chapter  8
21 Pages

Medical Business in the Private Sector

ByDouglas R. Mackintosh

A growing number of private companies contract with hospitals, group practices, and the government. The Medical Device Amendments of 1976 gave the Food and Drug Administration new authority over the safety and effectiveness of medical devices, including many diagnostic products. The laboratory accreditation programs of the American College of Pathologists and of the state of New York are the only two private programs to adjust their standards to comply with those established for interstate federal licensure. Clinical laboratories seem to be about equally divided in number between hospitals and private, non-hospital-based offices; the rest are in the state and local health departments. Ninety-seven percent of the non-hospital-based independent clinical laboratories are privately owned. Drug companies are even generous enough to give medical students black bags and discounts on the other accoutrements of practice. Manufacturers allow wholesalers and retailers to return unsold merchandise for credit.