For-Profit Enterprise in Health Care: Can it Contribute to Health Reform?

Abstract:     
Since the demise of the last major health reform initiative in 1994, health coverage for the American people has deteriorated. Private insurance costs have risen, and coverage under private insurance became less comprehensive, with higher deductibles and copayments. Many new treatments for serious diseases have become more and more unaffordable, even for those with health insurance coverage. Public programs have picked up some slack. But gaps remain and many are uninsured. The elephant in the room when it comes to healthcare is its cost. This article analyzes how and why the cost of healthcare services grew in the way they did from the 1930s until today. This article proposes that the inflation in healthcare costs in the United States is due to both factors common to other countries and unique to the United States. The common factors are: (1) advances in medical science and associated technology and pharmaceutical products; and (2) the advent of widespread health insurance coverage. The factor unique to the United States is the degree to which healthcare is produced, financed and delivered through for-profit enterprise. This article analyzes the characteristics and behavior of the major players in the healthcare sector – physicians, hospitals, health insurers and medical product manufacturers – and assesses what characteristics and behavior might be undesirable in a publically-subsidized sector of the national economy. Resolving these issues becomes increasingly important as the nation moves toward health reform and mandated insurance coverage imposing involuntary financial obligations on patients, employees and employers.

Number of Pages in PDF File: 31

Keywords: health care, for-profit health care, health law and policy

Accepted Paper Series