The literature often classifies hospitals into three main groups: private for-
profit (increasingly found as members of corporate-owned chains of hospi-
tals), private nonprofit (also increasingly part of larger chains of nonprofits),
and public nonprofits, typically owned by counties, states, or municipalities.
In some ways, however, it makes more sense to classify hospitals into two
main groups: private and public. Private hospitals, both for-profit and non-
profit, are increasingly concerned about costs and profitability. Everything
possible is done to attract well-insured patients and to discourage or elimi-
nate uninsured patients, indigents, and those insured by lower-reimbursing
government-assisted forms of health insurance. These patients are covertly
and overtly steered to the increasingly stressed and underfunded public sec-
tor for health care: public hospitals and federally funded health centers. The
social and economic forces driving the transformation of hospital care is re-
sulting in a two-track system.

For better or for worse, hospitals are the focal point of health care in the
United States. They represent the largest single category of health care
spending, at 44 percent of the national total. Not counting federal facilities,
5,342 community hospitals employ 3.5 million people in the United States.
Of the total number of hospitals, almost 60 percent are private nonprofit,
nearly 27 percent are public nonprofit, and the rest are for-profit. The
United States has patient-per-day and patient-per-hospital-stay costs far
higher than those of any other industrialized nation. In addition, compared
to most other industrialized countries, U.S. hospitals are characterized by
fewer beds per thousand population, a lower admission rate, and a shorter
length of stay. On the other hand, compared to these same countries, the
United States typically has more employees per bed ( Iglehart 1993,
372-73).

Between 1980 and 1990 over 550 community hospitals failed, and several
hundred others merged. During approximately the same period, community
hospital admissions dropped from 36.4 million to 31.1 million. Between the

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