Do Hospital Ads Work? Who’s Paying Attention and Why a Ban on Ads Increases Patient Readmission

New Marketing Science Study Key Takeaways:

• Patients are positively influenced by hospital advertising.
• Older patients and those with more restrictive forms of insurance are less sensitive to ads.
• Wealthy patients and patients who live far from a hospital respond well to advertising.
• A blanket ban on hospital advertising can lead to hospital readmissions.

CATONSVILLE, MD, August 20, 2019 – Should hospital advertising be banned? A few policymakers in Washington, D.C., have recently considered such an action based on a long-standing debate on whether it poses the spread of misinformation, and that it is not an effective or responsible use of an already limited healthcare budget. New research in the INFORMS journal Marketing Science studies the impact of a ban on hospital advertising, and whether those fears are justified.

Study authors, Tongil “TI” Kim and Diwas KC both of Emory University believe the results can help guide discussions about legislation pertaining to hospital advertising in the changing landscape of healthcare delivery.

The results show that patients are positively influenced by hospital advertising. Researchers say seeing a television ad for a hospital makes a patient more likely to choose that one.

“There are differences in patient response to ads based on insurance status, medical conditions and demographic factors like age, race and gender,” said Kim, a professor in the Goizueta Business School at Emory. “Older patients and those with more restrictive forms of insurance are less sensitive to ads while wealthy patients and patients who live far from a hospital are more likely to respond to advertising.”

The study looked at 220,000 patient visits between September 2008 and August 2010 in Massachusetts, observing characteristics like hospital type, geographic location and advertisement dollars spent.

But, does that advertising facilitate the spread of misinformation? Is it an effective use of hospital operating funds?

“Our research found that banning hospital advertising can negatively affect population health outcomes by increasing hospital readmissions within 30 days. A blanket ban on hospital advertising can lead to an additional 1.2 hospital readmissions for every 100 hospital discharges,” said Kim. 

Hospital readmission rate is a measure of hospital quality, and, according to the study, high quality (low readmission) hospitals tend to advertise more. Thus, advertising allows these hospitals to draw and treat more patients, leading to overall population level quality gains. A ban on advertising would then reduce the number of patients going to those hospitals and hence lower population level health outcome.

Kim added, “In short, we found that when you inhibit a hospital’s ability to attract new patients, you also negatively impact patient flow, and you contribute to an increase in hospital readmissions.” 

Link to full study.

About INFORMS and Marketing Science

Marketing Science is a premier peer-reviewed scholarly marketing journal focused on research using quantitative approaches to study all aspects of the interface between consumers and firms. It is published by INFORMS, the leading international association for operations research and analytics professionals. More information is available at www.informs.org or @informs.

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