Blog Post

Hospitals, take heed: It’s getting harder to justify concierge services for top donors

By Nick Cericola

April 29, 2021

    Covid-19 shined a light on long-standing inequities in health care among different racial and socioeconomic groups—and hospitals are taking note. Many are staking bold new ambitions related to health equity for their communities, a movement my Advisory Board colleagues have written extensively about. I believe these early statements of intent could presage a period of vigorous change. But to truly make good on their promises, hospitals may need to challenge their assumptions about how they serve their wealthiest patients, not just their most disadvantaged. That’s particularly true in light of reports early this year that a few health care organizations offered their top donors preferential access to Covid-19 vaccines.

    The economics behind donor benefits

    Many hospitals raise money through donations. In fact, the median not-for-profit health system raises just shy of $15 million a year through private philanthropy, an amount equivalent to the net income earned on roughly $600 million in patient services. Hospitals use donations to purchase new clinical technologies, improve facilities, and create community health programs that may otherwise have little chance of seeing the light of day. To raise their $15 million, many health systems rely in part on support from a small number of wealthy patients-turned-donors.

    Some hospitals provide those donors with access to VIP touches while receiving care, including nicer rooms, special amenities, and concierge services. Why? Because there are strong economic incentives for doing so. According to Advisory Board survey data, patients and family members who make financial donations following treatment identify the quality of their services (78%), not the outcome of their care (55%), as the most significant reason for donating. In the same survey, patients and family members who received one or more non-clinical “add-ons” during treatment (like help with their billing paperwork or free parking) were four times more likely to want to donate after the fact compared to those who received no such add-ons. Put simply, patients generally expect medical professionals to provide high-quality treatment, but they don’t necessarily expect the same level of service. Providing a better consumer experience can translate into financial benefits for the hospital.

    An ethical dilemma

    Bioethicists and other members of the medical community occasionally register concern that “medical concierge programs” are enabling a two-tiered health system. But the full picture is more complicated. The funds hospitals raise from a small number of donors, achieved at times through the promise of improved amenities, cross-subsidize programs that improve the care available to other patients, regardless of their ability to donate.

    Is it a justifiable trade-off to boost the experience of a select few if it broadens opportunities for many others to access quality care? Maybe—but the current social environment is wary of organizations trying to maintain such a delicate balance.

    My advice to leaders

    At a minimum, hospitals providing such benefits to their donors should routinely measure the financial return on investment for the organization’s community health mission. If top-tier service for some patients does not meaningfully cross-subsidize broader investments in better care for all, then it’s hard to justify the services.

    But if service enhancements for high-potential donors do help fund other programs, hospitals must ensure that medical concierge programs adhere to inviolable ethical rules. Hospitals should conduct an audit of donor benefits—and how they’re administered—to ensure that they don’t lead to better care or better access to care. Simply offering improved amenities and concierge service is unlikely to create or widen disparities in outcomes. But the line is thin, and it needs to be carefully identified and guarded. If donors are given preferential access to life-saving treatments, such as a Covid-19 vaccine, philanthropy ceases to be in service to improving community health. A broad set of stakeholders, including clinicians and fundraising professionals, should be involved in proactively codifying what services are allowable, heading off the possibility of errors in judgment.

    Hospital leaders—in partnership with their development teams—are best positioned to decide whether medical concierge programs are aligned with their equity goals. Despite the financial benefits of these programs, some organizations may simply determine that it is no longer tenable to pursue health equity while simultaneously offering perks—cosmetic as they may be—to their most generous benefactors.

    Philanthropy, by definition, is meant to improve the human condition. And medical concierge services have historically been a way to promote philanthropy. However, with today’s focus on reducing disparities in health care access and outcomes, hospital leaders will find that the bar for justifying exclusive benefits for donors has never been higher.

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