In Defense of Hospital Ad Spending

Marianne Aiello, for HealthLeaders Media , December 19, 2012

The business case
The hospital advertising critics always seem to forget about the business side. Aside from staying true to their mission, hospitals need to advertise to maintain or enhance revenue flow. Even non-profit hospitals need to market to insured patients and promote high-grossing service lines so that they are able to continue to care for the uninsured.

And while some larger health systems spend what seems like large amounts of money on advertising, on average, the hospital marketing budget accounts for a tiny portion of the overall organizational budget.

"While we do spend money on marketing and advertising, far less than a penny of every dollar of our expenses goes to that and we try to be prudent in those expenses," Bob Porter, chief strategy officer for the non-profit SSM Healthcare-St. Louis said. "For us, healthcare is a social good, not a commodity."

Listening to the critics
Another hospital advertising criticism that came out this month was written by a healthcare insider, Upstate University Hospital CEO, John McCabe. On his blog he lists services that far-away hospitals are promoting in his market and implies that this is unethical because his hospital provides the same services, with the same high-quality care closer to home. While this is self-serving, (hey, it's his blog) he goes on to make a few thought-provoking points.

McCabe posits that the current hospital advertising environment doesn't jibe with the healthcare reform goal of providing more and better care at less expense.

"We seem to be in a cycle that can't be broken," he says. "Perhaps it is a good time as all of us struggle, and all of us work to implement healthcare reform, that we rethink where the precious resources we have to improve patient care are best spent."

In the years to come, hospital marketers will be tasked with making advertising more meaningful, more results-driven, and more in-step with what the public demands. The sooner your organization—and the industry as a whole—figures out how to do this, the better off we'll be.

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3 comments on "In Defense of Hospital Ad Spending"

Erick Kinuthia (12/24/2012 at 1:30 AM)
Good document.Use of social media in marketing of medical services remains to be important. Erick Kinuthia Team

Jeff Cole (12/19/2012 at 8:08 PM)
The problem with the pro-marketing argument is that - with the exception of emergency care - the vast majority of patients do not choose the hospital in which they are treated. We all have to go the hospital where out doctor has privileges. In Wisconsin, each hospital chain is buying up medical practices. There are very few independent physicians left. The doctors who work for the chains have to send their patients to their employers' facilities. So what good does it do for a hospital to advertise? There is choosing which hospital one can go to.

Charles F (12/19/2012 at 5:15 PM)
I believe we are less than three years from seeing the end of this debate. Currently, healthcare advertising is service line oriented, simply because that is how nearly all hospitals break down their budgets. And it makes sense from their business perspective, since adding a specialist in one field means the hospital needs to generate revenue in that field to maximize their investment. But, as I understand it, as healthcare reform takes hold and each hospital's revenue model changes, marketing will shift toward finding patients (the healthier the better) to, quite simply, keep healthy. Hospitals won't advertise knee replacements because doing so may cost them money. The referral network will be the driver for specialized services, and traditional advertising efforts will be aimed at attracting people who want to stay healthy, and providing them with the tools, networks and knowledge to stay healthy.




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