Does Advertising Matter to Emergency Patients? The Effect of Advertising on Hospital Choice, Travel Distances, and Mortality Rates

Abstract

The U.S. healthcare industry has undergone significant changes in recent decades. Consumers have become increasingly involved in choosing healthcare providers, and providers have escalated their direct-to-consumer advertising efforts. However, the impact of hospital advertising on emergency patients remains largely unexplored, despite the ongoing debate surrounding the value of this marketing strategy. This study examines the impact of hospital television advertising on hospital choice and subsequent health outcomes of emergency patients using data on more than 92,000 individual patient visits in Florida between 2012 and 2015. Findings suggest patients are more likely to choose hospitals that advertise more, with older, unhealthy, or lower-income patients being more responsive to advertising. By influencing hospital choices, advertising can subsequently impact emergency patient health outcomes via (i) changing the travel distance to a selected hospital; and (ii) altering the quality of care received. Counterfactual analyses show that advertising contributes to higher mortality rates, with 27% of this increase attributed to greater travel distance and the rest attributed to a lower quality of emergency care in the hospitals that advertise. These findings emphasize the importance of carefully examining hospital advertising practices for emergency patients, particularly in light of the changing landscape of consumer-driven healthcare.

Keywords: healthcare marketing, advertising, emergency patients, direct-to-consumer advertising, discrete choice model, structural model