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The Role of the Capital Markets in Restructuring Health Care

The Role of the Capital Markets in Restructuring Health Care Page 1019 J. B. Case Western Reserve University Who would have predicted at the time of the Arrow article in 1963 the growth in assets invested in health care that we have seen1 fueled by an unprecedented use of tax-exempt debt, retained earnings, and new stock? Enfranchisement of the formerly uninsured through Medicaid and Medicare plus the continued growth of private health insurance have given marginal providers the cash flow that allowed this dynamic growth in capital investment while substantial subsidies lowered their financing cost. Yet it is not clear whether access to new sources of funds precipitated the restructuring of health care or the demand for capital2 was simply the result of fundamental need. Irresponsible investments by managers certainly have occurred.3 Yet once the industry embraced capitalism’s largess, This essay was supported by Grant No. 28665 from the Robert Wood Johnson Foundation’s Investigator Awards in Health Policy Research Program. The opinions and conclusions expressed in this article are solely those of the author and do not necessarily reflect those of the foundation. 1. The Bureau of Economic Analysis, U.S. Department of Commerce (www.bea.doc.gov), reports that net fixed assets have grown to a level five times higher proportionally http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Health Politics, Policy and Law Duke University Press

The Role of the Capital Markets in Restructuring Health Care

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References (14)

Publisher
Duke University Press
Copyright
Copyright 2001 by Duke University Press
ISSN
0361-6878
eISSN
1527-1927
DOI
10.1215/03616878-26-5-1019
Publisher site
See Article on Publisher Site

Abstract

Page 1019 J. B. Case Western Reserve University Who would have predicted at the time of the Arrow article in 1963 the growth in assets invested in health care that we have seen1 fueled by an unprecedented use of tax-exempt debt, retained earnings, and new stock? Enfranchisement of the formerly uninsured through Medicaid and Medicare plus the continued growth of private health insurance have given marginal providers the cash flow that allowed this dynamic growth in capital investment while substantial subsidies lowered their financing cost. Yet it is not clear whether access to new sources of funds precipitated the restructuring of health care or the demand for capital2 was simply the result of fundamental need. Irresponsible investments by managers certainly have occurred.3 Yet once the industry embraced capitalism’s largess, This essay was supported by Grant No. 28665 from the Robert Wood Johnson Foundation’s Investigator Awards in Health Policy Research Program. The opinions and conclusions expressed in this article are solely those of the author and do not necessarily reflect those of the foundation. 1. The Bureau of Economic Analysis, U.S. Department of Commerce (www.bea.doc.gov), reports that net fixed assets have grown to a level five times higher proportionally

Journal

Journal of Health Politics, Policy and LawDuke University Press

Published: Oct 1, 2001

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