The FCCA has been studying how health service marketing is currently regulated and what kinds of challenges the health and social services reform is setting for health service marketing. Health service marketing affects both customers’ freedom of choice and competition between service providers. The key is not restricting competition too much and harmonising the regulation and oversight of marketing by private, public and third-sector service providers.
As a result of the health and social services reform and the associated freedom of choice, customers will have more freedom to choose their health service provider in the future. When private, public and third-sector service providers need to compete for customers, marketing will become one of the most important ways to stand out from competitors.
Customers choosing their health service provider need comprehensive, easily understandable and comparable information about the quality, scope and availability of the services of different providers and about other users’ experiences. Information communicated about health services does not necessary satisfy all customers’ needs or it does not reach them, and marketing can be used to bridge any gaps. Marketing also promotes customers’ freedom of choice and competition by giving customers better opportunities to get the information they need and make choices that suit them.
There are no special regulations on health service marketing, and instead it is governed by the marketing provisions of the Consumer Protection Act. Marketing is also steered by the industry’s self-regulation guidelines. Legislation and regulations clearly determine the information that needs to be provided to customers. The challenge lies in what kinds of marketing techniques service providers will begin to use in practice as a result of the health and social services reform.
Harmonised regulation of public, private and third-sector service providers
The FCCA’s report emphasises that the regulation of health services must not be too detailed. Excessively strict regulation limits service providers’ possibilities to employ different kinds of competitive techniques and has a negative impact on new providers’ entry into the market. Excessive regulation also makes it more difficult for consumers to get information about the services they need.
The problem with the current regulation of health service marketing is that it treats public, private and third-sector service providers differently. Only private operators are regulated. There are no rules or supervisory authorities for the marketing of services provided by public entities. Public services can therefore be marketed in ways that are not allowed for private service providers.
The situation could be resolved by also applying the marketing provisions of consumer protection legislation to marketing by public and third-sector service providers. This would reduce the need to introduce new regulations for the marketing of services provided by the public sector and the third sector, which are important for consumers’ freedom of choice. The FCCA also called attention to the same issue in a report published in 2016 on the opportunities and prerequisites of competition in social welfare and health care services and in an opinion issued in December 2017 on the freedom of choice bill.
Further information:
- Helena Tuorila, Senior Research Officer, tel. +358 29 505 3653