 In a past Health Politics program (The Red
Cross: Then and Now) I recounted the history of this revered
organization, as well as its trials and tribulations. Among these have been
chronic quality management problems with its blood business, chronic governance
turmoil, high senior leadership turnover, and criticism of its management of
disasters and application of funds raised on the back-end of disasters. Over the
past week, there has been more of the same and something new. First, the same:
Today a report that the Red Cross is taking heat for problems in
distributing a $39 million relief-fund to victims of Katrina. The Red Cross
actually raised $2.1 billion on the back of Hurricane Katrina, with $1.9 billion
reported distributed immediately in the aftermath of the storm. That left $175
million allocated to a variety of outlays, including the fund in question, new
case workers, some mental health services, and two other programs "in
development."
As for the $39 million fund, the complaintants say the existence of the fund
was not advertised, the original application form for relief was 20 pages long (
it's now 8 pages), only $12 million has been distributed in the last 12 months
with an average payout of $8,700 and a processing time of 46 days. As for the
new issue, a little history I was unaware of: The owner
of the Red Cross brand insignia is none other than J&J, which originated
it way back in 1887. In 1995 the company agreed to allow Clara Barton's American
Red Cross organization the right to use the insignia as part of its voluntary
efforts consistent with a special Congressional Charter awarded in 1900. So what
caused J&J to take The Red Cross to court? Well, it seems that the Red Cross
decided to use the insignia for income generation (remember the stir over the
AMA and Sunbeam.
Well, the Red Cross was generating about $10 million a year allowing the
insignia to be used by way of endorsement on products like humidifiers,
examination gloves, nail clippers, combs and toothbrushes. Red Cross President
Mark Everson says, "The Red Cross products that J&J wants to take away from
consumers and have destroyed are those that help Americans get prepared for
life's emergencies….People will buy disaster kits, sometimes on an impulse
basis. That American Red Cross image on the there gives them confidence that
there are the right things in the kit. We think they're all done with that
preparedness theme."
Really? Humidifiers for preparedness. I guess I just don't get it. My advice
to the Red Cross: focus on streamlining governance, management, consistent
processes, direct disaster management, and financial transparency; move gently
away from blood management (high liability); and say thanks to J&J (they've
let you use their brand for more than a century and also have given you $5
million over the past 3 years). |
