Hospital Advertising

• DOI: 10.2139/ssrn.2805722
• Publication Date: 2016-07-13T12:19:45Z
• Authors: Tongil "TI" Kim
• Keywords: 0502 economics and business; 05 social sciences; 3. Good health

Does hospital advertising influence patient choice and health outcomes? We examine more than 220,000 individual patient-level visits over 24 months in Massachusetts to answer this question. find that patients are positively influenced by advertising; seeing a television advertisement for given makes likely select hospital. also observe significant heterogeneity response depending on insurance status, medical conditions, demographic factors like age, gender, race. For example, with restrictive forms of less sensitive advertisements. Our demand model allows us study the impact ban advertising, which has been recently considered policy makers. banning can hurt outcomes through increased readmissions. This is because advertisements drive higher quality hospitals, tend advertise have lower readmission rates. However, we do not change overall mortality rate.