Why do hospitals advertise?

October 1, 2006 8:11 PM

What exactly are they selling?

I live in a biggish city in the rust belt. We have two major hospitals in this city. Both of them run constant and extensive advertising campaigns with billboards, full-page newspaper ads, and so on, telling us what great hospitals they are. I don't understand why. I'm 40 and have been through a lot of insurance carriers in my life, and in my experience the choice of hospital comes down to:

1. I'm bleeding a lot; which one is closer?

2. The doctor who participates in my insurance has privileges at this one, so I have to go there.

Do many people really have discretion in choosing what hospital to go to? If not, what is the point of these advertising campaigns? What do the hospitals hope to achieve?

posted by not that girl to society & culture (22 comments total)

You know, for those of us who don't have insurance, so we can choose (and therefore be influenced by advertising) where we want to go. You know, when we're not dying and all.
posted by SinisterPurpose at 8:22 PM on October 1, 2006

Name recognition.

I'm in an area that doesn't have hospital billboards, so I have no idea where the local one is, nor its name; I'd probably end up driving 25 minutes to the one I work at if I wasn't 911 worthy, and if I did get taken to a local one, my partner would probably have to look up how to get there. (I work in New Haven, which has two major hospitals, '5 minutes to drive to the other!' as our esteemed senator said.)

Secondly, some hospitals advertise, say, their $ORGAN services, or their free clinics. When it comes to specialists, people may not know where to start looking, so maybe you start at the place with '#1 Regionally in Heart Recovery per US/News Report' or whatever.
posted by cobaltnine at 8:22 PM on October 1, 2006

I also get the feeling that some of these advertising campaigns are offshoots of grant money for health and wellness programs or building programs that the hospitals receive. This is based just on hearing the radio ads where I live -- where there is really one hospital for about 30 miles in every direction -- and it strikes me that when they get money for building the new birthing wing or whatever it is that they have, part of that money goes towards advertising and promoting that facility. Additionally, when they get money from the American Cancer Society for their wellness program, part of that money goes towards radio ads telling you to eat your leafy greens AND visit Gifford Medical Center, etc.
posted by jessamyn at 8:36 PM on October 1, 2006

I think part of the idea may also be that if you do have a fantastic PPO or if you don't have insurance at all, you will go to the hospital you think is best in X treatment. My dad has cancer, and he drives 90 minutes to University of Chicago for treatment, because they're the best in his cancer - he passes at least six hospitals on his way, one of which is 15 minutes from his home.

Also, many hospitals have doctors buildings/faculty associated with them. I live in Chicago, and I go to Northwestern for all of my medical needs. I have only been in the emergency room there once, and I've never needed surgery. However, I have my gyno, eye doctor, neurologist (I have chronic migraines), and my GP there. There are (clearly) hundreds of doctors I could choose from in Chicago, but I chose Northwestern first and then chose the doctor. Does that make sense? What I'm saying is that I chose the hospital affiliation first and then the physican.
posted by Not in my backyard at 8:38 PM on October 1, 2006

Yes, I think people absolutely have a choice in hospitals. A couple years ago, my mother found out she needed massive open heart surgery. She chose which hospital she wanted to have the operation and recover in. She could have chosen any number of hospitals, including traveling long distances to hospitals in other cities that had good reputations for the kind of surgery she needed. I think you will find many people faced with the decision where to have a major operation can choose to go to hospitals that specialize in that kind of treatment and their insurance carriers will cover it. An operation (or similar procedure) rakes in a lot of money for the hospital, even if the insurance is shelling it out and not the patient.
posted by theantikitty at 8:41 PM on October 1, 2006

People absolutely have choice in hospitals -- especially for profitable pre-planned elective procedures. Having babies, for instance. I see more maternity services offered than anything else.
posted by frogan at 8:56 PM on October 1, 2006

Oh, and even in semi-emergency situations, I've gone out of my way to avoid certain hospitals. Break your arm? Hmm, not that place -- too crowded, too dirty, didn't like it that one time I was there before. I can deal with the pain for the extra 15 minutes it takes to go to the good one.
posted by frogan at 8:58 PM on October 1, 2006

I know many, many women who have chosen where to deliver their babies based on who has the best maternity services. My father travels an hour away for his cardiac services and whenever someone in my family has cancer, there's only one hospital they'll go to.
posted by jrossi4r at 9:39 PM on October 1, 2006

Great question. I've heard these ads myself, but never thought until your question there was anything strange about it.

Could they be advertising directly to consumers to get the consumers to pressure their ins. companies to keep the hospitals on the list of available providers?

Some time ago, my insurer tried to make it harder to go to the best (and most expensive) hospital in the area; they later rescinded that because their customers were mad, and I guess some of the advertising I hear could be aimed at keeping that from happening again.
posted by jamjam at 9:48 PM on October 1, 2006

Competition is fierce among hospitals, particularly in the areas that have a high percentage of profit or that only profit when they're running at optimal capacity.

Cardiac surgeons are ridiculously expensive. If you're not getting your $600,000 a year surgeon working as much as possible, you're losing money. So you advertise about your remarkable cardiac surgeon.

Maternity has a large profit margin – healthy patients willing to pay big and care a whole lot about making the right choice and unless there are complications, it's a fairly easy procedure and you can win people over to your ward with stupid things like a free baby blog or birthing rooms with a view of the swan pond. And you let people know about it with advertising.

Emergency rooms are expensive to operate. Unless you're getting a good capacity of insured patients, it can drain your hospital dry. So you get your name in front of potential patients who have a higher likelihood of having money/insurance.

