{hahs'-pit-ul} The modern hospital has three major functions: patient care, education, and medical research. In contrast, the earliest church-run medieval hospitals served primarily as havens for the homeless, the destitute, and those with diseases regarded as hopeless. The same purposes prompted Philadelphia Quakers to establish (1751) the first American general hospital: it was built to care for the sick whose home conditions were considered too deficient to allow for proper care. Although some of today's hospitals existed physically in the 18th century, they began to take their present form only in the last quarter of the 19th century. Biological and medical discoveries such as germ theory, antisepsis, and anesthesia led medicine to safer and less traumatic models of practice. Hospital surgery had become possible by the 1880s, when the first operating suites were constructed. The institution, however, still retained its image as a place for the poor, and most sick people of any means continued to choose to be treated at home. The rapid growth of cities was a powerful stimulus to the growth of the modern hospital. Medical facilities and skills were increasingly centralized in the late 1800s, partially in response to the urgent need of crowded urban populations for medical care. Between 1873 and 1923 the hospital system grew from a small group of about 170 institutions (many of which were mental asylums) to over 4,500 facilities, most of them offering general medical care. This growth, combined with the need of the medical profession for teaching and research facilities, led to the modern, voluntary (not-for-profit) teaching hospital, almost always located in a city. In the 1930s, major advances in \Tmedicine\t stimulated the further growth of hospitals. The introduction of the antibiotic SULFADRUGS in the mid-1930s and \Tpenicillin\t in the early 1940s reduced the excessive morbidity and mortality associated with surgical infection. When the technology necessary for blood storage was developed, blood transfusion became a matter of course, making surgery even safer. Finally, X-ray examination permitted the successful treatment of many diseases and injuries that had previously been almost impossible to diagnose. CENTRAL ROLE OF THE HOSPITAL IN MEDICAL CARE Following World War II a rapidly advancing medical technology, aided by large injections of government funds, persuaded physicians that the treatment of many ailments and diseases could be accomplished more efficiently and safely in a hospital than at their patients' homes. Hospital facilities and staffs were expanded. As the old public charity wards were augmented, and eventually replaced, by smaller rooms for paying patients, the hospital began to serve all social and economic classes, and the institution now took responsibility for two processes that had previously occurred almost exclusively in the home: being born and dying. Federal health insurance for the elderly and the poor was provided with the passage of \TMedicare\t and \TMedicaid\t in 1965. Both public and private insurance coverage favored payment for hospital inpatient care rather than outpatient visits, giving new impetus to the continued growth of hospital facilities (although visits to outpatient clinics and emergency wards also expanded--from 65 million in 1954 to over 180 million in 1970). In recent years, advances in medical technology have increased the range of potential medical cure. For the most part, these new technologies are available only in hospitals. New surgical facilities have encouraged the development of cardiac and vascular surgery; there are now innovative intensive-care units for patients with heart attack, stroke, and chronic lung disease, as well as for those who have suffered severe injuries, especially burns, and for neonatal diseases. Organ transplants and synthetic implants have become almost commonplace. Diagnostic imaging and scanner procedures, ultrasound, and angiography have vastly improved diagnostic techniques, but they have also required even greater use of hospital facilities. TYPES \TOf\t \Lhospital\ls In the mid-1980s there were over 7,500 hospitals in the United States. Most of these were general medical- and surgical-care facilities. Half had fewer than 100 beds. Academic teaching hospitals--which are usually attached to medical schools and have internship and residency programs--accounted for about 10 percent of all hospitals; they were often larger institutions, controlling about 25 percent of the nation's hospital beds. Hospitals operate under one of three types of ownership: they are either voluntary, conducted as nonprofit public enterprises under private management; government, supported by taxes and sponsored by federal, state, county, or city agencies; or proprietary, profit-making institutions financed by investors. The federal government operates hospitals through the Veterans Administration, the Department of Defense, and the armed services as well as administering Public Health Service and Indian Health Service facilities, prison hospitals, and special institutions run by the Alcohol, Drug Abuse and Mental Health Administration. Every state operates one or more hospitals providing care of the mentally ill, the retarded, and tuberculosis patients. Nonprofit hospitals may be run by religious groups or associations of citizens. Profit-making hospitals may be owned by individuals, by groups--often of physicians--or by investor-owned corporations and hospital chains. Since the mid-1970s, hospital chains have proliferated, often through buying or leasing financially pressed municipal or county facilities and university-attached teaching hospitals. The chains have the capital to improve often run-down physical and technological facilities. Questions remain, however, about whether they will freely admit uninsured patients, and whether their need to demonstrate profits for their stockholder can be reconciled with their responsibility to provide top-quality medical care and, at the teaching hospitals, medical education. Hospitals may also be classified by the kinds of services they offer. General hospitals are equipped to treat a variety of common diseases and injuries. Special hospitals are established to treat specific diseases or special groups of patients: psychiatric, maternity, orthopedic, juvenile, and so forth. Short-term hospitals are defined by the American Hospital Association, the industry's central organization, as those with over half of all patients admitted for less than 30 days. All hospitals must be licensed by the states where they are located and must meet state-set standards of cleanliness and safety. A hospital may seek accreditation from the Joint Commission on Accreditation of Hospitals (JCAH), the industry's official accrediting body. To receive accreditation, it must comply with JCAH standards and pass inspection and investigation by a JCAH survey team. Other accrediting organizations evaluate the hospital's clinical laboratories and blood banks. \Thospital\t \TOrganization\t The hospital's board of trustees represents the public's interest and bears