Could Commercial Ads Subsidize Your Medical Practice?

September 5, 2014

One EHR company is selling access to its subscribers to commercial companies through advertising. Could this business model apply to other areas of healthcare?

In consulting for one of my clients, I was introduced to the Practice Fusion EHR.  If you don’t already know, this online EHR is available for any provider to use free of charge.  This is a big deal, considering that most EHRs cost in the tens of thousands to implement, followed by a monthly licensing fee. What’s the catch? Only that the EHR is not completely customizable and there are small banner ads that appear on the bottom of the screen. 

For some, those minor inconveniences are a small price to pay for free software.  Like television and the Internet, Practice Fusion is selling access to its subscribers, or audience, and the more subscribers, the higher the cost of the access. This business model got me thinking: Could it apply to other areas in healthcare? Hypothetically, yes. 

Let’s take a look at the numbers:

According to the Nielsen Ratings, the popular sitcom, "The Big Bang Theory," brought in about 13.5 million viewers for live broadcasts of premiere episodes in 2014.  Advertisers paid an average of $320,000 per 30-second commercial spot during those episodes.  Through this example, companies are willing to pay $42,000 to access one million people, of a certain demographic, for 30 seconds. 

According to the CDC, there were a combined 256 million inpatient/outpatient/ER department visits throughout the United States in 2010.  Using the above ratio of $42,000 to 1 million people, the hospital industry could stand to make over $11 trillion per year if they sold access to their patients in the form of strategic commercials, targeted signage, free samples, e-mails, and sponsored literature, to various commercial companies.  Granted, these numbers could radically change based on any number of variables: demographics, repeat visits, media type, etc. But, even if you cut the numbers in half, $5.5 trillion is still a lot of money. 

Obviously, there would be many objections and concerns, the most glaring of which is that corporations might leverage their advertising dollars to control the course or direction of medicine in their favor. However, one could argue that is already the case. Big Pharma and commercial insurance carriers currently have a majority of the control over what research gets funded and which treatments are covered. 

We could take it a step further and engage the patient population in meaningful communication on products via surveys, etc.  The interactive style of new marketing via social media, the Web, etc., could easily be applied to help ensure a return on the advertiser’s investment.  There could be a number of tailored financial arrangements, but if we are asking patients to participate in, essentially, a focus group on goods and services as a part of their treatment, then deductibles, copays and co-insurances should be eliminated. 

Theoretically, this would lower the cost of healthcare via decreased insurance premiums.  There is nothing, however, to prevent healthcare providers and facilities from simply keeping the increased revenue or to force commercial insurance carriers to lower premiums.  On some level, if this pipe dream became a reality, legislation would need to be implemented to ensure that the new revenue stream would indeed translate to lower healthcare costs to the consumer.