A threat or a promise: acquisition of teaching hospitals by investor-owned chains

In the early 1980s, acquisition of a small number of teaching hospitals by investor-owned chains raised the spectre of a for-profit takeover of teaching institutions. Drawing on experience to date, as well as interviews with affected parties, this article assesses the likely scope of such acquisitions and their impact on the education, research, and indigent care that teaching hospitals provide. Our assessment concludes that relatively few teaching hospitals are likely to satisfy the financial criteria chains apply to acquisitions; that hospitals with modest rather than extensive commitments to education and research are most likely to satisfy these criteria; and that terms of sale typically enhance, rather than undermine, these institutions' resources for research, education, and, to a lesser extent, indigent care, at least in the short run. In the long run, continuation of these activities is more likely to be a function of third-party payment policies than of proprietary versus nonprofit hospital ownership.