Journal of Marketing Special Issue: Marketing in the Health Care Sector

Editorial: Christine Moorman, Harald J. van Heerde, C. Page Moreau, and Robert W. Palmatier, “Marketing in the Health Care Sector: Disrupted Exchanges and New Research Directions”

Health care is vital to our interconnected world, and society benefits from its successes and is challenged by its failings. Disruptions on both the demand and supply sides are impacting the creation, provision, and consumption of health care in fundamental ways. However, the role of marketing in this dynamic health care industry remains only partially understood and is often frozen in a very conventional set of business-to-business (e.g., detailing or advertising to doctors) and business-to-consumer (e.g., direct-to-consumer advertising) strategies. While important, the Special Issue editors argue that this view ignores the new actors, roles, and exchanges—the flows of value, information, influence, resources, and rivalry between actors—that are occurring in these disrupted health care exchanges. With this Journal of Marketing Special Issue on “Marketing in the Health Care Sector,” the editors introduce a set of articles that offer novel contributions regarding marketing’s role, and they offer a research agenda outlining more opportunities for marketing scholars to examine and understand how these disrupted exchanges are improving health, empowering choice, and fostering competition.

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Benedict G.C. Dellaert, Eric J. Johnson, Shannon Duncan, and Tom Baker, “Choice Architecture for Healthier Insurance Decisions: Ordering and Partitioning Together Can Improve Consumer Choice”

Making good health insurance decisions is important for health outcomes and longevity, but consumers’ errors are well documented. The authors examine whether targeted choice architecture interventions can reduce these mistakes. The article examines the interaction of two choice architecture tools on improved consumer insurance decisions in online health care exchanges: (1) ordering the options from best to worst based on a high-quality user model and (2) partitioning the total set of options. Although ordering and partitioning do not always improve choices separately, the authors use one field study and three experiments to identify the conditions that allow the combination to greatly improve health insurance decisions.

Findings indicate that when options are ordered such that the best options appear at the beginning of the presented list, partitioning nudges consumers to focus on the best options. However, if the best options are not at the top of the list, partitioning discourages search and can impair consumers’ discovery of the best options. Process data show that these effects are achieved by focusing consumers’ limited attention on higher-quality options. These results suggest that wise choice architecture interventions need to consider the joint effect of choice architecture tools as well as the quality of the firm’s user model.

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J. Jason Bell, Sanghak Lee, and Thomas S. Gruca, “Bringing the Doctor to the Patients: Cardiology Outreach to Rural Areas”

Clinical outreach is a crucial but understudied health care service delivery model. Physicians staffing rural outreach clinics must allocate a limited resource (i.e., their time) between caring for patients at their main sites and outreach locations. Using a unique 30-year data set of decisions made by cardiologists, the authors estimate a constrained utility maximization model of time allocations across home and outreach locations. The results show that travel distance, potential competition, and patient demand for cardiology services significantly influence allocation decisions. This structural model is used to simulate the impact of a predicted reduction in cardiologist supply. The expected impacts are unevenly distributed, with some rural locations experiencing large decreases in access.

The authors evaluate two policies to restore rural access: targeted immigration and a subsidy program. A subsidy program with an estimated annual cost of $406,000 can restore outreach after a 10% reduction in cardiologist supply. This option should be preferred to recruiting and supporting five additional cardiologists under a targeted immigration strategy. This research demonstrates the value of marketing modeling in addressing limited access to health care services and evaluating alternative policies for maintaining access in the face of coming physician shortages.

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Sarang Sunder and Sriram Thirumalai, “Hospital Portfolio Strategy and Patient Choice”

Specialize? Diversify? Do patients care? The authors investigate the demand-side effects of a hospital’s portfolio strategy, which entails decisions about the depth and breadth of its service offerings. Positing that both depth (focus) and breadth (related focus) signal expertise, the authors use both archival and experimental evidence to examine these effects. The archival study is based on Florida’s State Inpatient Databases for 2006–2015 and spans all major departments in health care delivery. The empirical analysis exploits plausible exogenous variation from other health care markets and reveals that patient choice is positively influenced by a hospital’s depth (focus) and breadth (related focus) of expertise in a department.

Complementing the archival evidence, the authors also conducted online experiments to examine the signaling effects of hospital portfolio strategy on patient choice behavior. The results provide support for the idea that hospital portfolio strategy influences patients’ perceptions of hospital expertise in focal and related areas and, subsequently, their choice behavior. The authors also highlight potential synergistic effects between focus and related focus and heterogeneity in the effects across departments, payer types, and hospital profit status. These findings underscore the need for managers to adopt a targeted approach to portfolio decisions in health care.

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Yiwei Chen and Stephanie Lee, “User-Generated Physician Ratings and Their Effects on Patients’ Physician Choices: Evidence from Yelp”

Patients increasingly rely on online physician ratings to select their physicians and make health care decisions. However, it is unclear whether online physician ratings signal physician quality information and affect patients’ physician choices. By combining physician rating data from Yelp with data from Medicare, which covers a large elderly patient group, the authors find that ratings are positively associated with important measures of physician quality, including physicians’ credentials, adherence to clinical guidelines, and patients’ health outcomes. They introduce novel instrumental variables, where reviewers’ leniency in rating other businesses is employed as an instrument for physicians’ ratings. They find that an increase in physicians’ average rating increases physicians’ patient flow.

