After pulling back spending in recent years, some Connecticut hospitals are significantly increasing their advertising budgets as they try to compete for market share amid a changing and increasingly competitive health care environment.
Connecticut’s 30 acute care hospitals pumped nearly $30 million into advertising spending in fiscal year 2010, an 18 percent increase from a year earlier, a Hartford Business Journal analysis of industry financial data has found.
Hartford Hospital showcased the biggest ad budget, spending $2.9 million in fiscal 2010, a 38 percent increase from a year earlier, according to a regulatory filing issued to the state’s Office of Health Care Access.
Cross-town rival St. Francis Hospital and Medical Center spent $1.8 million on advertising, a year-over-year increase of 16 percent.
Danbury Hospital experienced the largest increase of 147 percent, spending $2.1 million, while John Dempsey Hospital, which has struggled financially in recent years, increased its advertising spending 88 percent to $1.8 million.
The larger ad budgets come as the state’s hospitals continue to grapple with slim operating margins but feel increased pressure to differentiate themselves from the competition, especially as consumers take more control over where they receive healthcare services, industry experts said.
“Hospital adverting has exploded and will continue to grow and evolve for the foreseeable future,” said Bill Field, president of Mintz & Hoke Communications Group in Avon.
With more individuals purchasing insurance on their own and/or paying more of their own health care costs, patients are taking a more active role in deciding where to get their health care, Field said.
It’s a trend that is expected to grow in the future, especially as federal health care reform affects more individuals.
That’s forcing hospitals to market services and outpatient treatments — particularly ones that are big revenue producers — that differentiate themselves from the competition in order to attract new patients and retain existing ones.
“Hospitals are communicating specific service segments, particularly ones where consumers have choice,” Field said. “There is a considerable fight for patient and doctor mind space. Hospitals need to build some brand equity.”
Hospital consolidation is also playing a role, said Bill Greer, the vice president of research and strategic planning at Glastonbury-based Cashman & Katz, an integrated marketing and communications firm. The larger health care systems created as a result of affiliations and mergers are allowing hospitals to offer more resources to patients.
Marketing that as a major selling point is becoming increasingly important, as well as showing that the individual hospitals will still be there to serve the community, Greer said.
“Having that corporate umbrella means hospitals have more efficiencies and production behind them,” Greer said. “In order to feed that corporate beast, it makes sense to market that competitive advantage to increase the patient load.”
In all, Connecticut hospitals spent $28.1 million in advertising in fiscal 2010, compared to $23 million a year earlier.
The sharp increase followed a year in which advertising fell off by 10 percent going from $26.3 million in 2008 to $23 million in 2009, OHCA data shows.
James Blazar, Hartford Healthcare’s senior vice president and chief strategy officer, said Hartford Hospital’s 2010 advertising budget of $2.8 million was likely overstated because some of the money was actually spent in 2009, but showed up in the 2010 billing cycle.
Blazar said a lot of that money goes into educational materials that provide patients information about clinical programs offered at the hospital like bariatric surgery, which has become an increasingly competitive business segment.
“The key to good advertising is giving consumers information that they need to make better choices,” Blazar said.
The goal is also to drive patients to the hospital’s web site and physicians, he added. Blazar said one of the biggest shifts he sees is more money being spent online and in direct marketing, rather than on traditional print publications.
In 2011, Hartford Healthcare, which is the parent organization of Hartford Hospital, unveiled a sweeping rebranding strategy that brought the dozen or so organizations affiliated with the medical behemoth under a single and new logo.
A lot of advertising focused on that shift, Blazar said.
Andrea Rynn, the director of public and government relations at Danbury Hospital, said that hospital’s 147 percent increase in ad spending was a result of a new branding campaign that included TV commercials shown in Connecticut and New York.
Because of the hospital’s unique position in Western Connecticut, it is forced to spend ad dollars in multiple markets in order to get the message out there, Rynn said.
Much of the media blitz was centered on marketing clinical services like the hospital’s weight loss center.
Since that time, however, Rynn said the hospital decreased ad spending in 2011, and could cut the ad budget even further in 2012.
Field, of Mintz & Hoke Communications Group, said most hospitals are still doing traditional communication through TV and radio, but forays into the digital side of advertising are starting to gain traction.
In particular, hospitals are using their websites more effectively by making them interactive.
“Traditionally hospital websites were talking at people,” Field said. “Now they are becoming far more inclusive so that patients see and feel the brand.”
