Pressures for Change

In their comprehensive 1986 treatise, Brock and Buchanan made an important distinction between for-profit chains, generally owned by investors and listed on a stock exchange, and individual for-profit institutions, usually owned by an individual or small group of individuals (frequently physicians from the community). These organizational differences create different incentives and different institutional behavioral responses. In this entry it is the latter subset of for-profit institutions that are of interest, but this in no way ameliorates the validity of these conclusions. The thrust toward identifying healthcare as a commodity distributed according to business rules has, since the early 1980s, been the overwhelming ethical reality for private and not-forprofit private institutions. All of these factors have fueled the debate about the appropriateness of maintaining the tax-free status of not-for-profit hospitals (Gray). If the societal pendulum swings back toward the treatment of healthcare as a right, alterations in institutional behavior may occur that, nevertheless, need not drive the individual for-profit institution out of business.

It is probable that the implementation of national and regional policy decisions about healthcare (such as the trend toward capitation, community rating of insurance, universal access to care, and regional databases capable of rendering comparative institutional quality-of-care estimates) will have more to do with affecting the behavior of these independent institutions than anything else. The most far-reaching impact may result from the pressure on these institutions to join effective consortia or networks of healthcare providers; they may well need to become part of an organized delivery system in order to survive. Thus, by around the year 2005, the number of independent institutions may be severely reduced. Certainly, one already sees a trend in the direction of independents moving into organized systems, not only in the hospital industry but also in the traditionally "Mom and Pop" nursing home arena.

A wide variety of individually governed institutions play a wide variety of roles in the inchoate patchwork quilt of healthcare delivery in the United States. As the forces for systemic reform build, it seems clear that they will have a predominant influence on alterations in the behavior of these various entities. Until such changes occur, one can conclude that this independent sector will in general deliver the best healthcare it can under the vagaries of access, quality, and cost that are in general dictated by the perverse organizational and fiscal incentives created by U.S. society. As a result of a wise reform movement, one can hope for an improved, more equitable, and more uniform performance from this sector of the healthcare distribution system.

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