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HMO Penetration, Ownership Status, and the Rise of Hospital Advertising


  • Jason R. Barro
  • Michael Chu


We examine the recent increase in hospital advertising expenditures. We first illustrate that the rise in hospital advertising has not been universal. Large, not-for-profit, teaching hospitals have, by far, experienced the largest increase in spending. Adjusting for size, for-profit hospitals over this period have actually decreased their marketing expenses. This increase in advertising spending is best explained by managed care penetration. There is a small and marginally significant relationship between increases in for-profit presence in hospital markets and an increase in advertising spending by the not-for-profit hospitals in those markets.

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  • Jason R. Barro & Michael Chu, 2002. "HMO Penetration, Ownership Status, and the Rise of Hospital Advertising," NBER Working Papers 8899, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:8899
    Note: HC

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    References listed on IDEAS

    1. Joel Waldfogel & Jeffrey Milyo, 1999. "The Effect of Price Advertising on Prices: Evidence in the Wake of 44 Liquormart," American Economic Review, American Economic Association, vol. 89(5), pages 1081-1096, December.
    2. Rizzo, John A & Zeckhauser, Richard J, 1990. "Advertising and Entry: The Case of Physician Services," Journal of Political Economy, University of Chicago Press, vol. 98(3), pages 476-500, June.
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    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise

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