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Samsonaethics
1. Healthcare Marketing in the Information Age- Acquiring and
Serving Patients Ethically
1
Healthcare Marketing in the Information AgeAcquiring and Serving Patients Ethically
Aaron Samson
Morehead State University
2. Healthcare Marketing in the Information Age- Acquiring and
Serving Patients Ethically
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Abstract
It is no surprise that hospital marketing ploys have come under fire within the last decade. The
ever-increasing healthcare competition has begun to reach new heights, especially due to the recent
economic recession. Medical centers across the country have been focusing on reducing margins in
order to continue their business of healing patients. The last decade saw a reemergence of a type of
“arms race” in healthcare brought upon by the consolidation of several large institutions and additional
cost pressures by private and public players (Devers et al., 2003). Several administrators have told Press
Ganey, an independent research firm for hospitals, that ten percent had to be removed from their
budget (Putre, 2009). While the healthcare sector was largely missed by the effects of the recent
downturn, some of the marketing trends will continue years into the future. Not only do hospitals have
a responsibility to ethically attract patients, they also have a responsibility to ethically serve patients and
their best interests. Managed care makes necessary the fact that managers must be ready to deal with
ethical dilemmas in organizations with fiscal constraints (Peer & Rakich, 1999).
The marketing of healthcare has not always been as easy as some may envision. Many patients
(consumers) attempt to avoid healthcare service advertisements displaying their likely future need for
the services. The typical method of targeting products and services to a specific audience and then
identifying a brand with that audience has proven most difficult (Rooney, 2009). Healthcare finally
adopted the use of a formal marketing definition in the late twentieth century in order to track quality
of care and market dominance, among other things. Still yet, by 1991, a high marketing intelligence was
identified in only 20 percent of (White et al., 2001).
This research is intended to observe the effect of recent trends in healthcare marketing on the
ethical boundaries of institutions, physicians, patients, and the media. Specific examples are used to
magnify current issues with marketing testing, quality awards, and an overall good continuum of care. It
3. Healthcare Marketing in the Information Age- Acquiring and
Serving Patients Ethically
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will also examine the various avenues through which hospitals are using to advertise to potential clients
and current patients, and the effectiveness and ethical implications of these encounters. Finally, the
author leaves the reader with the responsibilities that the interested parties have in ensuring a vibrant,
efficient, and ethically-sound healthcare system in the future.
Making a Connection
The marketing of healthcare services to potential customers has taken on a different meaning in
the 21st century due to the competition among private and public hospitals in an ever-growing babyboom-aging population. There are a plethora of considerations for effective and ethical healthcare
marketing tactics. Many of these touch points occur even before a patient has left their home. Using
actors and models instead of patients and healthcare personnel as well as the inclusion of awards
information and survey results can impact marketing efforts (Gershon & Buerstatte, 2003). The addition
of unsupported claims and messages that create demand for unnecessary services often bring about
ethical considerations (Gershon & Buerstatte, 2003). Additionally, patient referral activities must stay
true to providing the best care location for patients. According to Howard J. Gershon, the organization’s
chief executive officer needs to be the chief ethics officer as well. “The CEO’s office is where the
organizational culture starts, so it should be where the buck stops,” he says (Gershon & Buerstatte,
2003, p. 294).
The internet age has afforded medical institutions with a greater efficiency than conventional
marketing. In comparison with other online activities such as shopping, stocks, and sports, healthcare
information is accessed more often (Erdem & Harrison-Walker, 2006). This trend is likely to continue in
the future. Venkatesh (2008) takes notice that from the point of view of branding, customer satisfaction,
or goodwill, online marketing efforts are effective. Also, the locus of control has shifted from the
provider to the consumer, focusing more on consumer’s wants, needs, and expectations. One deficiency
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Serving Patients Ethically
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of conventional marketing was the inability of consumers to recognize hospital rating systems such as
CAP, JCAHO, or ASHI. Robeznieks (2007) puts it in perspective by comparing how the public can
recognize the J.D. Power Trophy before they can recognize JCAHO accreditation. For example, the HCIAMercer Analysis done by an information company and a resource management firm only benchmarks
financial and operational success as well as clinical quality, not helping consumers chooses hospitals
(Jaklevic, 1996). Research indicates that hospitals with more competition tend to promote their quality
awards more frequently on their websites (Revere & Robinson, 2010). Further discussion of using
surveys such as J.D. Power and Nielsen to capture patient satisfaction is ongoing.
