An analysis of interregional variation in general hospital expenses
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The dynamics of the medical care industry cannot escape the interest of the economist. Within the past one hundred years, the primary production unit in the industry, the hospital, has advanced from a practitioner's workshop which would have been familiar to Hippocrates or Galen to an efficient armamentarium in which the infectious diseases have been conquered and healing and relief from pain have been placed within the reach of the majority of the afflicted. Within the memory of men living today, the hospital has emerged from four millenia of magic and superstition into an era in which it is the iatrieon for practitioners of one of the most rigorous of scientific disciplines end the repository of the medical resources of the modem community. As the tools of medical science multiplied and simultaneously became more powerful, the nature of the hospital shifted from that of a hotel for the sick to that of a complex, departmentalized medical "factory", and the locus of patient care shifted from the home to the hospital. Today's hospital performs a four-fold function in the community. It is simultaneously a workshop for the physician, a center for medical and technical education, a laboratory for medical research and a repository for and source of community health resources. Community institutions of this type, which collectively provide what the American Medical Association fondly refers to as the "Highest Quality Medical Care in the World", are not provided gratis to society. Concomitant with the scientific and technological advances which have made the American hospital system the envy of most of the world has come a spectacular increase in the costs of supplying this hospital care.
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