Hospital Advertising

When a hospital spends money to promote its new open-heart surgery program, it is most likely competing with other institutions for the same pool of patients. Because the supply of potential consumers of this service is limited, other institutions will be forced to spend more money promoting their own programs simply to maintain the market share they already have.11 As a result, advertising by one institution only increases pressure on advertising budgets across the board—a situation that inevitably leads to higher costs universally.

Advocates of healthcare advertising also argue that it can be good for the community. They argue that advertising may increase revenue for a healthcare institution, thus enabling the institution to more vigorously pursue its mission. Because the demand for legitimate healthcare services remains relatively fixed, however, the only growth healthcare advertising typically creates comes at the expense of a competitor.12 The consequence of this “zero sum game” becomes starkly apparent when one considers that hospitals and medical centers tend to compete only for the most well-insured or affluent patients. There is little healthcare advertising directed at conditions that disproportionately affect the poor or uninsured. Hospitals or medical centers with the best or most aggressive advertising campaigns tend to “cherry-pick” the highest-paying patients, leaving those patients who are less likely to pay concentrated at centers that are unable to compete. This concentration of poorly reimbursed or free care at institutions struggling to maintain financial viability can, over time, lead to lower quality and, if the institutions fail, decreased access for the most vulnerable.

Conclusion

With economic pressures and competition for healthcare expenditures growing, hospitals and individual physicians will continue to look to advertising healthcare services as a means to increase revenue. Yet patients are fundamentally different than other types of consumers. Given the typical patient’s combination of vulnerability and inequity of knowledge, it is clear that healthcare consumers deserve special protection from advertisements that play to emotions or ignorance.

Additionally, because we as a society collectively foot the bill for healthcare costs, we must think about whether we can count on individual hospitals and healthcare providers—with their own narrow financial agendas—to abstain from advertising that unnecessarily promotes increased expenditures and costs.

More studies on the direct costs of healthcare service advertising need to be done, and more light needs to be shed on the effects of the millions of dollars advertisers spend annually. Some advertising of medical services may indeed be necessary, but it cannot be allowed to threaten informed patient decision-making or the economic viability of our healthcare system. TH

Dr. Oxman is a hospitalist, a critical care and infectious diseases fellow in Boston, and a former fellow in medical ethics at Harvard.

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