The Restructuring of the Hospital Services Industry
Prior to 1870, hospitals were nonprofit institutions serving the poor, the homeless, and the insane [Starr 1982, 144]. Medicine was practiced outside of the hospital by peripatetic physicians attending patients at their home; hospitals served those without resources to pay for the services of a physician. 1 During the period 1870-1910, hospitals were transformed from the periphery of health care to the center [Starr 1982, 144]. Several reasons account for this transformation [Temin 1988, 80-83]. First, improvements in hospital technologies and new surgery techniques made hospital visits more palatable for patients (and less life threatening). Second, the newly developed germ theory of disease created a need for doctors to work in laboratories in order to diagnose and treat disease. Third, increased urbanization divorced medical care from the home and led to an increased demand for hospital services by the urban middle and working class.2