TY - JOUR
T1 - Advertising expenditures in the nursing home sector
T2 - Evaluating the need for and purpose of advertising
AU - Kash, Bita A.
PY - 2008
Y1 - 2008
N2 - Marketing and advertising activities in the nursing home sector have increased in recent years, following the example of hospitals and health systems. The reasons for this trend may be related to the growth in competition but are not clearly identified yet. Theoretically, advertising becomes necessary to gain an advantage over the competition. The purpose of this study was to identify the reasons for the variation in advertising expenditures among nursing homes in Texas. For this study, we merged 2003 data from the Texas Medicaid Nursing Facility Cost Report, the Texas Nursing Home Quality Reporting System, and the Area Resource File for Texas. Using the Herfindahl-Hirschman Index, we then examined the correlations between advertising expenses and the level of market concentration. We evaluated the association between advertising expenditures and market competition using two logistic and four linear regression models. Total advertising expenses in Texas nursing homes ranged from $0 to $165,000 per year. Higher advertising expenditures were associated with larger facilities, higher occupancy, and high Medicare census. Market competition, however, was not a significant predictor of such expenses. Advertising seems to be more resource-driven than market-driven. Therefore, some advertising expenditures may be unnecessary, may lack impact, and may even be wasteful. Reducing unnecessary advertising costs could free up resources, which may be allocated to necessary resident care activities.
AB - Marketing and advertising activities in the nursing home sector have increased in recent years, following the example of hospitals and health systems. The reasons for this trend may be related to the growth in competition but are not clearly identified yet. Theoretically, advertising becomes necessary to gain an advantage over the competition. The purpose of this study was to identify the reasons for the variation in advertising expenditures among nursing homes in Texas. For this study, we merged 2003 data from the Texas Medicaid Nursing Facility Cost Report, the Texas Nursing Home Quality Reporting System, and the Area Resource File for Texas. Using the Herfindahl-Hirschman Index, we then examined the correlations between advertising expenses and the level of market concentration. We evaluated the association between advertising expenditures and market competition using two logistic and four linear regression models. Total advertising expenses in Texas nursing homes ranged from $0 to $165,000 per year. Higher advertising expenditures were associated with larger facilities, higher occupancy, and high Medicare census. Market competition, however, was not a significant predictor of such expenses. Advertising seems to be more resource-driven than market-driven. Therefore, some advertising expenditures may be unnecessary, may lack impact, and may even be wasteful. Reducing unnecessary advertising costs could free up resources, which may be allocated to necessary resident care activities.
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U2 - 10.1097/00115514-200807000-00006
DO - 10.1097/00115514-200807000-00006
M3 - Article
C2 - 18720686
AN - SCOPUS:48249095937
SN - 1096-9012
VL - 53
SP - 242
EP - 255
JO - Journal of Healthcare Management
JF - Journal of Healthcare Management
IS - 4
ER -