Tip: Hospitals Try PSAs Before Spending On Ads

With the economic downturn, hospitals have been facing budget cuts, especially in their marketing divisions. But should most hospitals even be spending money on advertising? Lynn Neary speaks with James Unland, editor of the Journal of Health Care Finance.

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LYNN NEARY, host:

Patients may like the idea of speed dating to find a new doctor, but there are those who think hospitals are going too far in their efforts to attract clients. Some critics question whether hospitals should be advertising at all. Critics like James Unland. He's the editor of the Journal of Health Care Finance, and he joins us from WBEZ from Chicago.

Good morning. Good to have you with us.

Mr. JAMES UNLAND (Editor, Journal of Health Care Finance): It's great to be here. Thank you, Lynn.

NEARY: What I was wondering about this, is why advertising is needed for a hospital. It seems like most of us only go to hospitals when we have to. It doesn't seem like the kind of product or service that we would use because we saw an ad that somehow impressed us.

Mr. UNLAND: I am not opposed to hospitals marketing, appropriately, to their own service areas. My issue comes with the huge expenditures on TV and broad based media advertising thats very, very expensive. They're doing a lot of radio, a lot of billboards, and some of the billboard advertising is making claims that are questionable, in my view.

I mean there are some things that hospitals need to get the word out on, but they can do that through public service announcements. For example, if they're giving swine flu vaccines, certain types of screenings. The media is almost always receptive to doing news reports or doing PSAs.

NEARY: Now, one argument that I've seen in favor of advertising for hospitals is, I think, speaking to what you have been alluding to. And that is the idea of advertising in a local area, because some of these smaller hospitals are trying persuade people to go to the local hospitals and not travel to a bigger city or a bigger hospital, and perhaps even spend more money.

Mr. UNLAND: Well, I think that hospitals have much more cost-effective weapons at their disposal now, than TV, radio or billboards and so on. First of all, direct mail; more important than that is the Internet. The great thing about the Internet is that the unit cost of telling the story of the hospital and what services it has is minute. And you can tell a long story. You can interview your doctors. You can give people a virtual tour. You know, that type of thing.

NEARY: Earlier this year, the Vermont legislature toyed with the idea of banning hospital advertising. That idea was scrapped. But do you think it's a good idea? Should hospitals be banned from advertising altogether? Can they be?

Mr. UNLAND: I dont know if they can be, under Freedom of Speech. But I think the better argument to make to hospitals is for regulators and people to say to them: look, you have a charitable mission; dont throw this money down the drain in expensive TV ads where you only get 30 seconds of advertising. Use your money more wisely.

NEARY: Well, when did it become more common for hospitals to do this kind of advertising, and what was the impetus behind it?

Mr. UNLAND: It became more common, really, in the '80s, when hospitals executives started being wooed by ad agencies and when they started to succumb to, frankly, the sex appeal of TV ads. And hospitals, especially in metro areas, became very competitive and they figured they needed to brand themselves. But the problem in metro areas, is that each hospital only serves a tiny percent, geographically, of that area.

So, for example, in the Chicago area, a hospital that serves 250,000 population catchment area may be buying ads for a population that reaches 10, 20 million people. I mean...

NEARY: So it's not worth the money they're spending, you're saying.

Mr. UNLAND: Exactly. Actually, the marketing that hospitals do is just as better done to doctors, because doctors are the lifeblood of hospitals. More than 90 percent of patients encounter hospitals by a referral from a doctor.

NEARY: Right.

Mr. UNLAND: So marketing and having events that bring doctors and patients together is a good idea, but thats a very local idea and doesnt require throwing money at TV and radio.

NEARY: James Unland is editor of the "Journal of Health Care Finance," thanks so much.

Mr. UNLAND: Thank you very much.

NEARY: And you're listening to MORNING EDITION from NPR News.

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