Will allowing NHS providers to advertise prove a distraction?

New rules are being introduced this spring allowing National Health Service providers to advertise their services.

From April, hospitals, NHS Trusts and clinics will be permitted to target the public with marketing campaigns as they compete under the Patient Choice agenda. This allows patients to choose where they are treated from a list of four hospitals.

The Department of Health is poised to publish a set of marketing guidelines drawn up in conjunction with the Advertising Standards Authority (ASA) setting o ut what will be permitted in hospital ads (MW last week).

Self regulation

It will be based on a draft NHS promotional code, already in the public domain.This lays out a system of self regulation for hospital promotion similar to that operated by the ASA. A secretariat, overseen by an expert panel, will rule on complaints made bout hospitals’ marketing claims.

The system will be self-financing, paid for by participants and organisations that have complaints upheld against them and those making unsuccessful complaints.

The draft code says the NHS brand and reputation must not be damaged in advertising and that trusts must ensure “expenditure of public money on promotional activity is not excessive”. It adds that the cost of television or cinema promotion is “very unlikely to be justifiable”.

In a controversial move, the draft code permits comparative advertising between hospitals. This could lead to trusts running campaigns targeting under-performing rivals, though they will not be allowed to “denigrate” them.

However, there is no requirement for hospital marketing to carry “health warnings” stating that the ad does not guarantee treatment levels, similar to the “wealth warnings” in financial services advertising.

Patient choice has significantly enhanced the position of marketers in the NHS, leading to the creation of marketing jobs in many of the country’s NHS Trusts. Total advertising budgets could be worth several million pounds.

Meanwhile, in a separate de-regulatory move which may also lead to a boost for marketing, environment ministry Defra has launched an enquiry into the introduction of competition in domestic water supply. This would mirror the introduction of competition between gas and electricity suppliers in the Nineties. A review by water regulator Ofwat in 2002 concluded domestic water competition was impractical.

But Southern Water, which was hit last month with a £20m fine for misreporting data and poor customer service under previous management, says: “Our forward planning assumes that competition will be extended to the domestic market. We will support the development of competition where it is shown to be in the best long-term interests of customers. We will meet the competition head-on by delivering top-quality service and excellent value.”

Technical difficulties

However, Mike Moran, managing partner of the Orchard Consultancy and a former Thames Water global marketing chief, doubts that it would be possible or worthwhile to introduce domestic water competition, as the technical difficulties would be too hard to surmount.

He adds: “Whereas the difference between the highest and lowest bills of different energy suppliers runs into hundreds of pounds, in water the figure is just a few pounds.”

He believes that marketing hospitals is a distraction from the major problems facing the health service and says top-level marketers are unlikely to be attracted to the National Health Service as they would only earn up to £60,000, compared to over £100,000 in the private sector.

Over the past decade, competition in sectors which were previously state monopolies, such as gas,electricity and telecoms, has helped create thousands of marketing jobs and led to booming advertising budgets. It may be that the principles of patient choice could be introduced into other public services.

But the NHS and the water industry look likely to be the last two regulated sectors where introducing competition – and creating vast new marketing sectors – is feasible.

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