Columbus-Area Health Systems Spend Millions To Attract Patients

There’s an advertisement war underway in Columbus. As Central Ohio’s largest hospital systems — OSU, OhioHealth and Mount Carmel — are spending millions of dollars on marketing. What are the strategies behind the omnipresent hospital marketing ? The ads are everywhere: billboards, TV, radio, newspaper and online. Their slogans, “Believe in We,” “But For,” and “Because of You," are likely committed to memory. Hospitals spending the big bucks OhioHealth and Ohio State combined spent more than $20 million on marketing last year. Mount Carmel spent $5 million. As for those full page newspaper ads and billboards, OhioHealth spent $2.3 million and OSU spent $4.6 million on advertising. Mount Carmel refused to break out advertising figures. It’s a hospital advertising arms race said Boston University health care marketing professor Roberta Clarke. “If competitor A is spending $1 million, I better spend $1 million,” Clarke said. The fight for market share can get intense. In Pennsylvania, the governor intervened between two Pittsburgh rivals and asked them to stop the aggressive attack ads. In Columbus, hospital ads are positive, often giving patient anecdotes. Stiff competition But with three health systems which offer duplicate services, competition is stiff. “I wouldn’t say there’s real pressure. It’s almost more of an expectation," Sue Jablonski said. Jablonski is OhioHealth’s chief communications officer. OhioHealth was the only hospital system to agree to an interview. “We want you to already have us on the brain so that you want to know more," she said. "And so a lot of times you don’t know when you’re going to have the need and so we have to have a constant presence out there.” Its major focuses: neurosciences, heart, cancer...and women. “She’s the one usually making all the family healthcare decisions for herself, her kids and her parents," Jablonski said. “If you look at one of our new television ads for cancer...you’ll see a common thread. There’s a woman being treated for breast cancer, that’s an actual patient. There’s another woman in there who’s talking to obviously her father who has cancer. So while we hit a number of different people, the main focus is the female health care decision-maker.” Experts we talked with say hospitals target people who have choice in their health plans. Ohio Health accepts most major insurance providers in the area. The new Obamacare health insurance marketplaces and Medicaid expansion have given choice to thousands of people. Attracting patients 00000178-6a24-ddab-a97a-6a3ce1950000 Saint Joseph’s University health care marketing professor George Sillup said hospitals will look to attract people previously uninsured. Sillup said marketing and advertising builds a system’s reputation, and that, he said, attracts another billable group – more affluent patients. “Those who have the ability to pay and say, ‘I’m not in the network, but they are the best.’” OhioHealth spent roughly one-half of one percent of its total revenue on advertisements in 2013. But compared to other industries, like banking and retail, hospital advertising budgets are minuscule. Jason Brown, CEO of Brown Parker and Demarinis Advertising, in Florida, said budgets depend on the size of the system and the problem. But on average, he said, hospitals spend about one percent of their revenue on advertising. “Hospitals do run on extremely low and razor thin margins," he said. "So they aren’t in the position like software companies...where they can spend a much, much higher percentage on marketing. But they could probably spend 2 or 3 percent. And probably should.” Too much money on advertising? St. Joseph’s professor Sillup said he thinks hospitals spend too much on advertising. But market forces may change that. Standard and Poor’s predicts The Affordable Care Act will increase hospital consolidation and force cost cutting. Advertising executive Brown expects hospital advertising budgets to shrink and in the long term, “Make the marketing much more accountable, much more cost effective.” OhioHealth’s Jablonski agrees margins are shrinking as the federal government and private payers cut reimbursement rates. As a result, she expects advertising budgets to remain flat. “I can tell you, as our offerings are growing, as our footprint is growing, it’s going to take more money," Jablonski said. "That’s where I think the challenge is going to be for all of us as marketers." Are the ads worth it? Health systems and advertisers will say absolutely. Some academics are skeptical. Academics we talked with say the effectiveness of ads and return on investment is tough to measure. Health care and pharmaceutical professor Bill Trombetta, also at Saint Joseph's University, pulls no punches. “I’m probably the only guy who would say this, I think it’s a complete waste of time.” Trombetta said hospital systems should spend advertising money on building networks. “I would think of other ways to try to tie that patient in that would be more effective, and I could track my investment," Trombetta said. "Rather than say, OK, I spent $2 million in advertising. Maybe my sales went up. But maybe sells would’ve gone up without spending the $2 million. How do you know?” But Jablonski argues OhioHealth’s advertising is based on research. “We don’t just sit around with a bunch of creative people and say, ‘oh, well this is a good headline, and that would make a good TV commercial,'" she said. "We do a lot of market research with consumers, and it’s quantitative and qualitative to help us define our message and make sure that we’re getting them the information they want and they need.” Recently OSU President Michael Drake – a physician himself – downplayed Columbus hospital competition, saying they compete with disease and suffering. But those hospitals spend a lot of money letting us know about it.