Policy Commercializing Nonprofits in Health: The History of a Paradox From the 19th Century to the ACA

March 2015 | Daniel M. Fox | Original Investigation

Policy Points:

  • Health policy in the United States has, for more than a century, simultaneously and paradoxically incentivized the growth as well as the commercialization of nonprofit organizations in the health sector.
  • This policy paradox persists during the implementation of the Affordable Care Act of 2010.

Context: For more than a century, policy in the United States has incentivized both expansion in the number and size of tax-exempt nonprofit organizations in the health sector and their commercialization. The implementation of the Affordable Care Act of 2010 (ACA) began yet another chapter in the history of this policy paradox.

Methods: This article explores the origin and persistence of the paradox using what many scholars call “interpretive social science.” This methodology prioritizes history and contingency over formal theory and methods in order to present coherent and plausible narratives of events and explanations for them. These narratives are grounded in documents generated by participants in particular events, as well as conversations with them, observing them in action, and analysis of pertinent secondary sources. The methodology achieves validity and reliability by gathering information from multiple sources and making disciplined judgments about its coherence and correspondence with reality.

Findings: A paradox with deep historical roots persists as a result of consensus about its value for both population health and the revenue of individuals and organizations in the health sector. Participants in this consensus include leaders of governance who have disagreed about many other issues. The paradox persists because of assumptions about the burden of disease and how to address it, as well as about the effects of biomedical science that is translated into professional education, practice, and the organization of services for the prevention, diagnosis, treatment, and management of illness.

Conclusions: The policy paradox that has incentivized the growth and commercialization of nonprofits in the health sector since the late 19th century remains influential in health policy, especially for the allocation of resources. However, aspects of the implementation of the ACA may constrain some of the effects of the paradox.

Author(s): Daniel M. Fox

Keywords: health financing, health policy, health providers, health services

Read on Wiley Online Library

Volume 93, Issue 1 (pages 179–210)
DOI: 10.1111/1468-0009.12109
Published in 2015