legal and moral responsibility for all activities that occur within the institution. The trustees set hospital policy and see to the provision and safeguarding of hospital assets. The administrator, the chief of the medical staff, and the chiefs of the various medical services are directly responsible to the trustees who also approve the medical-staff bylaws, the rules that govern the behavior of staff physicians. The medical staff is usually subdivided into inpatient departments such as medicine, surgery, pediatrics, obstetrics, and psychiatry. Each department has a chief of service, and all medical services are overseen by a chief of staff, who may be appointed by the trustees or elected by the medical staff. Teaching hospitals maintain a paid staff of physicians, residents, and interns. Otherwise, physicians are not usually hired by a hospital, but instead are granted the privilege of practicing there once their professional qualifications are approved. In addition to the standard medical and nursing services, a number of special services have become vital to patient care. Dietetics, the planning of meals based on the knowledge of special dietary requirements for every type of illness, is a major department within a hospital. Special alcoholism and drug units treat the physical and psychological aspects of addiction. \Tphysical therapy\t is essential in the rehabilitation of accident victims. Emergency medicine has become a specialty with established procedures for keeping alive victims of poisoning, drug abuse, heart attacks, and severe injuries from accidents and disasters. In addition, the emergency rooms of many hospitals now provide basic medical care for large numbers of people who use this service, usually, because they do not have access to a physician. Hospital administration is concerned with such matters as finances, plant management, and labor policies. THE ISSUE \TOf\t \Thospital\t \Lcost\ls The passage of Medicare and Medicaid initiated the explosive increase in hospital costs that has occurred over the past two decades. Hospital reimbursement is Medicare's largest expenditure, accounting for almost 70 percent of its total outlays. Between 1966 and 1982 Medicare payments to hospitals increased at an annual rate of about 20 percent, in large part because of the growth in the number of elderly patients and the increased volume of services provided them. With continued growth in the proportion of the elderly relative to the total population, health-care planners must expect continued increases in over-all medical costs. Cuts in federal health entitlement programs and tight fiscal pressures on state and local governments have contributed to an increase in the number of the uninsured. Almost all are under age 65. (Medicare provides coverage to nearly all the elderly.) Many poor people are ineligible for Medicaid--which in theory provides for the "medically indigent"--because of variations in state income and eligibility requirements. Thus, about 13 percent of all Americans have serious problems of access to adequate health care. Although some municipal, public, and private voluntary hospitals provide charity care, most nonurban hospitals--whether publicly or privately owned--offer little to the indigent sick. If public health-care policy does not begin to cover the cost of care for the uninsured, perhaps one-third of all public hospitals will have difficulty remaining in operation. In addition, the growth of the for-profit hospital sector will make it even harder for the uninsured to find treatment, and public and voluntary hospitals will be forced to take up the slack, something neither can afford to do. They, too, may eventually be forced to erect barriers to the poor and uninsured. POSSIBLE \Lsolution\ls \TTo the\t \Tcost\t \Tproblem\t Hospitals have become the mainstay of medical care largely because their expansion has been paid for out of private and government insurance. In recent years employers, who provide most of the private insurance, and the government both have balked at exploding hospital costs, and have sought ways to cut back. Cost-based reimbursement has been the predominant mode of hospital payment, both from private and from government insurance plans, but two major legislative changes affecting reimbursement policy have recently been enacted. The Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) limited the amount that the government would pay per inpatient case and a 1983 Social Security Amendment established fixed prices for Medicare treatment of medical conditions categorized into a system called Diagnosis Related Groups (DRG). The new fixed payment system is viewed as cost-effective because it offers hospitals incentives to decrease the services provided to patients and to shorten the length of inpatient stays. By knowing in advance what payment will be received for an illness that falls within a predefined DRG, hospitals are encouraged to be more efficient in their allocation of resources. In an attempt to reduce unnecessary hospitalization, many hospitals are shifting preoperative diagnostic testing--such as laboratory work, EKGs, and chest X-rays--from inpatient to outpatient preadmission services. Such preadmission testing is reimbursed separately from DRG payments. A growing emphasis on outpatient care in general has motivated many hospitals to become affiliated with Health Maintenance Organizations (HMOs), which offer clients medical and hospital services for a flat yearly fee and strive to reduce their costs by using more outpatient care (see \Thealth care systems\t). Hospitals themselves have enlarged their out-patient functions to include increased outpatient surgical and clinical services. In the late 1980s, total hospital outpatient visits numbered over 250 million annually. Emergency rooms, which now give what amounts to outpatient medical care to large numbers of uninsured patients, received an additional 90 million annual visits. Other cost-control efforts have involved hospitals in arranging at-home care for chronic conditions like Alzheimer's disease, and for other diseases, such as \TAIDS\t, that require specialized, long-term care. Because of reductions in the number of admissions and overall patient days, hospitals are faced with increasing deficits, and many seek other ways to produce income. Some voluntary medical centers are considering profit-making ventures such as retirement housing and hospice care for the terminally ill. (These are also areas in which for-profit hospitals are beginning to invest.) Other hospitals are merging in an attempt to introduce cost efficiencies through resource sharing. BARBARA BERKMAN Bibliography: Aaron, Henry J., and Schwartz, William B., The Painful Prescription: Rationing Health Care (1984); Dowling, Harry F., The City Hospitals: The Undercare of the Underprivileged (1982); Flood, A.B., Hospital Structure and Performance (1987); Granshaw L., and Porter, R., eds. Hospitals in History (1989); Rosenberg, C.E., The Care of Strangers: The Rise of America's Hospital System (1987); Starr, Paul, The Social Transformation of American Medicine (1982).