The need for healthcare marketing has continued to be a pressing issue, especially in the light of
rumors of healthcare reform and an aging population. When examining the placement of such
marketing ploys to attract patients, hospitals often set up suburban outposts in order to more closely
serve patients in a particular area. However, much of the marketing of healthcare in the United States is
determined by insurance coverage (Latham, 2004). Brokers for health insurance companies such as Blue
Cross Blue Shield (BCBS) often sell plans to customers even though they know their plans are not the
“best fit” for their customers’ needs. Also, this involves maintaining a good relationship with the
insurers, even though the insurers often treat the employees badly (Latham, 2004). Another issue
involves the pricing of such medical services. As a known fact, government programs such as Medicare
and Medicaid pay only the amount necessary to cover fixed costs and overhead, but not enough to
cover patients’ full costs of treatment (Latham, 2004). This forces healthcare organizations to place the
additional costs with the non-program insured patients, where prices are determined by market values
and negotiations with many other companies.
With cost-cutting occurring on a regular basis in the healthcare sector, many have begun to
worry about the ill effects of cutting costs on healthcare quality. One issue that complicates the pricing
of healthcare is detection of quality. High quality care can result in good prognosis due to the limiting
5. Healthcare Marketing in the Information Age- Acquiring and
Serving Patients Ethically
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factor of disease while good quality care can result in poor prognosis due to our mortal nature and the
unpredictability of illness (Latham, 2004).
Several obstacles have existed with healthcare marketing with regards to the ethical treatment
of patients and patients’ information. The Health Insurance Portability and Accountability Act (HIPAA) is
a set of consumer protection standards implemented in response to unethical or discriminatory use, and
the unethical dissemination of patient information. With new technology emerging that focuses on
health outcomes as well as marketers’ overall return, providers are bounded by the rules of HIPAA
(Rooney, 2009). From a patient’s perspective, they want access to knowledge and information that can
help them, and this anonymity allows this bypassing of HIPAA on most accounts.
Truth or Dare?
The promotion of these medical services to potential clients can be deceptive and untruthful,
especially due to the information available and companies’ willingness to prey on customers’ fear,
anxiety, or depression (Latham, 2004). In regard to the sheer complexity and measures of quality
available in medicine, Latham (2004) states “…quality that can fit comfortably in a popular advertising
format will be deceptive, because it can only be a partial truth” (p. 248). This paradigm between quality
and cost are often complicated more because patients are not usually experienced and “informed
buyers” when it comes to healthcare services. Some phrases that may lure inexperienced buyers include
easy, safe, painless, bloodless, pioneer, leader, or world famous (Bonvissuto, 2008). A patient’s
physician, or purchasing agent may benefit from the direct profit or revenue generated by a third party.
To protect the ethical behavior of physicians, many hospitals have patient advocates who facilitate the
treatment process and monitor the well-being of the patient.
6. Healthcare Marketing in the Information Age- Acquiring and
Serving Patients Ethically
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How much information is truly available for the public to make decisions on their own
healthcare? The American Academy of Family Physicians (AAFP) consistently strives to address the
conflicts of interest and breaches of conduct that may appear in the industry. The AAFP has also vowed
to assist the public in sifting through medical recommendations, much of which is contradictory. Despite
the wealth of articles focusing on healthy eating and weight-control issues, 52 percent of Americans
have said they need more information about nutrition and healthy eating (ADA, 2008). By establishing
the Consumer Alliance Program (CAP), AAFP improved their outreach to Americans and expanded their
ability to identify, peer-review, and synthesize health information into a comprehensive and patientfriendly format (Heim, 2010). Oddly enough, the alliance partner with AAFP in this initiative is The CocaCola Company.
