The Average Marketing Budget for a US Hospital
It has never been more difficult for hospitals to make money. While medical expenses have skyrocketed, reimbursements are dropping. Additionally, many hospitals are making the shift from nonprofit entities to businesses owned by for-profit companies. This has only increased the pressure to increase revenue. As a result, many hospitals are increasing their marketing budgets. The evidence is in the expenditures: Between 2000 and 2009, hospital spending on marketing and communications doubled.
According to a 2009 survey by the Society for Healthcare Strategy and Market Development, the average marketing budget for an American hospital ranged from $1.3 million for an independent hospital to about $5.8 million for a big health system. Though that may seem like a lot of money, it makes up less than 1 percent of the typical hospital budget.
Hospitals are spending the bulk of their marketing budget on traditional television, newspaper and billboard advertisements. According to a 2010 survey by the American Hospital Association, health care institutions spent an average of $883,000 on advertising. However, this number varies significantly from hospital to hospital. Additionally, large institutions tend to spend disproportionately more on advertising. Hospitals with more than 400 beds spent an average of $2.18 million on advertising in 2010. New media is also getting a growing share of the pot: According to a 2012 study by UBM Medica, hospitals spend about 25 percent of their marketing budget on digital and social media advertising. The bulk of this money is spent on writing copy for a hospital's website and improving the hospitals ranking on line search engines. Additionally, hospitals use some of their marketing budget to host events like free health fair screenings or meet-and-greets between potential patients and doctors. Some of the marketing budget is also used to try to convince physicians to send their patients to a particular hospital.
A successful marketing campaign builds a hospital's brand over time. Some do this by advertising a particular elective procedure or expensive piece of equipment. Others use their budget to educate patients on the ins-and-outs of the hospital to make them feel comfortable. For example, some hospitals offer virtual tours of facilitites or free lectures from experts. Hospitals are also swapping out the stodgy ads of the past with more humorous spots. Some advertisements are forgoing shots of hospital equipment and doctors for clever slogans that highlight a particular hospital's specialty or client base. For example, a hospital in Florida that works with aging patients ran billboards that read "Your heirs can wait" and "Outlive your foursome."
The jump in marketing has come at a time when many hospitals are tightening their belts, closing facilities and laying off workers. As a result, some consumer protection organizations are criticizing hospitals for spending their money on advertising rather than patient care. However, hospitals counter that their advertisements are a "strategic investment" in the future of their institutions.