The contents of this report reflect the views of the author(s), Imagine Health. They do not reflect the views or policies of Modern Healthcare or Crain Communications, Inc.
Hospital marketing budgets are on the rise, as new value-based care models demand higher patient volumes to make up for an end to fee-for-service payments per procedure. For instance, a recent article published in the Journal of the American Medical Association found that between 2005 and 2014, ad spending by 890 U.S. cancer centers tripled to $173 million, from $54 million. Meanwhile, the study found that advertising spend was not at all correlated with quality.
In many cases, these cancer centers are advertising in national publications, hoping to influence patients to travel long distances to get the “best” care for their cancer. Researchers found that these advertisements were often manipulative and misleading, especially when directed at such a vulnerable population.
It's sad but is it any wonder that consumers are susceptible to this kind of marketing? After all, hospitals aren't required to disclose their quality scores, as determined by the Centers for Medicare and Medicaid Services, or by other well-respected national health care quality organizations. Many of the advertising campaigns are created simply to appeal to consumers' emotions.
For employers, it's a scary proposition. Workers may be choosing their hospitals and doctors based on billboards, radio ads, a sign on a bus, or by word of mouth recommendations from their friends on Facebook. They may be choosing inefficient, lower-quality care, and with a broad-based PPO health plan, there is little employers can do to positively influence these decisions.
It's surprising that even as many hospitals' margins are shrinking, they are shelling out an increasing amount of money to promote themselves. Tactics are becoming more elaborate. For instance, two strategies outlined in an article in Health Leaders Media are “geofencing”, and “geoconquesting.”
Geofencing will trigger ad copy on consumers' phones once they enter the geographic area of the hospital, as if the hospital is a nearby coffee shop they may want to visit. Geoconquesting is a competitive tactic which automatically directs consumers to a specific doctor or hospital when they are physically in another provider's location. Healthcare organizations then use these digital tools to analyze how well targeted offerings bring in patients.
Here at Imagine Health, we believe a hospital or doctor's best advertising is none at all. The best healthcare providers don't need marketing tools to attract patients, because they have data. And no amount of marketing can fix bad quality.
Employers who choose to reward the best providers, not those with the loudest or shiniest marketing campaigns, also deliver an important benefit. The best healthcare providers can continue focusing their investments on patient care, rather than mining their customer relationship management software for insights as to how to target a certain demographic of patients.
Ultimately, employers want to direct care to the most deserving providers and keep your workers safe from misleading advertising, which could lead to sub-standard care. The result is a healthy workforce and a healthier bottom line for your business.