To understand the quality signals that patients respond to, the authors also use the latent Dirichlet allocation model and extract topics from review texts. Patients respond differentially to different information and respond most to information about physicians’ interpersonal and clinical skills. In addition, rating credibility, accessibility, and strength of other existent signals moderate the positive effects of online ratings on patient flow. Overall, online physician rating platforms can promote efficiency by disseminating important quality information to patients and directing patients to higher-quality physicians. 

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Tae Jung Yoon and TI Tongil Kim, “The Role of Advertising in High-Tech Medical Procedures: Evidence from Robotic Surgeries”

Hospital advertising has grown more than five-fold in the past two decades. However, unlike detailing and advertising for prescription drugs, the topic of hospital advertising has been understudied. This research introduces a customer-centric view to this market by investigating the role of advertising in patients’ choice of high-tech medical procedures, with a focus on robotic surgery. The authors analyze approximately 140,000 individual patient records and television advertising data from Florida during 2011–2015 to investigate how hospital advertising of robotic surgery affects patients’ choice of robotic surgery over more conventional laparoscopic and open surgeries.

Using a variation of a designated market area border identification strategy, the authors find that this advertising leads to more robotic surgery choices. The advertising effect is especially strong for Medicaid patients, whose socioeconomic status tends to be lower. While robotic surgery is associated with a short-term health benefit (i.e., reduced length of hospital stay), it does not affect long-term health benefits and comes at a higher cost than other forms of surgery. Thus, understanding the effect of advertising robotic surgery has significant health, cost, and marketing implications for different stakeholders in the health care industry, such as patients, health care providers, surgical robot manufacturers, insurance providers, and policy makers.

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Demetrios Vakratsas and Wei-Lin Wang, “Scientific Evidence Production and Specialty Drug Diffusion”

Specialty drugs treat complex, severe diseases and offer significant therapeutic advances. Despite their potential to transform patient care, little is known about the drivers of their diffusion. In this study, the authors develop a framework for the diffusion of specialty drugs that is motivated by the drugs’ novelty, complexity, and importance, with a focus on the role of scientific evidence production. They propose that the effects of scientific evidence on specialty drug diffusion are multifaceted and generated through the three stages of the scientific evidence production process: unpublished clinical studies, publications in medical journals not cited in clinical guidelines, and clinical guidelines.

The findings from the empirical analysis of two specialty drugs validate the framework, supporting the idea of multistage scientific evidence effects. In contrast, marketing activities do not have a significant effect. Although this could be attributed to specialty drug prescribers discounting information from commercial sources, it may also be due to limited marketing support. An additional analysis on a nonspecialty drug further validates the proposed framework. Calculations of scientific evidence contributions to trial prescriptions indicate that scientific evidence production can generate returns beyond the publication stage, which should provide specialty drug manufacturers with strong incentives to commit to quality and innovation.

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Reece George, Steven D’Alessandro, Mehmet Ibrahim Mehmet, Mona Nikidehaghani, Michelle M. Evans, Gaurangi Laud, and Deirdre Tedmanson, “On the Path to Decolonizing Health Care Services: The Role of Marketing”

Despite considerable investment, health outcomes for First Nations people are well below those of the rest of the population in several countries, including Canada, the United States, and Australia. In this article, the authors draw on actor-network theory and the case of Birthing on Country, a successful policy initiative led by First Nations Australians, to explore the decolonization of health services.

Using publicly available archival data and the theoretical guidance of actor-network theory, the analysis offers insight into how marketing techniques and technologies can be deployed to achieve improved health outcomes and implement decolonized approaches. The insights provided have theoretical implications for marketing scholarship, social implications for understanding and implementing an agenda of decolonization, and practical implications for health care marketing.

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Manuel Hermosilla and Andrew T. Ching, “Does Bad Medical News Reduce Preferences for Generic Drugs?”

Policy makers and insurers promote the use of generic drugs because they can deliver large savings without sacrificing quality. But these efforts meet resistance from the public, who perceive generic drugs as inferior substitutes for brand name counterparts. Building on literature showing that negative emotions reduce risk-taking, the authors hypothesize that receiving bad medical news (i.e., negative information about one’s health) prompts patients to favor brand name over generic drugs as means to safeguard their health. The evidence exploits low-density lipoprotein cholesterol test results, where a discontinuity from clinical guidelines enables the authors to estimate the causal effect of bad medical news.

Using data covering patients’ prescription drug choices across drug classes, the authors find that patients receiving bad medical news become 8% more likely to choose the brand name alternative. The findings are reinforced by a secondary analysis incorporating the similar context of hemoglobin A1c (blood sugar) testing. The authors also find that bad medical news reduces preferences for generics most strongly among drugs of direct clinical relevance for each test, but the effect also manifests among non–clinically relevant drugs.

Special Issue Editors

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