Although nurses comprise the largest professional group seeing to the nation's health care [see nursing stats] four groups completely apart from them [ the MCOs -managed care organizations, the insurance companies, the payers, and the providers other than nurses, ie, Doctors]  constitute the main current structure of personal health care in the USA.  Since the 1980s, the for-profit sector has gained dominance of the private sector. For-Profit Health Care has its roots in the wide sweeping changes of 1964, the emcompassing result of third party payment, and the alienation of the consumer from responsability for the payment of his or her own health care.   See Also Hospitals and Hospital Stats [a dedicated page within this chapter]  The history of the shifting power in American health care through the 20th century involves several eras, and  is nicely explained by Rene Jahiel in an article published in CMJ [see citation below] .  Identified in the power groups are "physicians (from the 1900s on), hospitals and not-for-profit insurance (from the 1930s on), governmental regulators (from the 1960s on), and, lastly, for-profit managed care enterprises (from the 1980s on). In the 1980s and 1990s, as health services developed into a major industry, two contending business groups (health plans and payers) took commanding positions over consumers and employees. Market-oriented, for-profit managed care organizations came to play a dominant role. During that period, access to, and, by some measures, quality of care has declined. The rise in health care costs has been interrupted, but it is not clear how long this will last....."1 Page Table of Contents: The Advent and Ascendancy of For Profit Health Care [1964 on] and The American Conversion from Nonprofit to Corporate [for profit] Hospital Systems The Facts Regarding Care and Cost of For-Profit Hospitals

"In 1995 alone 60 non-profit hospitals changed to for-profit status -- twice as many as in the previous year. (Needleman, Challet and Lamphere, 1997). In 1993 there were a total of 18 conversions of non-profit hospitals and health plans to for-profit status, representing 2.1 percent of nonprofit hospitals. While for-profit conversions occurred in 17 states during 1990-93, they were concentrated in a small number of states (including California, Florida, Missouri and Texas.) (Needleman, Challet and Lamphere, 1997)... The primary difference between nonprofit and for-profit health care entities -- both facilities and health plans -- is where excess revenues are placed. Investor-owned entities generally distribute their excess revenues to shareholders. Nonprofits have no shareholders. They can utilize their excess revenues in a
number of ways, and towards a number of ends. For instance, these revenues can be used to improve services, provide uncompensated care, provide community outreach or educational services, or otherwise be redistributed into enhanced services. On the other hand, nonprofits can, and often do, put these revenues into capital expansion projects or CEO salaries. In an increasingly competitive environment, they can also hold on to these revenues in order to fund future mergers or acquisitions, to increase their creditworthiness or to build more formidable advertising budgets."³ [see larger excerpt of this article below] 

"The responsibility for the transformation of American nonprofit hospitals into competing corporate systems with the ensuing massive losses of public monies lies squarely with their governing boards. The governing boards of the nonprofit hospital systems are controlled by CEOs of large corporations, the same CEOs who ardently support HMOs and managed care as a means of lowering health care costs. These CEOs run the hospitals like they run their corporations with absolute top-down power. They shun input from medical staff, nurses, and the general public. They have never been held accountable for their actions. It is ironic that their transformation of American  hospitals has not produced the anticipated monetary savings for their companies......Over the past decade health care reformers from Americaís business schools preached the virtues of  'seamless' integrated hospital systems. Several years ago at an AMA meeting I heard one young MBA sermonize with evangelical fervor about the dawn of a new utopian health care millennium. The reformersí sweet siren song convinced hospital trustees, desperate for a quick fix for rising health care costs, to implement their unsubstantiated theories. This costly mistake is largely responsible for the current   sorry state of affairs in the hospital industry. Harvard Business School Professor Regina Herzlinger in her book 'Market Driven Health Care' convincingly refutes the  reformersí theories by marshalling studies that conclusively demonstrate that vertical integration does not improve efficiency and drives up hospital costs......Eighty-five percent of the hospitals in the United States are nonprofit, and 45 percent of hospitals are in integrated systems. These are the hospitals that have engaged in the most egregious practices that waste precious resources. Hospital systems have spent enormous sums of money on marketing, information systems and administrative salaries. They continue to lose staggering sums on vertical integration (the purchasing of doctorsí practices and owning HMOs) and horizontal integration (hospital mergers) in a quixotic quest to improve efficiency by achieving economy of scale. Finally they have spent literally billions of dollars on unnecessary building projects and capital improvements supposedly to attract patients......The theory that a free market system as exists in the private sector would work in health care where the vast majority of hospitals are still "nonprofit" is fundamentally flawed. First of all the term nonprofit in a profit-driven free market is an oxymoron. More importantly, when hospital systems go into debt what do they do?They ask their rich Uncle Sam (the taxpayer) to bail them out....I am not the only one who thinks this way. The November-December 2000 issue of Health Affairs, a respected health economics journal, published four articles that called for more accountability and more public service from nonprofit hospitals. The authors conclude that the public is not getting its moneyís worth from nonprofits. The specter of hospital systems losing their tax-exempt status if the public becomes sufficiently disenchanted is a distinct possibility. The corporate takeover of nonprofit hospitals has undermined the social compact with the public that formerly existed and which was the original basis for their being granted tax-exempt status" ²

