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Mother of InventionHow the Government Created "Free-Market" Health Care$
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Robert I. Field

Print publication date: 2013

Print ISBN-13: 9780199746750

Published to Oxford Scholarship Online: January 2014

DOI: 10.1093/acprof:oso/9780199746750.001.0001

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How the Government Created the Hospital Industry

How the Government Created the Hospital Industry

(p.85) 4 How the Government Created the Hospital Industry
Mother of Invention

Robert I. Field

Oxford University Press

When hospitals emerged as centers of technologically based care in the mid-twentieth century, public access was uneven. In response, the federal government poured billions of dollars into hospital expansion through the Hill-Burton Act of 1946, putting hospital care within the geographic reach of most Americans and substantially increasing the industry’s size. The governmenttransformed the industry even more fundamentally though Medicare, enacted in 1965. That program funded another expansion spurt and supplied close to half the revenues of many institutions. It fostered a technological revolution in care and formed the financial base for the rise of national for-profit chains and academic medical centers. The prospective payment system that it adopted in 1983 also altered the operational paradigm of many hospitals, rearranged relationships with physicians, and transformed the nature of medical care. Without Medicare, hospitals would still exist, but they would be smaller, less numerous, and less technologically capable.

Keywords:   Hospitals, Medicare, Medicaid, Academic medical center, Hill-Burton Act, For-profit hospitals, Prospective payment, Tax exempt hospitals, Inpatient care, Outpatient care

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