Word: investors
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Dates: during 1980-1989
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...sight of William Schroeder joking with his family last week was the best possible advertisement not just for the miracles of science but for Humana, the investor-owned medical conglomerate. In the fast-growing U.S. health care industry, investor-owned companies are challenging nonprofit organizations and community hospitals for a greater share of the nearly $1 billion-a-day business. Profitmaking companies now own or manage more than 20% of all U.S. hospitals, double the percentage of five years ago. Moreover, they are moving rapidly into affiliated areas such as health maintenance organizations, satellite clinics and surgical-equipment firms...
...Humana sold its nursing homes, then numbering 41, for $ 14 million in order to concentrate on hospitals. Jones and Cherry at the time were buying a hospital a month, mostly from groups of doctors. Investor-owned hospitals were not a new phenomenon; doctors had been running them for decades. What was new was the idea of linking them in large chains...
...Investor-owned corporations also have advantages in raising money. As medicine has become more capital intensive with the influx of expensive high-technology devices, hospital administrators have had to look for new sources of funding. Industry experts estimate that U.S. hospitals will spend about $163 billion on plant and equipment in the 1980s. Traditional types of revenue, such as philanthropy, tax-exempt bonds and public subsidies, are no longer enough. For-profit hospitals with good balance sheets, however, can raise money by selling stock...
There is some evidence to support this charge. Investor-owned hospital chains generally follow a policy of sending indigent patients to nearby community hospitals when possible. Humana Spokesman Robert Irvine points out that people who cannot pay are not turned away from the University of Louisville facility, but defends the right of the firm's other hospitals to refer indigents to nonprofit and community institutions. Says he: "We're paying money through our taxes to support those hospitals. Those being paid to do it should be the ones to handle...
...spent a lot of time on South Africa last year," says Morrell, pointing to a lengthy ethics report that the Radcliffe Advisory Committee on Investor Responsibility submitted last year to the executive board of the Radcliffe trustees, which must approve all investment decisions...