Many in the healthcare field have begun to take notice of some of the often unusual marketing
tactics used to attract patients. One advertisement for a Detroit-area hospital claims that other doctors
aren’t as qualified as their own. The radio advertisement continues in saying that “we know of no other
hospital with a tougher credentialing process, or a higher percentage of board-certified surgeons”
(Tieman, 2001, par. 6). This type of statements allows the hospital to make a generalized comment
without using information to substantiate the claim. In less than two years, this hospital has spent
almost half a million dollars on the radio advertisement. When questioned about the seriousness of the
ads, marketing director Mike Killian acknowledged that the serious tone of the ads were necessary
because choosing a physician is an important issue (Tieman, 2001). Hospitals’ sponsorship of medical
segments during TV station broadcasts clearly threatens the boundaries of current codes (Kaufman,
2008). Other hospitals choose to operate their ad campaigns with softer information, such as how
physicians communicate with patients and understand their “cultural uniqueness” (Tieman, 2001). The
American Medical Association discourages ads from hospitals that address the competence and quality
of physicians unless they are factually supported. Additionally, the AMA encourages doctors to be
7. Healthcare Marketing in the Information Age- Acquiring and
Serving Patients Ethically
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involved in the marketing and advertising of services. In the case of the Detroit hospital, physicians did
review the ad, but industry experts widely agree that urging patients to go to a certain hospital is against
industry standards. Unlike other industries, the medical field has a responsibility to report factual
information in advertisements, especially when dealing with life and death medical conditions.
The ethical considerations for healthcare marketing extend beyond the actual care itself. In
2008, CMS officials initiated a clampdown on the Medicare Advantage Program by proposing new rules
(DoBias & Lubell, 2008). The Medicare Advantage Program was criticized in the past as being too costly
relative to the traditional program. The proposition was meant to place a moratorium on door-to-door
sales as well as alter the commissions so bonus payments are consistent (DoBias & Lubell, 2008).
Senator Max Baucus (D-MT) stated that the shady marketing tactics would be quashed, and they will
protect America’s seniors from being harassed and solicited for unnecessary services (DoBias & Lubell,
2008).
If for no other reason than economic, hospitals have a reason to promote their organization
under ethical considerations. In addition to the costs of running ad campaigns and public awareness
events, other charges may accrue if ads are incorrect or based on false claims. Public relations firms
often charge a higher rate for a rapidly unfolding campaign because it can be costly to research the
issues at hand and execute a sound plan (Nelson et al., 2008). The executive team and trustees may be
diverted from other activities, employee morale may suffer, and employee recruiting may also be
impacted in the future. Ultimately, the long-term impact of patient self-referrals may significantly
decrease the organization’s market share. Especially true is that fact that long-term costs are likely
incurred long after the ethical issue has passed, as losing the trust of stakeholders is an expensive event
from which to recover (Nelson et al., 2008). Whereas it was once considered naïve to believe that
8. Healthcare Marketing in the Information Age- Acquiring and
Serving Patients Ethically
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integrity was part of effective marketing, the opposite is true today. It will soon be considered a reason
to buy, if not a price of entry into the market for organizations (Upshaw, 2007).
Knowing What’s Best
Ethical healthcare management is a challenging task that is complicated by a number of factors.
The manager must continually strive toward the goals of the organization, but also reach for the goals of
their constituencies as well. Often, inpatient treatment is elevated by marketing efforts, so patients
expect much when they visit the organization.
One of the first steps of marketing services to patients on an ethical basis begins with
understanding what a patient needs. In order to maintain current care standards, patient care
professionals should continue to assess which services are necessary (Latham, 2004). Often, this might
involve the bundling or unbundling of medical services to foster more closely to patients’ needs. The
impetus behind bundling began with the need to make intra-group referrals and consultations easy, and
minimize the transaction costs of contracting with payors and patients (Latham, 2004). However, even
more important is the need to cater the services to the needs of the patient to create the necessary
services.
When it comes to patients self-advocating due to their newfound information with hospital
services or new technology, there may be issues. Patient awareness and negotiation with one’s
physician is laudable and a greater indication that patients are taking more of a role in their own
healthcare. However, advertisements focusing on medical technologies such as full-body CT scans
scantily mention any rigorous clinical evidence or subtleties with who should or should not undergo such
a procedure for a given disease process (Rosenberg, 2009). This is especially true in light of the
industry’s skepticism on the safety of total-body radiation from CT scans. In a recent publication, the
9. Healthcare Marketing in the Information Age- Acquiring and
Serving Patients Ethically
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leading proponent of CT scans likens full-body CT scans to a marketing ploy rather than an important
diagnostic tool (Brant-Zawadzki , 2002). Yet another opponent to full-body CT scans explains that when
the probability of benefit is low and the risk of harm is more trivial, good faith or even proof that early
detection saves lives is not enough (Stolberg, 2003). In contrast, one study claims pharmaceutical
advertisements raise the public’s awareness of conditions and diseases that often go undiagnosed and
untreated (Meade-D'Alisera, 2001). Healthcare providers marketing screening must understand the
details involved with screening that include information on benefits and harms, radiation exposure,
assurance that the equipment is adequate, and screening intervals are maintained (Stolberg, 2003).
