The Health Care Industry: Where Is It Taking Us?

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Abstract
ELEVEN years ago, in the Annual Discourse presented before the Massachusetts Medical Society and later published in the Journal,1 I first addressed the issue of commercialism in medical care. Referring to what I called "the new medical—industrial complex," I described a huge new industry that was supplying health care services for profit. It included proprietary hospitals and nursing homes, diagnostic laboratories, home care and emergency room services, renal hemodialysis units, and a wide variety of other medical services that had formerly been provided largely by public or private not-for-profit community-based institutions or by private physicians in their offices. The medical-industrial complex had developed mainly as a response to the entrepreneurial opportunities afforded by the expansion of health insurance coverage offering indemnification through Medicare and employment-based plans. Given the open-ended, piecework basis of third-party payment, business ownership of a medical facility virtually guaranteed a profit, provided that practicing physicians could be persuaded to use the facility and that services were limited to fully insured patients.
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