Expenses on Health Care in America

However, hospitals argon firms of a alter type  not simply in terms of the serve they append, still in terms of how and by whom those services are provided. Hospitals are also institutions (or firms) in transition. To understand how they work (or give to work) today, we must examine how they worked in the nottodistant past.

Until the travel decade or two, most hospitals were nonprofit enterprises. Thus, they were not products of severe business entrepreneurship in the usual sense of a person or persons setting up a business to provide a good or service and earn a profit by doing so. Rather, hospitals were established by what might be called "philanthropic entrepreneurship," in which a person or persons persuaded donors, or a community, that a facility was worth supporting. Hospital operators and investors original some material rewards  honaria for board members, buildings named after major donors  but running hospitals was not in and of itself a way to crystallize money.

Nevertheless, the nonprofit hospital had many of the characteristics of a business.

Payments by patients would not serve to provide a profit, but would tend to change magnitude the drain on endowments, paying most operating expenses and passing the endowments largely for capital projects. Thus, a hospital that could fill its beds would be more economically viable than one with a poorer " gist factor

Siler, Julia Flynn. (1990) "Hospital, Heal Thyself." Business week (August 27, 1990), 6668.

Hamilton, Joan O'C. (1989) "The Prognosis in Health." Business Week (January 9, 1989), 82.

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