These “new discoveries” are all too common in the healthcare field. Protection for patients is
limited because patients as consumers, not government regulators, have sufficient training or expertise
to assess the product or service (Stolberg, 2003). Often, physicians struggle to keep informed due to the
rapid pace of development. Once the product enters the medical pipeline, patients are willing to “snatch
up” the new novelty if it will heal their migraines magically or cure their arthritis.
Advertising in the medical sector is most surely to continue in the future. Therefore, it is
necessary for healthcare providers to consider and address new pressures, possible by using the query
as an entry point for physician-patient discussions on risk, planning, and prevention (Rosenberg, 2009).
Leah Rosenberg of the Mount Sinai School of Medicine claims that creating a new approach to patient
innovation will “buttress professional beneficence while also motivate patients to think for themselves
and discuss concerns related to screening” (Rosenberg, 2009, p. 23). In this case, advertising serves as an
entry point to discussion, but gives way to in-depth discussion where information is correctly shared and
important questions are answered. However, many feel that advertising leads to generally skeptic
consumers instead of trusting patients, seemingly contradicting the medicine’s need to promote and
nurture trust (Capozzi & Rhodes, 2000).
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Serving Patients Ethically
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Health Product Differentiation
Recently, growth in the advertising of genetic testing has peaked interest with consumers. Many
of these genetic tests, such as BRCA for breast cancer testing, are marketed directly to consumers (DTC).
Most of the consumers have little to no knowledge of the basis behind these tests or the interpretation
of the results. These genetic tests still require physician authorization before the testing is done. There is
no advance consultation with a genetic professional, and afterward there is no discussion with a
physician to interpret the results (Chapman, 2008). Still yet, primary physicians may have little
knowledge themselves about consultations for genetic testing. For most clinicians, discussion about the
genome and proper treatment is still in the future (Guttmacher et al., 2007).
One may ask if there has been a significant growth in this market due to the new-age horizons of
genetic tests. Myriad, the company that markets the BRCA test, conducted a study that confirmed this
suspicion. A significant increase in referrals for BRCA testing for mostly non-high-risk patients was seen
after their campaign in Atlanta and Denver (Myers et al., 2006). There is no question why companies
would be interested in cashing in on this type of internet-based marketing boon. There are currently no
United States Food and Drug Administration regulations against companies that market and sell these
genetic tests. Chapman (2008) suggests that primary physicians improve their education with genetic
testing, and the government take action to improve oversight of genetic research. California and New
York state governments are trying to regulate online gene testing by requiring patients to have a testing
request from a regulated doctor (Langreth & Herper, 2008).
The marketing of hospital services often extends beyond the elective surgeries and genetic
testing usually displayed in ads (ex. gastric bypass, DaVinci robot open-heart surgeries). A discussion
panel by the Catholic Health Association (CHA) identified several opposing opinions when it came to
healthcare marketing for necessary, or in some cases unnecessary, services. Panelist David Seay stated
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Serving Patients Ethically
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that some healthcare marketing tactics may rule out some needed services for select patients because
they are unprofitable (“Ethics Questioned”, 1990). On the opposite side was Kathy Kohrman, director of
marketing for Seton Medical Center: “Marketing helps us define community needs and determine how
best to fulfill those needs. It provides primary research to reach the vulnerable” (“Ethics Questioned”,
1990). The general consensus of the panel was that hospitals must not get carried away with making
profits and ignoring the needs of patients at an ethical cost. It is the writer’s viewpoint that it will be
profitable long-term if hospitals follow some needed services that are unprofitable. Providing these
services may prove to be a profitable niche if growth occurs in the future (and/or hospital efficiency
improves). Additionally, customer lifetime value increases profit, and the reputation of the hospital is
further established as a full-care provider. Overall, providing necessary services that may be
unprofitable is certainly an ethical issue. Private hospitals should have no requirement to perform these
services, but it is in their best interest to entertain the possibility of using these services to propel the
hospital into a profitable niche.
In addition to the marketing of healthcare procedures, services, and genetic tests exists the
prescription world. There has been a phrase developed to describe how some drug companies have
begun to prey on consumers with various tactics, commonly referred to as “disease-mongering”.
