Targeted Advertising of Preventive Medicine in Canada

Abstract

Canada’s universal health insurance system leads to the under-provision of disease prevention by consumers. This paper demonstrates that a public health education campaign designed to increase coverage of preventive treatment can easily have the opposite effect. Using a model of targeted advertising, I examine conditions under which private advertising is superior to a public education campaign in terms of health care outcomes. By assumption, an individual’s risk of illness is common knowledge. Advertising affects a healthy consumer’s perception of the pain and suffering that accompany disease. Public advertising can improve health care, but only if the government refrains from advertising to consumers who have a high risk of illness.