Advertising and Hospital Referrals

Dynamic change characterizes the American health care environment in the 1990s (Hammonds, 1994, pp. 48-57). The changes in the health care environment result from a combination of factors increasing costs of health care, changing societal values, advances in treatment therapies, technological innovation, changing demographics, and many others (Nichols & Stevens, 1992, pp. 86-95). Cost is a major factor involved in changes in the delivery of health care delivery services.

According to some observers, the United States health care system is "in crisis", with many of the problems directly related to the cost of care (Congressional Budget Office, 1995, p. 4). For many years, health care has been a growing component in the federal budget. The Medicare and Medicaid programs are now major elements in federal and state expenditures. In addition, a number of public and private organizations have been created to monitor the quality of health care, to plan the allocation of health resources, and to foster efficiency in the provision of health care. The increasing costs associated with health care also are major concerns of private industry in the United States, which funds in part health care for tens of millions of Americans.

Hospitals frequently take the brunt of efforts to reform the health care system. In response, hospitals across the country are seeking to develop new strategies and tactics that will allow the institutions to remain viable ent

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oughout the organization" (Wrenn, La Tour, & Calder, 1994, p. 341). One of the clearest evidences that a strong marketing orientation operates within an organization is the pervasiveness of a marketing philosophy throughout line management. Obtaining such a diffusion of marketing thinking among line management is not a problem with many product-producing organizations because in such organizations marketing is a line management function and a marketing orientation is the dominant and pervasive management philosophy. Marketing is neither a line management function nor has management been either a dominant or pervasive management philosophy in most hospitals. Hospital administrators are struggling to determine the role and proper position for marketing and marketers within their organizations (Wrenn, La Tour, & Calder, 1994, p. 341). A recent study found that administrators and their chief marketing officers hold differing perceptions of the role and use of marketing by hospitals. Some of the reluctance of hospital administrators to believe in the desirability of a marketing orientation for their hospital might be the result of misunderstanding what it means to be marketing oriented and the lack of evidence demonstrating the

Category: Medical - A