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Hospital Advertising


By now Americans are accustomed to seeing advertisements for medical goods and services. The steady supply of direct-to-consumer TV advertisements by the pharmaceutical industry is probably the most high-profile example. But while much has been written about the negative effects of these advertisements, the impact of healthcare service advertising—by hospitals as well as by individual physicians—receives comparatively little attention and almost no debate.

While advertising by doctors and hospitals has been legal for 30 years, until recently, professional taboos discouraged the practice. Increasing economic pressures and changing cultural norms have led, however, to the demise of these informal proscriptions, and advertisements produced by hospitals and individual providers are now common.

Yet arguments against healthcare-service advertising can be made on both ethical and economic grounds. While advocates of healthcare service advertising argue that the practice is harmless, often educational, and economically essential, several recent studies of healthcare service advertising reveal that medical centers and individual physicians often create advertisements that:

  1. Manipulate patients’ ignorance and vulnerability; and
  2. Stimulate demand for unproven or ineffective therapies.1-3

These advertising practices may lead patients not only to make poor decisions about disease treatment or health maintenance, they may also encourage unnecessary risks or foster unrealistic expectations. Further, the relatively unrestrained manner in which advertising for medical services is now practiced may increase the overall cost of healthcare.

Hospital Advertising and the Ethics of Patient Decision-Making

Those who support healthcare service advertising argue that on the whole decisions regarding the purchase of medical services are not significantly different than those related to any other kind of purchase. In their opinion, buying a car and buying a cholecystectomy are—in economic terms at least—not significantly different. They argue that while consumers of healthcare—like their car-purchasing brethren—should be protected from false advertising they don’t warrant protection from more subtle or manipulative appeals.

But if the “purchasing” of medical services is unique among commercial transactions, then one could argue that consumers of healthcare are ethically entitled to special treatment. Is medicine fundamentally different? It is in both the milieu in which purchase decisions are made and the special nature of the patient-as-consumer situation.

In the majority of circumstances, the consumer of healthcare services can’t truly be informed about what he or she is buying. Assessing the efficacy and safety of medical treatments requires time, reflection, and often expertise that most patients don’t have. Even if their sponsors’ intentions are honorable it is extremely difficult for medical service advertisements to convey the complex risks-and-benefits ratios that underlie intelligent medical decision-making. Complicating matters further, indicators of quality in medicine are extremely difficult to assess for the healthcare professional—let alone the layperson. As one author has put it, “the sheer complexity of medicine, and the quality measures it has available, virtually guarantees that any statement about quality that can fit comfortably in a popular advertising format will be deceptive … .”4

Admittedly, medicine isn’t the only area in which purchasers of goods or services have limited knowledge about the items they are buying. Few people—including this author—actually understand how computers or cars work. Medicine, however, is unique in that purchasers of medical services are not only relatively uninformed, but they are also uniquely vulnerable and dependent. More often than not, patients making decisions about medical services are under severe emotional and/or physical duress. They also depend on the skills, goodwill, and conscientiousness of healthcare providers.

Yet while the vulnerable and dependent position of patients should encourage scrupulous avoidance of manipulative or emotional messages in medical service advertising, frequently just the opposite is true.1,5 In a study of advertisements produced for academic medical centers, Larson and colleagues found that more than 60% of the advertisements directly appealed to patients’ emotions. Further, the same study found that medical centers consistently promoted procedures or therapies with unproven benefits.

Recent studies of healthcare service advertising reveal that medical centers and individual physicians often create advertisements that manipulate patients’ ignorance and vulnerability and stimulate demand for unproven or ineffective therapies

Hospital Advertising and Its Effect on the Cost of Healthcare Services

Hospitals, medical centers, and individual physicians currently spend millions of dollars annually advertising themselves to the public.6 The question is, “What is the return on all this money,” or (put another way) “Is all this spending worth it?” Certainly, the pervasive and increasing use of advertising by healthcare institutions indicates that the advertisers, at least, believe it is. But beyond the salutary effect advertising may have on a single institution, what is the cost of healthcare advertising for the healthcare system as a whole?

