The market for health care: where is the patient?

Abstract

In 1980 I wrote an article in the New England Journal of Medicine (1) in which I said that the most important new development in the US health care system was the recent, relatively unheralded rise of a huge new industry that supplied medical services for profit. Without attracting much public attention, investor-owned businesses had begun to take over large parts of a health system which until then had been largely community-based and not-for-profit. At that time the major components of this new industry were proprietary hospitals and nursing homes, diagnostic laboratories, home-care and emergency room services, and hemodialysis centers. In total, these businesses had already captured almost a quarter of all the revenues spent for personal health care and I predicted their rapid growth would soon make them not only a dominating force in our health care delivery system, but also a major influence on public policy. There was an obvious analogy between this burgeoning, highly profitable new industry and the “military-industrial complex” that Dwight Eisenhower had warned about in his farewell address as President in 1961, so I called it the “new medical-industrial complex”. As the significance of the commercial transformation of this country’s health care system became increasingly apparent, this subject began to attract widening interest in the popular media and in the professional literature. Paul Starr’s 1982 landmark study of the social and economic development of medicine in America (2) was the first major scholarly work to take up this theme and put it in broad historical context. After devoting most of his book to the rise of the medical profession and its struggle for professional autonomy, Starr wrote a final chapter, entitled “The Coming of the Corporation”, which described the new corporate transformation of the US health care system and its growing threat to the …