• "It's a myth private for-profit health care results in better quality health care. A 1999 study in the Journal of the American Medical Association concluded for-profit U.S. health maintenance organizations (HMOs) rated lower than not-for-profit HMOs on all 14 quality indicators by the National Committee for Quality  Assurance.
• It is also a myth for-profit hospitals and services are cheaper and more efficient than public ones.
• The New England Journal of Medicine concludes that in decades of research, no   peer-reviewed study found for-profit hospitals are less expensive. For-profit hospitals cost more to operate and spend far more on administration." Western Catholic Reporter Week of March 18, 2002 Take the price tag off medicare By BISHOP FRED HENRY
• "According to an editorial in today's New England Journal of Medicine, for-profit hospitals provide lower quality care while charging higher prices than not-for profit facilities. The editorial, which accompanies a study on the impact of investor-ownership on Medicare costs, comes just three weeks after the publication of research showing that investor-owned HMOs scored lower on every single one of 14 quality measures and spent 48 percent more on overhead  and profits than not-for-profit HMOs...'The editorial and study conclusively demonstrate - if there was any doubt left -- that marketplace medicine is a failed experiment,'  says Dr. Quentin Young, National Coordinator, Physicians for a National Health Program and an internist in Chicago. 'We have 45 million people without any insurance and 125,000 additional people losing their insurance every month. Every day there's more bad news about how rotten our health system is - prices rising, quality falling, and, just this month, an additional 250,000 seniors being  dumped from Medicare HMOs.'." From For-Profit Hospitals Deliver Inferior Care at Inflated Prices and Cost Medicare an Extra $5.2 Billion Annually. Presented in the Connecticutt Coalition for Universal Healthcare Webpages

• For-Profit Health Care--The Dark Side. From "When Money Is the Mission -- The High Costs of Investor-Owned Care" by Steffie Woolhandler, M.D., M.P.H and David U. Himmelstein, M.D. in The New England Journal of Medicine, 8/5/99: [Rural Wisconsin Health Cooperative Webpages, Review & Commentary on Health Policy Issues from a Rural Per-spective - November 1st, 1999 ] :
"Market medicineís dogma, that the profit motive optimizes care and minimizes costs, seems impervious to evidence that contradicts it. For decades, studies have shown that  for-profit hospitals are 3 to 11 percent more expensive than not-for-profit hospitals; no peer-reviewed study has found that for-profit hospitals are less expensive. For-profit hospitals spend less on personnel, avoid providing charity care, and shorten stays. But because they spend far more on administration and ancillary services than not-for-profit hospitals, their total costs are higher."

 "We have recently shown that investor-owned health maintenance organizations (HMOs) have lower quality-of-care scores than not-for-profit HMOs. Why is it that  the market does not weed out firms that offer inferior products at inflated prices? The simplest explanation is that the competitive free market described in textbooks does not and cannot exist in health care for several reasons."

 "First, many hospitals exercise virtual monopolies. Roughly half of Americans live in areas too sparsely populated to support medical competition. For-profit chains have  concentrated their purchases of hospitals in areas where they can control much of the market."

 "Second, an informed choice by consumers, which results in efficiency, according to market theory, is a mirage in health care. Many patients (e.g., frail elderly patients and   those who are seriously ill, who account for the largest proportion of hospital care) cannot comparison shop, reduce their demand for services when suppliers raise prices, or accurately appraise quality. Patients rely on their physiciansí advice. Even lucid, educated patients may have difficulty gauging whether a 7-day hospital stay is better than the more lucrative alternative (for the hospital) of a 2-day stay followed by 12 days in a hospital-owned nursing facility."

       "Third, if purchasers cannot accurately appraise a product, they cannot determine whether its price is fair. Efforts to evaluate care are no match for profit-driven schemes to misrepresent it. Doctors and hospitals create the data used to monitor them. When used as the basis for financial rewards, such data have the accuracy of a tax return. By reporting minor chest discomfort as angina rather than chest pain, for example, a hospital can increase its  DRG payment by 9.2 percent and factitiously improve the outcome of treatment for angina. Exploiting loopholes is more lucrative than improving efficiency or quality, and creative cheaters have a decisive market advantage."

  "But our main objection to investor-owned care is not that it wastes taxpayersí money, nor even that it causes modest decrements in quality. The most serious problem with investor owned care is that it embodies a new value system that severs the communal roots and samaritan traditions of hospitals, makes doctors and nurses the instruments of investors, and views patients as commodities.""

". A number of factors have fueled the trend toward conversion, including the continued growth of large, for-profit hospital chains such as Columbia/HCA (which now operates 61% of private hospital beds) and Tenet; mergers of health care facilities and systems on a local level; a determination by some nonprofit hospitals and health plans that for-profit status will allow a more competitive stance in the health care market; a desire for better access to capital; and, in some instances, personal financial benefit to directors and administrators. For-profit conversions take place through a variety of arrangements, including sales, mergers, use of for-profit subsidiaries, and joint ventures (which generally do not involve a transfer of assets.)

In 1995 alone 60 non-profit hospitals changed to for-profit status -- twice as many as in the previous year. (Needleman, Challet and Lamphere, 1997). In 1993 there were a total of 18 conversions of non-profit hospitals and health plans to for-profit status, representing 2.1 percent of nonprofit hospitals. While for-profit conversions occurred in 17 states during 1990-93, they were concentrated in a small number of states (including California, Florida, Missouri and Texas.) (Needleman, Challet and Lamphere, 1997)... The primary difference between nonprofit and for-profit health care entities -- both facilities and health plans -- is where excess revenues are placed. Investor-owned entities generally distribute their excess revenues to shareholders. Nonprofits have no shareholders. They can utilize their excess revenues in a
number of ways, and towards a number of ends. For instance, these revenues can be used to improve services, provide uncompensated care, provide community outreach or educational services, or otherwise be redistributed into enhanced services. On the other hand, nonprofits can, and often do, put these revenues into capital expansion projects or CEO salaries. In an increasingly competitive environment, they can also hold on to these revenues in order to fund future mergers or acquisitions, to increase their creditworthiness or to build more formidable advertising budgets."³