The Corporatization of American Hospitals

The author reviewed Paul Starr's 1982 book The Social Transformation of American Medicine (TSTAM). Starr's focus in TSTAM was the corporatization of medical care which he posited would involve: change from nonprofit and public hospitals to private and for-profit facilities; horizontal integration via multiple health systems; a change from single organizations to corporations that operate across many health care markets; diversification of services via vertical integration; and more control and ownership of health care at the regional and national level. Starr's assertions that for-profit hospital systems and multiple hospital systems would become increasingly prevalent was somewhat borne out when the author examined recent data. The number of multiple hospital systems increased from 289 to 310 in the years from 1990 to 2001. However, the percentage of hospitals that were for-profit decreased from 32.7 percent in 1990 to 27.8 percent in 2001. In regard to the assertion the health systems would change from local organizations to being regional and national conglomerates, data illustrated that in 2001, 63.9 percent of systems existed in single metropolitan areas. Starr also suggested that hospitals would undergo vertical integration. The prevalence of services such as home health care and nursing homes increased during the 1990s only to decrease somewhat by 2001. However, the percentage of hospitals that contracted with physicians, another aspect of vertical integration, declined from 58.5 percent of health systems in 1994 to 31.8 percent in 2001. Starr's final assertion that local influence on hospitals would decrease was not found. Health systems saw the benefits of maintaining relationships with local stakeholders. Despite not attaining complete accuracy with his predictions for health systems, Starr grappled with many issues that proved to be relevant for medical care in the U.S. many years before others began to pay attention to such topics.