Advertising in Healthcare – Driving Up Healthcare Costs?

Some media coverage recently by NPR and AdvertisingAge addresses the issue of advertising in the healthcare industry – whether it’s a good use of healthcare dollars and whether it is money well spent. I’ve often asked the same question.

The AdvertisingAge piece notes that healthcare organizations are vying for top position in preparation for the impacts of healthcare reform and that social media is a communication tool that’s being rapidly embraced. Why the concern for position? Because healthcare reform is likely to result in millions of newly insured patients. And healthcare organizations will be increasingly competing for a share of this new market.

In the NPR segment, James Unland, editor of the Journal of Health Care Finance, questioned hospitals’ spending on advertising – especially in a tight economy.  One of his points – media advertising that extends beyond the hospitals’ actual market area. He suggests that public service announcements might be a better choice.

In any industry I think the wise use of marketing dollars – whether spent on advertising or other forms of marketing – is good business. But in healthcare, which is predominantly not-for-profit, it becomes more personal. Consumers feeling that it’s their money that’s being spent on these ads.  Unlike the soft drink industry, for instance, consumers feel they have a right to question the dollars spent on bringing in new customers.  Do they?

Social media is certainly an option to be considered, but the issue is the same. Time is also money. So, we should ask: “What is the value of the time being spent on social media efforts compared to the value attained?” Could that staff time be better spent engaged in other activities such as, as Unland suggests, generating non-paid media exposure for public service-related efforts?

In more rural areas, in particular, where the healthcare players are well known and their images already established, it’s tough to build a case that media campaigns are the right answer. In big cities, maybe… But, as Unland points out, dollars might be better spent wooing doctors who are the ones who drive patients to hospitals in most cases.

One thing is virtually certain with the advent of healthcare reform. It will drive healthcare costs up for most healthcare consumers. And, as this happens, healthcare organizations will be even more subject to scrutiny from their markets to justify their expenditures – on facilities, on staff and on advertising.

Personally, I think that level of scrutiny is good in any industry. It keeps us all constantly focused on monitoring and measuring the value of the things we do and using our – and their – dollars wisely. What do you think?

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