Advertising spreads among hospitals, prompting concerns about price hikes

Providers are jumping on the bandwagon along with pharmaceutical firms to advertise and market their services, actions that likely contribute to the overall rise in healthcare prices.

The healthcare sector spent $14 billion on advertising in 2014, up 20 percent from 2011, according to The New York Times. "What hospital or clinic these days doesn't trumpet its services to its customer base (people formerly known as patients)?" the article asked.

Indeed, spending on advertising buys for hospitals has gone up by a third since the start of 2012. Competition for patients among hospitals, particularly in urban areas, is fierce, and is driving many organizations to pursue more marketing campaigns in order to ensure that their market share does not erode.

Large hospitals have even been fine-tuning their messages in recent campaigns. For example, New York-Presbyterian Hospital uses patient stories for marketing purposes in order to create a stronger brand with a cohesive message.

Both advertising for hospitals and drugs tend to be on an emotional rather than an information plane, raising concerns that it may lead to overutilization and overprescribing, both of which can drive up costs. "There was not much actual information, and what there was focused much more on benefits than on risks," Yael Schenker, M.D., a doctor at the University of Pittsburgh specializing in end-of-life care who studies healthcare advertising, told the newspaper. "The narrative was emotional and there was nothing about cost."

Advertising for drugs has been going on for a longer period than hospitals, and costs for pharmaceutical are rising faster than any other facet of healthcare delivery in recent years.

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