Financial History Issue 116 (Winter 2016) - Page 33

Taking Healthcare Public Investor Ownership in Healthcare Service Companies By Michael A. Martorelli Delivering Healthcare Services From the last quarter of the 19th century to the middle of the 20th century, providing medical care in a hospital or other treatment facility was thought to be largely the province of not-for-profit institutions and their managers. Ironically, sketchy records about hospital formation from 1875 to 1910 suggest that many of those institutions were organized as proprietary (for-profit) enterprises. They were usually owned by physicians and surgeons addressing the needs of their patients, not by investors seeking to build a company. Especially in the sparsely populated areas of the Southwest, many physicians viewed the establishment of proprietary hospitals as perfectly appropriate, since many communities lacked the resources to establish the type of public hospital that cities and counties began launching in the East. © Bettmann/CORBIS Institutions providing various types of healthcare treatment services have historically been organized as not-for-profit entities and controlled by municipalities, religious orders and other charitable organizations. Treating patients was thought to be a noble cause, and the province of specially-trained professionals dedicated to improving patients’ lives. The prime motivation of the people and the institutions providing healthcare to others was altruism, not profit-making. Until the mid-1960s, investors interested in participating in the growth of the healthcare