You trust a name you've seen before, the more you see it, the more you trust it, whether you admit it to yourself or not. It can be the deciding factor between two otherwise equal hospitals. And if you're bleeding and need a hospital right this instance, you go with whatever name comes to the top of your mind, which advertising is remarkably good at creating.

Robotic surgery, laser equipment and other "critical" medical equipment is often sold to the hospital not as necessary for the patients' wellbeing, but as a marketing tool to steal patients from the other hospitals in the area.
posted by Gucky at 10:05 PM on October 1, 2006

As others have said, there's usually more choice than people realize. I have a pretty mediocre PPO, but I can see doctors at almost hospital or clinic in Portland. I'm shut out of a few systems, including some big HMO-only places.
posted by peep at 10:59 PM on October 1, 2006

The Los Angeles County Coroners Office has a marketing department. I often wonder if there is a choice in morgues that requires that LACCO has a marketing department to bring in business.

They do have a really cool store inside, skeletons in the closet, where you can get merchandise. I love wearing my LACCO shirt and cap to Disneyland :)

reg
posted by legotech at 12:11 AM on October 2, 2006

In addition to all the good stuff that is above, keep in mind that the billboards are a good promotional tool to attract community government support for all their good deeds as well as to paint the hospital in a good light to attract future employees.

You see the same thing in places where the local electric company will have big ad campaigns and people have very little real choice.
posted by mmascolino at 5:54 AM on October 2, 2006

I think you need to consider the economics of the situation as well.

First of all, cost: advertising is relatively cheap compared to heart operations. A billboard and radio campaign can easily be paid for with the proceeds from just two or three extra heart operations per year.

Second of all, profit: Insurance companies are able to demand deep discounts on services from medical providers. Hospitals would rather have people who are footing their own bill (or are willing to significantly supplement the "reasonable and customary" costs their insurance covers), as there is a lot of profit to be made off of such people.

Third, volume: The most efficient surgeon in the world is still only going to be able to do about 200 operations per year. The advertising may go out to millions of people, but the hospital doesn't want and couldn't handle that sort of business. They're trying to reach a relatively small, affluent group of people, and convince them that their money is well spent by buying the absolute best in medical care regardless of what their insurance covers.
posted by tkolar at 6:12 AM on October 2, 2006

I'd ask the same thing about airline advertising. Do people actually select one airline over the other? I always figured most people were like me and took whatever flight is cheapest.
posted by DieHipsterDie at 6:29 AM on October 2, 2006

I'd ask the same thing about airline advertising. Do people actually select one airline over the other? I always figured most people were like me and took whatever flight is cheapest.

Really? There is lots that could go into that decision. Frequent Flyer Programs. Total length of travel time. The closeness of which airport to fly in and out of. The necessary ground transportation needed at either end. Arrival and Departure times. General surliness or non-surliness of a particular airline and we haven't even considered business class travel.

I'm all for saving a buck and generally go for the cheapest flight but am willing and do pay slightly more for the things above.
posted by mmascolino at 6:50 AM on October 2, 2006

Hospitals advertise to pull in business, end of story. The real story is that they advertise to show some sort of comparative advantage to another hospital -- if you have cancer, wouldn't you want to go to the hospital that has the cancer research center? Or if you're diabetic and a local doctor is known for excellent treatment, you'd probably want to go there.

DieHipsterDie: It'd be a comparative advantage issue for airlines, as well. I might want the airline with cheap internet access or better movies on international flights, or the one that offers me more frequent flier miles that are going to give me a better long-term bonus than a one-time discount.
posted by mikeh at 6:53 AM on October 2, 2006

Some cities have "medical centers" in the sense that there is a complex of several hospitals that both co-operate and compete located adjacent to each other in a small geographic location. The Texas Medical Center in Houston is a good example, as is the South Texas Medical Center in San Antonio. In cases like this, the hospitals are across the street from each other or around the corner. They may even share a parking garage.
posted by Robert Angelo at 6:53 AM on October 2, 2006

I still think that most people make the decision on what flight to take based on what's cheapest. Things like flight time, transfers and convenience play into it but I wonder if people actually really pay attention to the name of the airline. Or does their travel agent simply find the flight with the parameters they're looking for and who really cares what airline it is.

I'd guess your average flyer takes one, maybe two flights a year and doesn't worry about things like frequent flyer miles or internet access. Airline commercials are probably aimed at the business class.
posted by DieHipsterDie at 7:06 AM on October 2, 2006

I'm interested to hear that people have so much choice about hospitals. I've had two babies in this town, and the hospitals both definitely advertise their birthing centers heavily--but when I was o.b. shopping, every o.b.'s office in town delivered babies at one or the other of the hospitals, not both. So wanting to deliver at a certain hospital meant choosing an o.b., seven months earlier, who delivers at that hospital. And when I had my first son, all the providers who participated in my insurance delivered at one of the hospitals.
posted by not that girl at 7:22 AM on October 2, 2006

For compaison, I live in a Canadian city of 200,000 people with two hospitals, and the next nearest city is about the same size with 3 hospitals and I've never seen advertising for any of them. I have, occasionally, seen advertising for American hospitals near the border that are offering people diagnostic imaging (MRIs etc) and elective surgeries without the waits they may face in the public Canadian system -- for an outrageous price, of course. In my eyes, this supports the theory that it's about increasing profits.
posted by raedyn at 7:30 AM on October 2, 2006

Could they be advertising directly to consumers to get the consumers to pressure their ins. companies to keep the hospitals on the list of available providers?


That is absolutely part of it; of course that goes hand in hand with attracting those patients whose insurance offers them a choice and those who can afford to pay out of pocket for things like elective plastic surgery that aren't covered by insurance.
posted by TedW at 9:32 AM on October 2, 2006