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Original Scholarship Population Health Health care costs
David U. Himmelstein
Aug 23, 2023
Aug 21, 2023
Jul 10, 2023
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Context: Who pays for health care—and who owns it—determine what care is delivered, who receives it, and who profits from it. We examined trends in health care ownership and financing over a century.
Methods: We used multiple historical and current data sources (including data from the American Medical Association, the American Hospital Association, government publications and surveys, and analyses of Medicare Provider of Services files) to classify health care provider ownership as: public, private (for-profit), and private (not-for-profit). We used US Census data to classify physicians’ employers as public, not-for-profit, or for-profit entities or “self-employed.” We combined estimates from the official National Health Expenditures Accounts with other data sources to determine the public vs. private share of health care spending since 1923; we calculated a “comprehensive” public share metric that accounted for public subsidization of private health expenditures, mostly via the tax exemption for employer-sponsored insurance plans or government purchase of such plans for public employees.
Findings: For-profit ownership of most health care subsectors has risen in recent decades and now predominates in several (including nursing facilities, ambulatory surgical facilities, dialysis facilities, hospices, and home health agencies). However, most community hospitals remain not-for-profit. Additionally, over the past century, a growing share of physicians identify as employees. Meanwhile, the comprehensive taxpayer-financed share of health care spending has increased dramatically from 9% in 1923 to 69% in 2020, with taxpayer-financed subsidies to private expenditures accounting for much of the recent growth.
Conclusions: American health care is increasingly publicly financed yet investor owned, a trend accompanied by rising costs and, recently, worsening population health. A reassessment of the US mode of health care financing and ownership appears warranted.
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