”
The father of one patient scheduled for a Caeserean section delivery offered to pay all costs if his daughter went to any other hospital, but she decided to stay at Presbyterian, Staub said. Another patient told a member of his practice that she was ordered by her employer not to return to work if she kept an office visit at Presbyterian.
“It’s panic, unsubstantiated by science, just irrational panic,” the physician said. He insists that 90 percent of U.S. hospitals would have performed the same as Presbyterian: “Very few have had training; I know this for a fact. It’s a shame that Presby became Ground Zero, and everyone is going to learn from what happened here.”
Staub blames Texas Health Resources for much of the damage to the hospital’s reputation.
“The hospital has done a pretty terrible job from a damage control, PR point of view,” Staub said.
‘A textbook example’
Even after it brought in crisis PR consultants from a national firm, Burson-Marsteller, the hospital group has kept the media at arm’s distance, answering few direct questions while promoting a self-congratulatory Twitter campaign called “#PresbyProud.
Dr. Daniel Varga, THR’s chief clinical officer and senior executive vice president, has done selected interviews in the past week after apologizing during testimony before a Congressional panel. And on Monday, in an example of the curious PR offensive, three nurses read public statements of support for THR but did not take questions.
Amiso George, who teaches strategic communications at Texas Christian University, wondered whether a “siege mentality” embraced THR as it grappled with a crisis bigger than anything it had ever dealt with. That said, “the apology should have come quickly. It goes a long way to assuage, in this case, feelings by the Duncan family and their supporters that Duncan was treated differently. Perception is reality.”
“This was a textbook example of how not to handle crisis communications, and I’m sure PR classes will be studying this for years,” said Gail Cooksey, a Las Colinas-based PR consultant who has worked with North Texas companies for decades.
Cooksey rattled off THR’s missteps: “They did not have consistent messaging. They had no central spokesperson. They kept changing their story, which sounded like they were covering up. They didn’t talk to the media directly but instead relied on issuing statements. And they did not issue an apology until … almost three weeks later.
“I do believe the [Dallas] mayor and county judge did a good job of handling things, but the hospital should have been center stage and they weren’t. In fact, I don’t think I’ve seen the president or CEO of the hospital in any of the coverage. Every day went from bad to worse.”
Even more silent was Emergency Medicine Consultants, the Fort Worth-based firm that contracts to provide emergency room physicians at Presbyterian, Harris Methodist and numerous other facilities in the group. Although Berdan’s apology said Presbyterian’s emergency department did not correctly diagnose Duncan’s symptoms, EMC has issued no public statement. A call from the Star-Telegram was not returned.
The financial impact
Also worrisome is the impact the Ebola cases may have on THR’s creditworthiness.
On Friday, Moody’s Investors Service revised its outlook on the group, which has $1.1 billion of debt, from positive to “developing,” noting a high degree of uncertainty about its financial performance in the Ebola crisis.
Over the next few months, “the Ebola event could result in short- or long-term harm to the hospital’s finances and reputation,” Moody’s analyst Lisa Goldstein said in an email. “While the overall THR system is fiscally sound and can absorb a short-term negative financial impact, the uncertainty and developing outlook will depend on any long-term impact or additional Ebola-related developments.”
In August, Moody’s had just upgraded THR from “stable” to “positive.” The hospital group’s Aa3 rating, Moody’s fourth-highest level, reflected its leading market position in a highly competitive, 16-county service area of about 6.8 million people. Commenting before the Ebola crisis, Moody’s said the “strong and innovative” THR leadership has implemented strategies focused on growth, quality and efficiencies, and demonstrated an ability to generate strong operating margin of 8.3 percent and operating cash flow margin of 14.7 percent.
THR has spent millions on advertising, promotions and signage linking its hospitals under the Texas Health brand, including some ads using voice-overs by Hollywood star John Cusack. The question now is whether the lavish co-branding effort will hurt other units not involved in the Ebola mess — such as Fort Worth’s Texas Health Harris Methodist.
“It can’t help but have some spill [over],” said Paige Hendricks, a Fort Worth PR consultant. “THR has worked so hard over the years to consolidate the brand for Texas Health, it may be hard to extricate one from another and/or differentiate now, though many still refer to the individual hospital by their original names (Harris, Presby etc.).”
Others were not so sure. A professor who teaches in a hospital MBA program in the region, who was forbidden by his university to speak publicly about THR, discounted any ripple effect.
“I don’t think many people even know Presby is in same hospital system as the one they go to,” he said. Although the professor said he heard the number of surgeries at Presbyterian had dropped precipitously, he predicted that the downturn would end up as only a “blip” in a month from now — “unless the crisis keeps going.”
Another PR consultant, Lake Forest, Ill.-based Lynda O’Connor, insists that Texas Health Presbyterian “has been damaged beyond repair.” Her solution? “The hospital should be sold, renamed, updated, and staffed with experts who will train everyone who works there.”
‘We can control it’
Texas Health Resources has declined to say how hospital admissions have been affected by the crisis, to answer a number of other questions or to make Berdan available for an interview.
Berdan, a TCU graduate who got an MBA from the University of Chicago, was recruited by Harris Methodist’s then chief, Ron Smith, to become vice president for administration at its new hospital in southwest Fort Worth. Four years later, he was was transferred to the downtown campus of Harris Methodist, where the Klabzuba Cancer Center, the Bloxom Critical Care Tower and the heart center were completed during his tenure.
“He absolutely exudes a quiet confidence,” said Mary Kathryn Anderson, a board member of Fort Worth South when Berdan served as president of the nonprofit development group. “On a Sister Cities trip to Budapest in 1996, he very calmly and magically managed a group of 150.”
Seeing Berdan’s apology in the Star-Telegram, Anderson said, “felt like a sense of relief that Barclay was taking charge. I don’t think it came too late.”
But until his public apology, Berdan wasn’t seen or heard during the Ebola crisis.
“He should have been out there,” said Cooksey, the Las Colinas PR consultant. “The CEO should be addressing the public. Instead they had Varga. They apparently thought they could contain it, or, ‘We can control it,’ but that never happens. They had every opportunity to do something right, and they kept issuing statements instead of coming out to answer questions.”
And an apology is not enough, said Scott Sobel, a crisis PR consultant in Washington.
“Apologies and firing administrative staff are warranted and even expected by the public,” Sobel said. “But in this day of sometimes shallow corporate and political apologies, the person or institution needs to show concrete change that leads to tangible improvements or the public will not be convinced the apologetic action is sincere and meaningful.
“The hospital needs a long-term vision of winning back trust.”