PacifiCare Seeks to Broaden Image with $20M Ad Campaign
Sicor Buys Back Preferred Stock, Cuts $4.3 Million in Yearly Dividend Payouts
HEALTHCARE by Vita Reed
Warm, fuzzy imagery and a “we care” message often are played up in healthcare advertising campaigns. Santa Ana-based PacifiCare Health Systems Inc. hopes to give those seeking a new health plan a different image this spring.
Much healthcare service advertising features “warm, smiling happy people,” according to James Frey, PacifiCare’s senior vice president for branding and strategic initiatives.
“The category of health insurance (advertising) is very generic,” Frey said. “Consumers are smarter. That’s not enough.”
PacifiCare is looking to W.B. Doner & Co.’s Newport Beach office to provide an image that Frey calls “a little more straightforward.”
PacifiCare recently tapped Doner for its $20 million advertising and marketing campaign, which is scheduled to start around April. Doner, which also has an office in Detroit, is known for its “zoom zoom” spots for Irvine-based Mazda North American Operations.
“In this campaign, we’ll be telling consumers about the quality of the doctors who participate in PacifiCare and Secure Horizons health plans, and how we’re building on our proven track record of customer satisfaction to meet the consumer’s changing and expanding healthcare needs,” said Howard Phanstiel, PacifiCare’s chief executive, at the time the campaign was detailed in early January.
People want healthcare service plans to prove their effectiveness, Frey contends.
One thing Doner is expected to do, according to Frey, is position PacifiCare as a company with a broad image.
“We feel it’s very important to position (ourselves) as more than a HMO,” he said.
The goal is to show PacifiCare as a full-line organization that provides various health services, Frey said. In recent months, PacifiCare has introduced preferred provider and Medicare supplemental insurance programs in a bid to diversify its business.
While PacifiCare is looking for a straight-forward message, Frey was careful to say that the healthcare company didn’t want to possibly alienate current and potential members.
“This business is very important and serious,it’s hard to get too edgy without turning off people,” he said.
PacifiCare selected seven agencies from a list of 20 compiled by Select Resources International, a West Hollywood-based advertising consulting firm. Doner beat out Young & Rubicam Inc.’s Irvine office and Grey Worldwide in Los Angeles for the PacifiCare campaign, according to Advertising Age.
Frey said that not selecting an agency known for healthcare work was “somewhat of a positive” because there would be no preconceived notions about what a health campaign would be.
One of the longtime arguments made by HMO critics has been excessive spending on advertising. Frey, however, pointed out that the $20 million earmarked for PacifiCare’s campaign “represents two-tenth of 1% of our revenue. It’s a tiny portion of our $12 billion. We will be outspent.”
No internal positions will be added because of the advertising campaign, Frey said.
“Doner knew they would be doing the majority of the work,” he said.
PacifiCare’s advertising campaign will encompass television, print, radio, billboards and the Internet, though Frey said he didn’t have an exact distribution breakdown.
In other PacifiCare news, Phanstiel made a presentation earlier this month at the J.P. Morgan Chase & Co. healthcare conference in San Francisco. Phanstiel’s appearance came a week after PacifiCare announced its “profit improvement plan,” including the hiring of Doner.
Sicor Buys Stock
Irvine drug maker Sicor Inc. last week bought back 70% of its outstanding $3.75 convertible preferred stock from two major shareholders, in exchange for a combination of some 1.1 million shares of Sicor common stock and more than $39 million in cash.
The purchase eliminates nearly $4.3 million in annual dividend payments, the company said, and leaves some 450,000 shares of the company’s convertible preferred stock outstanding.
Marvin Samson, Sicor’s chief executive, called the move a good one for shareholders.
“Our business remains very strong, our financial position is secure and we remain focused on our strategic objectives,” he said. “The repurchase of a major portion of our preferred stock is just one more example of our commitment in managing our business in a responsible manner to ensure that we provide value to our stockholders.”
Bits and Pieces:
St. Joseph Hospital-Orange and Main Place/Santa Ana have deployed three automated external defibrillators at the shopping mall to treat victims of sudden cardiac arrest. The machines are made by Philips Medical Systems Aravinda Chakravarti, director of the Johns Hopkins School of Medicine’s McKusick-Nathans Institute for Genetic Medicine, is set to speak Tuesday at the University of California, Irvine’s Crystal Cove Auditorium. Chakravarti is discussing the future of gene therapy and treatment of diseases such as hypertension, schizophrenia and diabetes LifeScript, Orange, said it signed a contract to provide nutritional supplement products to US Wellness Inc., Gaithersburg, Md. Kaiser Permanente officially opened a new medical building at 3401 S. Harbor Blvd., Santa Ana.
