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:~dex A accreditation of hospitals, 19 administrators, see hospital, admin- istrators advertising, medical profession, 7, 127-128 American Hospital Association Guide, 52 American Medical Association (AMA) code of ethics, 6-7, 126-128, 130- 134, 138, 145 v. Federal Trade Commission, 167 views on patents, 128 views on physician advertising, 128 views on physician ownership of health care facilities, 130-132 American Medicorp, 46-47 American Osteopathic Association, 19 Arizona v. Maricopa County Medical Society, 166-167 B boards of directors, 18, 44, 88 of for-prof~t hospitals, 136 of nonprofit hospitals, 20-21 open meetings of, 29-30 quality of care and, 22 Brookwood Health Services, 46, 47 C capital costs bond financing, 26, 28 certificate of need (CON) legislation, 43, 53, 58, 64 code of ethics American Bar Association, 137- 138 American Medical Association, 6- 7, 126-1228, 130-134, 138, 145 Australian Medical Association, 127 British Medical Association, 127 certified public accountants, 136 engineers, 137 physicians' compared with those of other professionals, 136-138 see also ethics; medical ethics 175

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176 conflicts of interest, 2, 6, 9, 129, 144-148, 154-156, 166-167; see also ethics; medical ethics D Darling v. Charleston Community Memorial Hospital, 84 diagnostic tests, 110-111, 114 dialysis, see hemodialysis double agent problem, 143-144 Eeconomies of scale, 43, 47, 49 ethics consequentialist, 141-142 deontological, 141-142 see also conflicts of interest; medi- cal ethics F Federal Trade Commission hospital acquisitions and, 30 physician advertising and, 128, 132 v. American Medical Association, 167 Federation of American Hospitals, 52 fee splitting, 104, 129-130 fiduciary law, 153-167 financial differences, for-profit and nonprofit hospitals, 24, 26-29 for-profit hospitals, see hospital management companies G General Care Corporation, 46 H health care as a commodity, 142-143 Index costs of, 64-66 future of, 8-10 quality of, 66 health maintenance organizations (HMOs), 95, 108, 112-114, 118- 120, 154 health systems agencies (HSAs), 84 hemodialysis, 3, 6, 125, 134, 155- 156 Hill-Burton Act, 27, 55 funds, 55, 147 holding companies, 31; see also hos- pital management companies hospital administrators, 8, 20-21, 62, 70, 73-74, 136 admission policies, 66-67; see also indigent care chains, see hospital management companies Hospital Building Company v. Trustees of Rex Hospital, 30 Hospital Corporation of America (HCA) acute care beds owned by, 36 (ta- ble) acquisition of Hospital Affiliates International, 3, 39-40, 45-46 board of directors of, 44 debt financing by, 42 decentralized operations of, 45, 47, 89 net revenue of, 36 stock ownership of, 40 stock prices of, 40 hospital governance administrative decision making, 74 committees, 89-90 clinical decision making, 74, 92- 94, 103-120 compromise decisions, 75, 78 (ta- ble), 80 computational decisions, 75, 78, 80 costs and, 90, 92 dual authority model, 74, 83-84, 86-87, 90, 98-99 formal versus informal involve-

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Index ment of physicians in, 87-90 future issues, 92-98 inspirational decision making, 75, 78 (table), 80 institutional decision making, 94- 95 investor-owned hospitals, 79-80; see also hospital management companies judgmental decisions, 75, 76, 80 models, 74, 82-87, 90, 96-99 Lifemark 45 organizational versus profession- als' needs, 86-87 physician disagreements about, 81-82 shared authority model of, 74, 82, 84-87, 90, 96-98 types of hospital ownership, 79-80 hospital management companies, 18, 20, 35-36 acquisitions by, 45-47, 51-73 acute care beds owned by, 36-37 control after an acquisition, 60-62 debt instruments, 41 differences among, 44-45 future of, 48-49 net revenue of, 36-37 operations of, 18-20 sources of capital for, 28, 41 stock prices of, 39-41 hospital rate review commissions, 84 Humana, Inc. acute care beds owned by, 36 (ta- ble) acquisitions by, 46-47 centralized operations of, 45, 47, 89 net revenue of, 36 stock ownership, 40 stock price trends, 40-41 Hyatt Medical Enterprises, 46 I independent practice associations (IPAs), 154 indigent care, 53, 54, 56-57, 59, 67, 147 177 investor-owned hospitals, see hospi- tal management companies J Joint Commission on Accreditation of Hospitals, 19, 22 L acute care beds owned by, 36 (ta- ble) net revenue, 36 stock ownership, 40 stock prices, 41 M malpractice, 155-156, 162-163 Medicaid, 25, 27, 43, 81-82, 146, 159 medical ethics, 7, 9 altruism and, 140-141, 148 Anglo-American, 126-127, 132 Chinese, 126, 133-134 clinical decisions and, 74, 90-92, 133-134 commercialization and, 134-135 competitor's use of outdated infor- mation and, 145-146 deonto logical versus con sequen- tialist, 141-142 double agent problem and, 143- 144 fee splitting and, 129-130 for-profit health care and, 1-16, 125-149 history of, 126-132 international context of, 125-127 lying and deception and, 144-145 patents and, 128 pharmaceuticals and, 128-129 philosophical evaluations and, 138-148 physician ownership of health care facilities and, 130-131

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178 physician self-regulation and, 148 profit motive and, 134 rebates and, 128-129 service ethic and, 7, 132-133 unprofitable products and services and, 147-148 see also code of ethics; conflicts of interest; medical ethics Medicare, 2, 14, 22, 25, 27, 28, 155, 159 multi-unit systems, 23, 79-80, 89, 94; see also hospital manage- ment companies N National Association of Urgent Care Centers, 3 National Healthcare Reform Act of 1981, 31 National Labor Relations Act, 30 National Medical Enterprises (NME) acute care beds owned by, 36 net revenue of, 36 stock ownership, 40 stock prices, 41 nonprofit hospitals, see voluntary hospitals nursing homes, 3, 130, 161 o ophthamologists kickback cases and, 158 rebates and, 129 p patents, 127-128 patients' rights, 133, 145, 165 welfare, 133, 140-141 pharmaceuticals, 129-130, 148 ~ . . pnys~c~ans advertising by, 7, 127-128, 132- 133 altruism and, 140-141, 148 Index as advisors, 157, 160-161 as agents, 107-108, 164-165 control of decisions and fees, 133- 134 fiduciary law and, 153-157 hospital governance and, 81-82 ownership of health care facilities, 130-131 professional autonomy of, 5-8, 135 professional stance of, 134-136 self-regulation and, 148 supply of, 4, 96 professional standards review orga- nizations (PSROs), 81, 84, 94 R reimbursement capitation payments, 107-108, 112, 154 fee-for-service, 107-108, 112-114, 154 S state laws corporations and, 18-19 nonprofit corporations and, 21 tax exemptions, 26, 28 transfers of funds, 28-29 T trust, physician-patient, 5-8 trustees, see boards of directors U U.S. Department of Justice, 49 U.S. Food and Drug Administration, regulations of, 6 utilization of hospitals, 112-113 V voluntary hospitals, 20-26, 79-80, 88, 95-96, 98-99