Anyone for snake oil?

The Labour Government’s obsession with demonstrating its free market credentials reaches new levels this week.

As the National Health Service introduces Patient Choice – where patients can choose between four hospitals for treatment – the Department of Health is about to publish its marketing code that will permit hospitals to advertise their services.

That’s right. NHS hospitals will actually advertise to sick people telling them to check in to a named institution rather than its competitors. As any ad expert will tell you, hospital advertising will only superficially concern the rational promotion of superior medical services. In reality, it will play on the fears of the ill and sell them advertising’s greatest commodity – hope.

In this sense, advertising is going back to its roots. In the 19th century, the patent medicine men planted the seeds of the modern advertising system through massive media promotion of exclusive wonder cures and treatments. Their heavy spending was instrumental in creating modern newspapers. Such marketing practices were stamped out in the early 20th century, and advertising of wonder drugs has had a bad name ever since. That’s why only medications for minor ailments have permission to advertise. Medical advertising has become synonymous with manipulating the fears of people when they are at their most vulnerable.

In a week when figures show hospital-contracted infection Clostridium difficile has soared to new heights – it was associated with nearly 7,000 deaths in 2005 – those same hospitals are being encouraged to blow hundreds of thousands of pounds on advertising their services.

Will the worst hit hospitals be forced to reveal infection rates in their advertising? Will there be a “health warning” of the sort that features in financial services advertising? “Your health can get worse as well as better in this hospital.” We will have to wait for the imminent publication of the NHS Promotion code to find out.

Some believe that most hospital marketing will be targeted at doctors so they recommend hospitals to patients. In what sense, pray, is that patient choice?

Meanwhile, free market headbangers at environment ministry Defra are working on an even more bizarre plan. They have launched yet another review into how competition can be introduced for tap water. Under this scenario, people would choose their water supplier in the same way they choose their gas and electricity provider. Perhaps you could have one supplier for the hot tap and another for cold.

Water industry insiders say consumer competition for water supply is unlikely to come to fruition. It has been examined many times but no-one has worked out a way of making it work. The infrastructure needed to set up such a system, for instance building a national water grid, would be so costly as to vastly outstrip any benefits. Price differentials between water suppliers across the nation are fairly small so there would be few savings on offer. But we should not underestimate the determination of Labour to attach its name to the ideology of free market competition. If a way can be found of introducing competition into tap water, they will consider it. They’d privatise the air we breathe if they could.

So what does all this mean for marketers? In the case of hospital advertising, it is creating marketing roles in hospital trusts across the country. However, such jobs seem unlikely to be attractive to high-flying marketers looking for salaries upwards of £100,000. Hospital marketing directors are unlikely to earn much more than £50,000 – £60,000.

Competition in gas and electricity supply has created many marketing jobs and has heavily increased advertising spending. But Labour is struggling to find any other areas where competitive markets can be constructed. The de-regulation of financial services, energy supply, telecoms and gambling has boosted marketing. But it is hard to think of any other areas that can credibly be opened up for greater consumer competition and the marketing that would entail.

Gordon Brown’s government urgently needs to demonstrate its business-friendly credentials after a backlash from the City over nationalising Northern Rock and tax increases for entrepreneurs and wealthy foreigners living in the UK. But hospital advertising and tap water competition are scraping the barrel.