In The Wake Of Obamacare, A Tsunami of Health Care Marketing

Insiders are seeing an explosion of direct-to-consumer marketing as a consequence of the Affordable Care Act.

The Affordable Care Act is starting a lot of conversations. There are almost 48 million uninsured Americans who are newly-eligible for coverage. Simply educating people about their new options and obligations for enrollment in health care can take an estimated six to seven conversations per person. On top of that, various health-care providers will be competing for the business of newly-insured patients.

The need to communicate and compete is triggering a tsunami of advertising and marketing dollars from the health-care industry, states, and the federal government. Insurance companies alone are expected to spend an additional billion dollars this year to capture new customers. Josh Karmon, the VP of advertising at Vitals, a doctor ratings-and-reviews website that draws 12 million monthly visitors searching for specialists, is watching it happen to his business. "The growth in advertising that has happened not just in the pharmaceutical but also health-plan industry is staggering," he says.

Political Campaigning

The ad buys start with political groups. Groups opposed to Obamacare, including one funded by the Koch Brothers, have run five times as many TV ads about the Affordable Care Act as the federal government's own marketing push.

Plus, many states are seeing door-to-door campaigns combined with online outreach to enroll as many of the uninsured as possible before coverage starts January 1. Ads from these groups are expected to reach another billion this year.

Health-Care Providers

Potentially tens of millions more people who once skipped going to the doctor or used the emergency room for primary care will now be required to buy health insurance, which will pay for real doctor visits. And everybody is lining up for their new business. Insurers, regional hospitals, standalone urgent care centers, and walk-in clinics operated by companies like CVS, Target, Walgreens, and Walmart are all increasing their advertising spends, says Vitals' Karmon. "We've seen a 300% increase in hospital campaigns," he says.

Pharmaceutical companies

The United States and New Zealand are the only two countries that allow prescription drugs to be advertised directly to consumers for specific health problems. Up till now, pharma has been the biggest player in direct-to-consumer health advertising, despite some controversies (including a total of $5.5 billion paid out in fines last year for fradulent marketing).

Pharma's angle on the ACA, says Karmon, is promoting better compliance with drug regimens for "lifestyle conditions" like asthma and arthritis. "Pharma’s thrilled 'cause more people now have insurance and can pay their bills," he says. "Brand advertising is up 70% year-over-year in that category" for Vitals.

While certainly a bonanza for health-related publishers and portals like Vitals, will all these new ads help inform the public, or simply confuse people about their options and divert dollars from the business of care? At least in the insurance industry, there's a new mandate about the percentage of premiums—80%—that must be spent directly on making people healthy. Maybe that could be extended across the industry so we don't drown in marketing.

[Image: Flickr user Bradley Gordon]

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1 Comments

  • terry nugent

    Re pharma, one could argue that ads are part of making people healthy if the ad gets them to see the doctor.