There is a 64 percent increase in annual advertising expenditures after a hospital data breach.
This image has been resized. Courtesy of DARPA.
Hospitals that experience a data breach spend more money on advertising expenditures than hospitals that have not been breached, according to a study published on our sister site, The American Journal of Managed Care.
Researchers Sung J. Choi, Ph.D., and M. Eric Johnson, Ph.D., studied the relationship between hospital advertising expenditures and data breaches and found that data breaches were associated with a 64 percent increase in annual advertising expenditure. Breached hospitals were large, teaching and urban compared to the control group.
Hospitals that experienced a breach spent approximately $817,200 on advertising expenditures in the year of the breach. Comparatively, the control group spent close to $578,100.
Over two years, the breached hospitals’ advertising expenditures were 79 percent higher than hospitals that did not experience a data breach. Hospitals that experienced a data breach spent approximately $1.75 million over the course of two years, compared to almost $1.13 million from the other hospitals.
The team gathered data on breaches from the U.S. Department of Health and Human Services (HHS) and the Privacy Rights Clearinghouse. Only data breaches that affected more than 500 individuals were included in the study because breaches smaller than that are not published in the HHS database. The team studied hospitals that were non-federal acute care inpatient facilities from 2011 to 2014.
Voicetrak, a company that produces local advertisement spending reports, provided data on hospital advertising expenditures based on surveys taken by media outlets.
Due to managed care and market-based reforms, hospitals are competing for patients, and they are using advertising to market services and communicate information directly with patients.
If a hospital is breached, it needs to repair its image and minimize patient loss, which it does through marketing campaigns.
In 2014, the hospital industry spent $2.3 billion on advertising, a 38 percent increase from 2011. But with better data security, advertising costs to the healthcare system could decrease.
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