Paul Levy on the reasons why hospitals advertise. An interesting reason is pressure from physicians:

Another purpose is to respond from pressure from your doctors and show them that you support their programs. Before I took this job, I talked with the head of a major Boston hospital who gave that as the primary reason for ads. “There is no evidence that ads work in creating business,” he said, “but we need to keep our doctors happy.” I have certainly felt that pressure in my place, and so I understand the desire to send a signal to your doctors — who, after all, are essentially free agents who can easily change hospital affiliation — that you support their practices.