COLUMBIA/HCA PLANS $90 MIL FOR MARKETING IN '97: N.Y. TRIAL REVEALS UNPRECEDENTED SPENDING BY HEALTHCARE GIANT OF ABOUT $200 MIL

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Columbia/HCA Healthcare Corp., the nation's largest for-profit hospital chain, has budgeted $90 million to promote the Columbia brand in 1997. Over the past two years, it allocated nearly $200 million for marketing-believed to be the largest such spending in healthcare-provider history.

The figures are contained in court documents obtained by Modern Healthcare, a sister publication of Advertising Age. Columbia University has filed a trademark infringement suit in U.S. District Court in New York, seeking to bar the hospital chain from using its Columbia brand in the New York metropolitan region. It also asks the court to block the chain's use of the name nationally in ways that will affect the New York region.

The court transcripts show the hospital giant and its local providers spent $106 million last year and $85 million in 1995 on "locally directed" advertising. In August 1996, Columbia/HCA launch-ed a $50 million national branding campaign, from the Martin Agency, Richmond, Va.

Columbia/HCA spent 58% more in 1996 on a per-hospital basis than the average community hospital, according to an analysis by Modern Healthcare. Since 1995, Columbia/HCA has spent about $1 for every $10 spent by all community hospitals.

'THE BIG DOGS'

"That's a big number, and there probably hasn't been spending like that from a healthcare services provider. But let's face it, they're the big dogs in this industry," said Steven R. Steiber, president of Quality Expectations, a healthcare research and consulting company.

Columbia/HCA's blitz has come as community hospitals across the country are slashing ad budgets. Last year, community hospitals spent $966 million on advertising, down 20% from a record $1.2 billion in 1995, according to the 1996 National Hospital Marketers Survey conducted by Quality Expectations, the healthcare unit of Opinion Research Corp.

"There have been years when for-profits don't spend nearly as much as not-for-profits," Mr. Steiber said. "Historically, advertising isn't something for-profits have taken a jab at. They have tried to conserve dollars."

$30 MIL IN MEDIA BUYS

Attorneys have questioned Columbia/HCA executives about the "brand launch campaign" of last August and its costs.

"The total expense is $50 million, but the actual . . . what you call the media buys, I believe, were about $30 million," said Lindy Richardson, senior VP-marketing and public affairs, in her testimony.

Ms. Richardson said the media buys included broadcast and print.

Columbia/HCA paid $5 million last year as a "flat fee" to the Martin Agency for developing the national campaign, agency Chairman-CEO John Adams confirmed in his testimony.

Columbia/HCA acknowledged its TV spending alone last year was "more than $25 million," or "10 times" what it had been in previous years. It ran spots during popular shows such as NBC's "Seinfeld" and "Friends."

NEW SPOTS FOR APRIL

"Any shows that didn't have excessive sex, or, I mean, we set parameters upon which we would allow our commercials to run," Ms. Richardson said.

"We're going to use existing advertising in February, but we're producing new spots for April," said Karen Bowling, senior marketing manager, in testimony.

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