Impact of For-Profit Enterprise on Health Care

Abstract

acwtacn HE effects of profit-seeking enterprises in the field of health care can be viewed from a variety of perspectives. Mine are based on 30 years of experience as a private physician practicing general internal medicine in a local community in Chicago, an equal length of time e v on the faculty of the University of Illinois College of Medicine, ten years as Chairman of Medicine at Cook County Hospital, a long-term public involvement in many health care issues, and, since November, 1983, appointment as President-designate of the Chicago Board of Health. An in-depth examination of for-profit trends is timely and of very great importance; there is no more paramount issue in the field of health. The speed and depth of penetration of major health care systems by investorowned, profit-seeking enterprises has already had significant impact; they may well become the dominant factor in this vital sector. I should like to examine the key issues in health and attempt to characterize the effects of a marketplace, profit mode on these matters. Let me start with the overarching question of the day: the cost of medical care. I find the position of marketplace advocates to be marginally persuasive, limited to the benefits of improved management and, on occasion, economy of scale. I hasten to add, however, that the profits from these sources in no small part are simply distributed to the investorowners, and it goes without saying that good managerial practice and economy of scale can be achieved outside of a profit mode. More formidable is the undeniable superior access of publicly held corporations to capital, based upon investor optimism about high dividends and stock rises. The remarkable yields of the past decade justify the opti-