Diseases such as erectile dysfunction, prehypertension, restless leg syndrome, and social anxiety
disorder are all relatively new cases. Male pattern baldness was linked in the media with serious
emotional consequences and risks of unemployment at the same time a new medication was
announced (Moynihan & Henry, 2002). These “treatable diseases” were rarely seen until companies
such as GlaxoSmithKline and Pfizer were approved for their treatment. One problem with these false
claims is that the vagaries of everyday life, such as shyness, sadness, or just an upset stomach are being
turned into medical conditions (Arnst, 2006). Drugmakers contend that they are only trying to educate
patients who are struggling with serious illnesses. Many in the general public are unsure if physicians are
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Serving Patients Ethically
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discriminating enough to determine if drugs are appropriate. Pharmaceutical companies routinely
subsidize continuing education courses for physicians as well as fund research for diseases that gets
published in medical journals. They also underwrite patient advocacy groups, who in turn promote the
drug ads on their web sites (Arnst, 2006).
Discussion
In the competitive market of patient care, doctors must promote core patient quality awards as
a sign of quality care. In treating patients, doctors must not become too closely linked with
pharmaceutical companies in order to provide unbiased care (Dear & Webb, 2007). They must focus on
the overall care of the patient, and marketing ploys by drug and service companies must take a back
seat to treating the consumer on hand.
Patients, as consumers in the market, also have a part to play. Namely, they must encourage
distance between disease awareness groups and the pharmaceutical industry (Dear & Webb, 2007).
They also must continue to inform themselves, as the phrase “knowledge is power” rings true, especially
in the healthcare world. Patients should use all the tools at their fingertips to gain access into the true
nature of healthcare organizations. This may include the organization’s history of accreditations, blog
sites, and personal accounts of visits to the institution. Patients must also consult their primary care
physicians (PCP) when considering genetic testing for any reason. They must ensure that a professional
analysis will be available when results are finalized. The interpretation of results could mean the
difference between treatment and no treatment. It is my own experience that patients are becoming
more educated about their treatment options. They have more information available than ever, and
they are taking more part in their own care.
13. Healthcare Marketing in the Information Age- Acquiring and
Serving Patients Ethically
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The media also have a central role in promoting products and services responsibly. Too often,
medical stories appear in the media without a mention of the source of the information and without
questioning the side effects, drug benefits, or questions of disease prevalence (Dear & Webb, 2007).
More often than not, government legislation has been required to coerce the media and advertising
outlets to follow standard medical marketing guidelines. However, the media must somehow
understand the ethical implications of such marketing efforts, and that much of the public being treated
for or prescribed to do not require medical intervention. The media have ample opportunity to assist the
impact the health of the nation, but only if they allow ethical standards to guide their actions. TV shows
such as Dr. Oz and Oprah have provided segments which focus on exposed medical mysteries and
answering everyday questions. Radio shows including the John Tesh Radio Hour provide medical bits of
information that a patient can discuss with their physician if they are interested. Instead of addressing
profiting companies, these types of media should uphold ethical standards that promote the well-being
of consumers.
Finally, healthcare organizations have a responsibility as the institutions of care. Research has
indicated that fully 95 percent of hospitals either have an ethics consultation service or are in the
process of developing one (Fox et al., 2007). The organizational culture of the institution must promote
ethical marketing practices. As stated above, this must begin with the CEO and “trickle down”, affecting
all areas that involve patient recruitment and decisions about patient care. They must also promote
good quality patient care, instead of being a profit-hungry business bent on bringing in dollars. Within
organizations, there exist two recommendations to identify unethical events and promote ethical
behavior. Once the ethics committee responds to the conflict, they must work to identify the underlying
causes of the conflict and take corrective action to eliminate recurrence. Second, the organization
should proactively identify areas in the facility where ethical conflicts have been recurring (Nelson et al.,
2008).
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Serving Patients Ethically
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Institutions also have a responsibility to limit the market’s involvement and provide the best
quality care with the services available. For instance, services that are known to be unprofitable should
be provided nonetheless. The hospital’s responsibility is to improve the efficiency of this procedure or
service in order to provide the community with necessary care. An obvious extrapolation is that there
would be no service to provide if there was no demand for the service at all. As described above, this
may prove to be profitable for the institution in the long-term.
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Serving Patients Ethically
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