Obamacare Turns Hospitals Into Insurers, and Insurers Into Healthcare Providers

Brand messages have flip-flopped

An elderly woman looks around her home fondly as she sings “There’s no place like home” in an advertising message for a service that helps senior citizens live a happy, healthy life in the place they love best—rather than a nursing home.

But the commercial, which was created by the agency DeVito/Verdi, isn’t promoting a medical facility. Rather, it's for the Massachusetts insurance company Fallon Health.

Fallon is one of several insurance companies that have crossed over into providing healthcare services. And in a reverse trend, some hospitals are starting to offer insurance. These border crossings are changing both the tone of messages and expanding ad budgets.

The hospitals offering insurance tend to be smaller, said Ellen Carney, principal analyst of insurance e-business and channel strategy at Forrester Research. Among them is the Steward Health Care System chain of 11 hospitals in Massachusetts, which has a partnership with the Tufts Health Plan. Another is North Shore-LIJ on Long Island, N.Y., which is in partnership with Aetna on an insurance program, Carney says.

“The healthcare industry is evolving rapidly. It’s moving from a segmented one—where there were providers and there were payers—to one in which single companies are looking to do more, if not everything, involved in healthcare,” said Christine Cassidy, Fallon Health’s chief communications officer. To get the word out about Fallon’s various services, the company launched its latest campaign with four TV ads. Typically, it’s run one or two commercials in the past. And the budget has increased accordingly.

The trend, which was stimulated by the Affordable Care Act, has spurred a major change in the messages both types of businesses convey. Insurance messages are now much more warm and friendly, whereas some hospital ads are leaning toward a more corporate tone. In both cases, the new sensibility is the exact opposite of what their messages conveyed in the past, observers said.

“Insurance used to be a b-to-b sell: a company offered insurance; you had one carrier,” recalled Allen Adamson, managing director of Landor Associates. Today, consumers can buy their own insurance and be more autonomous. Insurance companies have to engage consumers and brand for the first time, he added.

With all the change, it's little wonder that ad spend for insurance and health care climbed 50 percent between 2009 ad 2013, according to Kantar Media data. Those figures are cited by Dave Lockwood, group director of strategic planning at Lowe Campbell Ewald, which represents another insurance company that provides health services, Kaiser Permanente. However, he noted that the tracking service’s categories are broadly grouped (hospitals, clinics and medical centers; medical and dental insurance).

“Brands on both sides of the fence are communicating at a higher level, and much more effectively,” Lockwood said.