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Marketing and education have been used by corporate health care companies to build the bottom line. They have misinformed, deceived and even restricted information. Instead of facilitating and encouraging choice they have restricted it.

Advertising and Health Care

Advertising has traditionally been regarded as unethical by the medical profession. The profession felt that the public were so disempowered by their lack of knowledge and their vulnerability when ill that they could easily be exploited and misused by quacks. Society and governments accepted this. Professional codes of behaviour have strictly limited advertising to providing basic factual information without making any claims.

This attitude is now considered paternalistic and these restrictions anticompetitive. National competition policy has prohibited them. The USA was the first to do so and there is a longer history to examine. What has happened is revealing.

Marketing is integral to marketplace practices. US health care multinationals find that they cannot prosecute their business interests in countries which still have restrictions on advertising. They are one of the "obstructions" to legitimate business which the US government is asking the World Trade Organisation to "liberalise" in international trade agreements.

Corporate Marketing

Marketing has been the most important tool used by corporate giants in the conduct of their businesses. Both Tenet/NME and Columbia/HCA considered it their most important activity.

Marketing, education and choice are intimately linked and any discussion of one must lead to the others as marketing and education are both intended to influence the choices people make.

Marketing in the different sectors

 The Specialty Scandal

Making a Profit:- In the specialty hospitals in the USA in the late 1980's vast profits could be made, particularly from psychiatry. The objectives were to admit as many patients as possible, keep them there for the duration of their insurance and provide as much treatment paid as item of service as could possibly be fitted into 24 hours. A "programmatic" system of care was designed to accomplish these objectives once the patient was admitted to hospital. Doctors were generously rewarded for putting their patients into these programs. Supplying accurate information and making informed choices was not on the corporate agenda.

Admissions:- The prime objective was to persuade patients to admit themselves to hospital and then convince them that they needed to stay there. Adults were insured for 1 months hospital treatment. Children were insured for 6 months and with a potential US $500 to US $1000 of treatment each day they represented a gold mine. Anxious parents could easily be persuaded that their rebellious children were seriously ill. In practice very few children require hospital admission for psychiatric care and most are harmed by the experience. Thousands of children were kept in hospital for many months and Tenet/NME ultimately paid those it harmed US $135 million.

Advertising:- Television and newspaper advertisements described almost every possible psychiatric emergency and told of the early signs of many other disorders. People were urged to come for a free assessment or bring their children. Doing badly at school work was a sure sign of trouble. Anyone feeling stressed was urged to phone a hot line for help.

The purpose of those who manned the phones and did the assessments was to persuade people to admit themselves to hospital for a short assessment. They were allocated to a compliant doctor. Once admitted others took over to persuade the patient that they were seriously ill and needed a full course of treatment. To keep patients in hospital for the duration of their treatment they were misinformed and even restrained. They were incorrectly told that if they discharged themselves then their insurers would not pay. They would have to pay the full costs of their care themselves. Tenet/NME employed staff specifically to ensure that patients were kept in hospital for the duration of their insurance.

Bounty hunters paid for each head on a bed were sent into the community, particularly to self help groups like Alcoholics Anonymous and Divorced Women to persuade these people that they were ill and needed admission. Schools were targeted for marketing. Marketing and bounty hunting flourished in Canada and this scam netted large sums by flying unsuspecting patients to the USA. The Canadian government eventually stopped paying.

Tenet/NME stressed that the most important task of every employee was to market the company. They called this an "intake culture". Staff were urged to phone contacts daily to promote the company's facilities, arrange guided tours, promote company education programs etc.

Charter Hospitals went even further. They ran a high profile marketing competition. All staff were awarded points for marketing activities. The first prize was a Carribean cruise.

