Hostname: page-component-78c5997874-8bhkd Total loading time: 0 Render date: 2024-11-06T01:22:28.704Z Has data issue: false hasContentIssue false
  • English
  • Français

Considering a New Structure: The Health Services Holding Company

Published online by Cambridge University Press:  27 April 2021

Frederick H. Kerr
Get access Rights & Permissions [Opens in a new window]

Extract

American hospitals are in turmoil, experiencing declines in community esteem, reductions in Medicare payments, pressure for cost control by employers and insurers, and internal conflict between managements and medical staffs. Each of these conflicts is simply another facet of an overall problem: American society's recently conceived notion that unlimited access to the best available health services constitutes a right. Americans have adopted this idea, however, without considering the economic consequences in an environment of rapidly advancing technology and an aging population. Costs have escalated rapidly, reaching ten and one-half percent of the gross national product; the health services system is in strong competition with other important societal segments for scarce resources. The money may not be running out, but a rather naive institution, the community hospital, has suddenly found itself in an environment for which it is ill-prepared.

Governmental licensure of health professionals has a long history, but significant federal intervention in hospital financing did not begin until after World War II with the advent of the Hill-Burton program, which provided funds for hospital expansion. Medicare introduced federal payment for hospital care provided to the elderly and used formulas for cost reimbursement in 1966.

Type
Article
Information
Law, Medicine and Healthcare , Volume 11 , Issue 5 , October 1983 , pp. 214 - 219
Copyright
Copyright © American Society of Law, Medicine and Ethics 1983

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

For a review of the political process which reflected public opinion, see Somers, H.M. Ramsey, A., Medicare and the Hospitals: Issues and Prospects (Brookings Institute, Washington, D.C.) (1967) at 1-24, 243–47.Google Scholar
Somers, H.M., Seven Forces that are Shaping the Future of Hospitals, Trustee 33(1): 27–30 (January 1980).Google ScholarPubMed
Medical Bill in U.S. Tops 10% of GNP, Blade, Toledo, July 17, 1983, Al.Google Scholar
Hospital Survey and Construction (Hill-Burton) Act of 1946, 42 U.S.C. §§291-291o.Google Scholar
Social Security Amendments of 1965, Pub. L. No. 89-97, 79 Stat. 286 (adding Titles XVII and XIX to the Social Security Act).Google Scholar
See generally Kinzer, D.M., Health Controls out of Control: Warnings to the Nation from Massachusetts (Teach'em, Inc., Chicago) (1977).Google Scholar
Congress enacted such limits as part of the Tax Equity and Fiscal Responsibility Act of 1982, Pub. L. No. 97-248, 96 Stat. 324 (1982) (codified as amended in scattered sections of U.S.C.)Google Scholar
Social Security Amendments of 1983, Pub. L. No. 98-21, §§601-07, 97 Stat. 65, 149–72 (1983) (prospective payment for Medicare inpatient hospital services based on DRGs).Google Scholar
See generally Bradford, C. et al. , The Hospital Capital Crisis: Issues for Trustees, Harvard Business Review 60(5): 56–68 (September/October 1982).Google ScholarPubMed
National Health Planning and Resources Development Act of 1974, Pub. L. No. 93-641 (codified as amended at 42 U.S.C. §§300k-300m-6 (Supp. V 1981)). See also Health Planning; Corporate Reorganization, in Hospital Law Manual (Aspen Systems Corp., Germantown, Md.) (1983) at ¶6-2 and ¶4-1.Google Scholar
Although cost reimbursement is being phased out for Medicare payments for inpatient care, it remains the basis for outpatient care and payment for capitalization. In addition, cost is the basis for Medicaid payment and rate-setting in some states, some Blue Cross plans, and certain other payment sources.Google Scholar
I.R.C. §§511-513 (West Supp. 1983); Rev. Rul. 375, 1968–2 C.B. 245; Rev. Rul. 376, 1968–2 C.B. 246. See Carle Foundation v. United States, 611 F.2d 1192 (7th Cir. 1979), cert. den., 101 S.Ct. 85 (1980) (sales by tax-exempt hospital pharmacy to non-exempt clinic and clinic's private patients give rise to unrelated business taxable income).Google Scholar
I.R.C. §501 (West Supp. 1983).Google Scholar
See, e.g., 42 C.F.R. §§405. 401–405.488 (1982).Google Scholar
Henn, H.G., Handbook of the Law of Corporations and Other Business Enterprises (West Publishing Co., St. Paul, Minn.) (2nd ed. 1970) at 457.Google Scholar
Zuckerman, H.S., Multi-Institutional Systems: Their Promise and Performance, in Multi-Institutional Hospital Systems (Zuckerman, H.S., ed.) (Hospital Research and Educational Trust, Chicago) (1979) at 10.Google ScholarPubMed
Corporate Reorganization, in Hospital Law Manual, supra note 11, ¶1–5.Google Scholar
Id. §3.Google Scholar
See id. ¶1–6.Google Scholar
I.R.C. §509 (West Supp. 1983); Hospital Law Manual, supra note 11, ¶1–7.Google Scholar
See Bradford, supra note 10.Google Scholar
Hospital Law Manual, supra note 11, §3.Google Scholar
Id.Google Scholar
Brown, M. Lewis, H.L., Hospital Management Systems: Multi-Unit Organization And Delivery of Health Care (Aspen Systems Corp., Germantown, Md.) (1976) at 259-74.Google Scholar
Zuckerman, , supra note 16, at 35-36.Google Scholar
See generally Hospital Bldg. Co. v. Trustees of Rex Hosp., 425 U.S. 738 (1976) (alleged attempt of private tax-exempt hospitals to block expansion and relocation of proprietary hospital involves out-of-state lenders, patients and hospital suppliers, sufficiently affecting interstate commerce to give rise to a cause of action under Sherman Anti-Trust Act).Google Scholar
Standard Oil Co. v. United States, 221 U.S. 1 (1911) (classic antitrust case; decree ordered dissolution of holding company which combined various petroleum corporations with intent to monopolize trade).Google Scholar
See United States v. Paramount Pictures, Inc., 334 U.S. 131 (1948) (sustained injunctions against major motion picture producers, distributors, and exhibitors who were charged with conspiring to restrain and monopolize trade; vertical control violates Sherman Anti-Trust Act).Google Scholar