Association for Public Policy Analysis & Management

Over the last 7 years, hospitals have increased their presence on social media and crowd-sourcing quality rating sites, such as Facebook, Google and Yelp. In a recent consumer survey, 40% of people identified social media as a factor in their provider choice. By engaging with the public on these sites, hospitals raise their community profile and attempt to market themselves along a number of clinical and non-clinical quality measures. The extent to which these online profiles influence patient choice and outcomes is not well understood. Hospitals also attempt to influence patient choice through more traditional advertising. Such advertising may be one means to improve patient decision-making, but it also raises ethical concerns about the distortionary effects of advertising on individual patient expectations and overall patient volume. In this paper, we estimate the impact of hospital-initiated online content, consumer engagement with that content, and advertising investments on patient hospital choice. We ask whether these types of outreach lead patients to choose hospitals with better or worse quality along dimensions of both clinical and non-clinical quality.

This study draws on a unique dataset of hospital-initiated online Facebook content and consumer responses to that content. We apply algorithms of unsupervised learning of linguistic content to identify common topics. We then identify the topics that elicited the highest overall number of responses, as well as by sentiment. We then consider how hospital’s social media strategy, defined by the topics in their posts and public response, affect financial measures of performance from the Medicare Cost Reports. Finally, we consider how advertising strategy, including expenditures on television, print, and outdoor ads affect patient choice using discharge data.

The analysis focuses on the following research question: does social media engagement and advertising affect patient choice of hospitals? The findings of our study apply to broader policy debates as to how hospital advertising affects patient choice and hospital profits. To date, the majority of healthcare advertising literature has focused on pharmaceutical advertising. This study’s contributes to policy by examining how advertising in a credence good market, like hospital services, rather than experience goods, like medications, affect patient demand.