Partnering With Hospitals

May 20, 2021, Department, by John L. Crompton, Ph.D.

2021 June Finance Partnering With Hospitals 410x410

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A primary reason parks were first embraced in the mid-1800s as a standard feature of tax-supported urban infrastructure was their perceived contribution to reducing the impact of disease and epidemics on city populations. They were considered to be oases of clean air that offered protection against miasmas, or “bad air,” which were believed by the medical profession at that time to be the source of all illnesses.

In contemporary times, positioning public parks and recreation as vehicles for enhancing public health remains an important justification for the field’s tax support. NRPA recognizes this by designating health as one of the Three Pillars that guide the organization’s mission.

The health positioning of the park and recreation field aligns with the changing mission of hospitals. In the past two decades, their mission has expanded to incorporate wellness and prevention, rather than being confined to treating sickness and traumas. The alignment has resulted in hospitals contributing funds for capital improvements and/or annual operating costs for recreation centers.

Glenview Park District and Glenview Hospital

Typically, a department sends out a Request for Interest (RFI) to all hospital providers in the area, followed by a Request for Proposals (RFP) that’s sent to those who responded affirmatively. The partnership between Glenview Park District, Illinois, and Glenview Hospital operated by Evanston Northwestern Healthcare Corporation (ENH) was a pioneering venture and remains illustrative of how such partnerships may be nurtured.

It was initiated when Glenview Park District built its 164,000-square-foot recreation center. ENH leased 10,088 square feet for use as a health and wellness center. The lease fee was $17,500 a month to cover ENH’s share of the design and capital cost, and $3,700 a month to pay its proportionate share of the costs of maintaining and operating common spaces. The initial agreement was for 10 years, by which time the capital commitment would be fulfilled. ENH had four five-year options to renew the lease on specified terms.

The hospital provided assessments and rehabilitation treatments for park district clientele. In return, hospital patients gained priority access to other parts of the facility, such as the therapeutic and whirlpools, fitness equipment, swimming pool, running track and gymnasia. Thus, for example, ENH and its patients had priority use of the therapy pool from 7 a.m. to 5 p.m., Monday through Friday. Their annual maintenance payments covered a proportionate share of the Common Access Maintenance (CAM) costs (restrooms, storage areas, locker rooms, entrance and exit lobbies, hallways, parking spaces, and utilities for their space).

The benefits to the hospital were the prominence and location of the recreation site, access to a built-in customer base, co-branding of the center with the recreation agency, and joint marketing. The joint marketing and branding required that ENH be identified as the exclusive health and wellness provider for the Glenview Park District on all signage, marketing and advertising materials. It also included a commitment from the Park District to include on the applications for recreation center membership a separate section, describing the programs and services ENH was providing. If members were interested, they checked a box to receive further information from ENH.

Other Partnership Examples

Hospital partnerships with school districts similarly demonstrate the potential of these types of arrangements with public fitness facilities. In Mason, Ohio, Atrium Medical Center built a two-story health and wellness center adjacent to the district’s stadium, and a 10,000-square-foot weight room on the high school campus. The facility belonged to the school district, but it leased the second floor and gave naming rights to the medical center, whose contribution financed most of the cost of the center. The medical center offered sports medicine, physical therapy and family medicine services on the second floor.

The town of Brownsburg, a suburb of Indianapolis, planned a new 80,000-square-foot community recreation center costing between $20 million and $25 million. It sent out a request for proposals (RFP) to interested parties requesting proposals from “Capital Contribution Partners” for (i) naming rights of the center and (ii) leasing rights to operate a health and wellness facility in the center.

This RFP specified similar terms to those used at Glenview: A 10,000-square-foot facility; a minimum 10-year commitment with possible renewal options; “a minimum of one staff member who is a physician (or equivalent), along with an agreed number of staff… who would assume the management responsibilities for all health-related activities.”

At a basic level, a partnership may be limited to sponsorship of a center. An early arrangement of this type was in Scottsdale, Arizona. In return for a commitment of $150,000, which the city needed to pay for equipment in the 4,000-square-foot fitness center component of a recreation center, Scottsdale Healthcare received the right to hold medical wellness programs — such as health risk assessments and health education seminars in the fitness center and the right to name that component of the center, “The Scottsdale Healthcare Fitness Center at McDowell Mountain Ranch Park and Aquatic Center.”

More recently, The Epic at Grand Prairie, Texas, one of the finest public recreation complexes in the United States, signed a five-year sponsorship agreement with Texas Health Arlington Memorial Hospital (THAM). The Epic integrates a number of private-sector commercial revenue flows into the city’s $140 million investment in recreation facilities on the site to ensure it is operationally self-supporting and requires no subsidy from the city’s general fund.

The sponsorship is one of the complex’s revenue flows. In return for an annual payment of $30,000, THAM receives multiple recognitions relating to external signage at the complex; social media recognitions and access; recognition on the home page of The Epic’s website; ads in its print publications; and broadcast visibility on The Epic’s radio internet station.

Thank you to Leon Younger, CEO of PROS Consulting, for contributing to this month’s column. His company has been involved in facilitating a number of contemporary partnerships between recreation agencies and hospital providers.

John L. Crompton, Ph.D., is a University Distinguished Professor, Regents Professor and Presidential Professor for Teaching Excellence in the Department of Recreation, Park and Tourism Sciences at Texas A&M University and an elected Councilmember for the City of College Station.