When hospital advertising first became widespread, one of the most pervasive justifications for its use was that it was not advertising at all; it was simply education.7,8 Advertising, it was argued, was a way for hospitals to educate the public on the need or availability of vital healthcare services. Defenders reasoned that it was not a matter of stimulating demand but rather of increasing utilization. While admittedly there are instances in which healthcare service advertising has increased the demand for necessary and efficacious services, it is just as likely to promote expensive, unnecessary, or inefficacious ones; for example, the aggressive advertising of whole-body computed tomographic and magnetic resonance imaging screening tests (a procedure whose benefit has never been proven and that may expose patients to invasive and costly follow-up tests).1,3,9

Admittedly, the costs of these screening tests are borne by the individual consumer, but the expensive and often unnecessary follow-up testing they may provoke are covered by all of us. Evidence also indicates that hospital advertising may (in part) be responsible for the public’s demand for costly and ineffectual treatments around the end of life, given the perception that higher technology and more advanced procedures are always better.1,9

We shouldn’t be surprised that the expansion of healthcare advertising has led to this situation. In essence, healthcare institutions that advertise without regard to the actual need for their products or services are simply behaving the same way more obviously commercial enterprises do. General Motors Corp. doesn’t need to consider the actual transportation needs of the public when it introduces a new car—only whether or not the company can sell it. By the same token, without standards for healthcare advertising that explicitly address the effect these advertisements may have on demand for unnecessary services, promotion of these often-profitable services will only continue and grow.

The Costs of Competition

Supporters of healthcare advertising also suggest that advertising is good for the healthcare consumer. They cite marketing theorists’ contentions that by providing the public with free and useful information, advertising lowers search costs—the costs associated with finding a good or service—and makes consumers more sensitive to product characteristics. The consequence, they contend, is that advertising not only ultimately lowers consumers’ cost, but it can also drive an increase in quality.10 These observations may have some merit with other sectors of the economy; they have little relevance in healthcare.

First, aggressive and well-funded advertising can easily overwhelm the disincentive of purchasing low-quality goods or services—particularly in a field like healthcare, in which quality is so difficult to measure objectively. Further, in an area like healthcare, in which there are legal restrictions on price competition and consumers typically pay through a third-party intermediary, there is little if any room for advertising to promote lower costs. The fact is that healthcare advertising is more likely to be inflationary.

When a hospital spends money to promote its new open-heart surgery program, it is most likely competing with other institutions for the same pool of patients. Because the supply of potential consumers of this service is limited, other institutions will be forced to spend more money promoting their own programs simply to maintain the market share they already have.11 As a result, advertising by one institution only increases pressure on advertising budgets across the board—a situation that inevitably leads to higher costs universally.

Advocates of healthcare advertising also argue that it can be good for the community. They argue that advertising may increase revenue for a healthcare institution, thus enabling the institution to more vigorously pursue its mission. Because the demand for legitimate healthcare services remains relatively fixed, however, the only growth healthcare advertising typically creates comes at the expense of a competitor.12 The consequence of this “zero sum game” becomes starkly apparent when one considers that hospitals and medical centers tend to compete only for the most well-insured or affluent patients. There is little healthcare advertising directed at conditions that disproportionately affect the poor or uninsured. Hospitals or medical centers with the best or most aggressive advertising campaigns tend to “cherry-pick” the highest-paying patients, leaving those patients who are less likely to pay concentrated at centers that are unable to compete. This concentration of poorly reimbursed or free care at institutions struggling to maintain financial viability can, over time, lead to lower quality and, if the institutions fail, decreased access for the most vulnerable.


With economic pressures and competition for healthcare expenditures growing, hospitals and individual physicians will continue to look to advertising healthcare services as a means to increase revenue. Yet patients are fundamentally different than other types of consumers. Given the typical patient’s combination of vulnerability and inequity of knowledge, it is clear that healthcare consumers deserve special protection from advertisements that play to emotions or ignorance.

Additionally, because we as a society collectively foot the bill for healthcare costs, we must think about whether we can count on individual hospitals and healthcare providers—with their own narrow financial agendas—to abstain from advertising that unnecessarily promotes increased expenditures and costs.

More studies on the direct costs of healthcare service advertising need to be done, and more light needs to be shed on the effects of the millions of dollars advertisers spend annually. Some advertising of medical services may indeed be necessary, but it cannot be allowed to threaten informed patient decision-making or the economic viability of our healthcare system. TH

Dr. Oxman is a hospitalist, a critical care and infectious diseases fellow in Boston, and a former fellow in medical ethics at Harvard.


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