Prescription for Profits

Private hospital firms bring management skills to the bedside

Every morning about 1 million Americans wake up in hospitals. By the end of the day they have run up medical bills totaling some $375 million. Until about ten years ago, most hospitals were operated as nonprofit community institutions without much regard for cost-effective management. But now private enterprise has discovered the hospital business. Says U.S. Senator Howard Metzenbaum of Ohio: "There is one business that is growing faster than the computer business—franchised medicine."

Nearly one in every five U.S. hospitals is now owned...

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