ABSTRACT
The major growth of for-profit chains came from the purchase of financially troubled hospitals. Traditional reimbursement policies go far to explain the attractiveness of the hospital industry to entrepreneurs. In the late nineteenth century, as hospitals became safe and attractive places in which to care for the ill, small for-profit hospitals sprung up in the United States and Western Europe. For-profit chain costs have been higher than nonprofit hospital costs for three reasons: they mark up charges well above expenses; they use more expensive ancillary services than nonprofit facilities; and charges must cover their higher capital costs. Florida's Hospital Cost Containment Board openly criticized for-profit hospitals in its 1983-84 annual report for their failure to share the burden of serving the uninsured poor. As hospital costs kept spiraling and as the number of uninsured poor increased, commercial insurers and business interests became less willing to pay this cost shift or what they called a "sick tax".
