Hospital Advertising, Competition, and HCAHPS: Does It Pay to Advertise?

Abstract

To test whether hospital advertising expenditures predict HCAHPS global ratings. We examined media advertising expenditures by 2,142 acute care hospitals in 209 markets in the United States. Data on hospital characteristics, location, and revenue came from CMS reports; system ownership was obtained from the American Hospital Association. Advertising data came from Kantar Media. HCAHPS data were obtained from HospitalCompare. Regression models examined whether hospitals' advertising spending predicts HCAHPS global measures and whether market concentration moderated this association. Hospital advertising spending was calculated by adding each individual hospital's expenditures to the amount spent by its parent health system, proportionally allocated by hospital revenue. Health system market share was used to estimate market concentration. These data were compared to hospitals' HCAHPS measures. In competitive markets (HHI below 1,000), hospital advertising predicted HCAHPS global measures. A 1-percent increase in advertising was associated with a 1.173-percent increase in patients rating the hospital a "9" or "10" on the HCAHPS survey and a 1.540-percent increase in patients who "definitely" would recommend the hospital. In concentrated markets, this association was not significant. In competitive markets, hospitals that spend more on advertising earn higher HCAHPS ratings on global measures.