Direct-to-Consumer Hospital Advertising and Domestic Medical Travel in the United States.

Abstract

Expanding hospitals' geographic market area has been proposed as a means to increase competition and reduce healthcare costs. However, most patients in the United States receive care locally and are unlikely to seek out distant hospitals, effectively limiting competition to local markets. We hypothesize that mass media advertising can help overcome patients' reluctance to travel for elective medical care. We examined hospitals' advertising in distant markets to determine whether their expenditures predict the number of patients who travel to those hospitals.We obtained data on 2015 advertising expenditures by 273 U.S. academic medical centers from a market research firm. Regression models examined associations between hospitals' advertising expenditures and patient volume metrics: inpatients, encounters, and charges originating from distant markets where the medical centers advertised. Results showed that hospitals' advertising expenditures in distant markets were associated with higher numbers of inpatient admissions, patient visits, and charges from those markets. Compared to the distant markets where they advertised, the hometown markets of these hospitals are smaller with lower per capita income, suggesting hospitals are seeking incremental patient volume from more lucrative markets.Findings suggest that advertising may familiarize patients with distant facilities, encouraging domestic medical travel and enabling broader geographic competition among hospitals.