Education:- Corporate doctors were supported by the company. The company arranged meetings where they were billed as speakers and sent them on a speaking circuit promoting them as authorities. Community seminars were held, supposedly to educate the public about psychiatric illness, particularly in children. Books were published and the intention of these was simply to generate anxiety and increase admissions. They were marketed to hospitals to sell on to the public as "books as hooks", guaranteed to increase admissions. A book "Cocaine 800" by a doctor in New Jersey and Florida promoted a substance abuse hot line. The purpose of the hot line was to secure admissions to two extensively advertised substance abuse hospitals in New Jersey and Florida.

The proceedings of a meeting of Tenet/NME staff where the various marketing and educational projects were enthusiastically presented is revealing. The only item evaluated was not the benefit to the patients or the community, but the number of admissions generated by these supposedly humanitarian education programs. The words of a corporate video about securing admissions are particularly disturbing because of the market emphasis on admitting children.

To promote the corporate image affiliations were established with universities and large donations were made.


Columbia/HCA was particularly aggressive in its marketing. It spent in the region of US $100 million annually on marketing

HCA which merged with Columbia to form Columbia/HCA was involved in the psychiatric scandal and I have misleading 1993 television advertisements from its psychiatric hospitals.

I do not have information about how Columbia/HCA marketed its services but I am aware that it aggressively attacked competitors, particularly not for profit hospitals which provided a better service to the community. It even put up bill boards outside competitors hospitals asking in large letters "Why Stop Here".

By securing market dominance and control of the medical profession it effectively limited choice for patients. Patients attending a Columbia/HCA hospital who required more specialised care would be sent long distances to a Columbia/HCA hospital and not be given the choice of a nearby hospital providing this care if it were run by a competitor.

Columbia/HCA renamed all of their hospitals with the Columbia name and then embarked on an aggressive branding campaign to build their credibility. This was rapidly abandoned in 1997 when the name Columbia/HCA was tarnished by FBI raids and the investigation of a massive fraud.

Columbia/HCA's integrated systems and its relationships with doctors was used to limit choice and channel patients from its hospitals to its after care facilities.

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Aged Care

All of the aged care corporations marketed their services extensively. The court documents I have seen against Sun Healthcare are probably representative of those against nursing homes across the USA. They describe the way in which Sun Healthcare marketed the high quality of its care in the media and also in the brochures which it supplied to relatives. The administrators who spoke to families and spent time taking them around the facilities also promised extensive care and services. As is now revealed the company had no intention of providing the staff needed to meet their undertakings.

Managed Care

Managed care is different. To save money it limits choice, denies care and restricts services. It gets more profit by not providing the care paid for by its customers. It does not advertise these practices to employers who cover employees expenses, or in its marketing to the public.

Managed care has sought to restrict the information given to patients. HMO's are alleged to have been less than direct in the way they informed their patients about their rights and entitlements, particularly elderly medicare patients.

HMO's have forbidden doctors to supply information to patients which was not in the HMO's interests. Government were forced to legislate to stop this practice.

Selection of patients is prohibited by law but HMO's are accused of cherry picking by the way they supply information to those making inquiries. They advertise in venues like fitness clubs and they even run these. These patients are healthy and less likely to need costly care. They avoid venues frequented by smokers or alcoholics, people at risk of costly illness who most needed cover.

Kaiser marketed an independent arbitration process when in fact the process was run by the corporation and acted in Kaiser's interests when making decisions.

Influencing Public Perceptions

Health care corporations spend vast sums on political donations, lobbying and public marketing in order to influence the political process. The industry representative bodies are well funded and take on this task. The demise of Clinton's Health Care plan is considered to be the direct result of a clever advertisement which caught the public's imagination. Almost every attempt to legislate for patients has been met with costly and often successful health care advertising. A scare campaign is being run targeting the current bill of rights for patients, claiming that allowing patients to sue HMO's for denial of care will markedly increase costs. Nursing home chains have run a massive campaign claiming that medicare legislation has crippled them and this is why care is being compromised. Community groups claim that the only thing which has had any impact on poor care in corporate nursing homes is litigation. A massive marketing campaign supports an attempt to get legislation passed which will protect nursing home chains from litigation by the families of those who have been neglected.

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This page created April 2000 by Michael Wynne