For-Profit Hospitals

July 18, 1986

Report Outline
Bottom Line Debate
Questions of Care
Monopolies on Medicine
Special Focus

Bottom Line Debate

In less than two decades, a new for-profit medical industry—featuring large hospital chains—has emerged and altered the U.S. health system in far-reaching ways. The new chains, said the director of a recent study of for-profit health care, “are to the old ‘doctor's hospitals’ what agribusiness is to the family farm.” They have generated controversy and concern.

Some view the massive doses of for-profit medicine as harmful to the basic mission and values of the health care system. To the degree that the “bottom line” prevails, these critics argue, the system will become unable to meet needs that cannot return a profit. Under such conditions, said Jack Christy, a senior policy analyst for the American Association of Retired Persons (AARP), the real bottom line is “no money, no services.” He argued that “for us to structure a health care system on the basis that ‘those that pay, get and those that can't pay, don't’ is a serious mistake.” “No other major industrial country,” he said, “sets up its health system that way, and leaves to the mercy of the market so many of its citizens—mainly the elderly and the poor—who most need, and can least afford, good health care.”

Others argue that the spread of for-profit enterprises will rid the health care system of waste and inefficiency, and make it a more effective vehicle for delivering and financing health care. Michael Bromberg, executive director of the Federation of American Health Systems, argues that “only by harnessing the strengths of the profit motive through open-market competition and innovative delivery of care…can we maintain our nation's commitment to health care,” An editorial in The Watt Street Journal concluded: “The spread of entrepreneurial medicine is likely to result in better conditions in the hospitals, a more active role for patients in deciding on their own care, more rapid access to new medical technologies and, not least, more consumer satisfaction with medical care.”

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Aug. 13, 1999  Hospitals' Financial Woes
Jul. 18, 1986  For-Profit Hospitals
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