ABSTRACT
Health insurance companies began to set "caps" on reimbursement for doctors' services and hospital charges. International developments significantly changed the implications of health innovations in the 1980s. American industry, seriously challenged even within the US by competitors based abroad, found it harder to pay its share of rising medical care costs. Health care and military cost increases, decreasing funding of government expenses from business or graduated personal income taxes, increases in the federal debt, the growing redirection of American investment capital abroad, and balance of trade losses marked a shift from the growth dynamic that had been the American economy's hallmark in the earlier post-war period. The health-care industry's growth was eating into corporate profits for other business sectors. Business leaders in other parts of the economy that pay for health-care services were being encouraged, by government and their own coordinating organizations, to play an active role in health-care cost control.
