How The HMO Act of 1973 Converted Non-Profit Hospitals To For-Profit Businesses

The 1973 HMO Act, signed by Nixon, used federal subsidies and mandates to promote prepaid group plans, while overriding state laws that had blocked them. This forced hospitals into exclusive, discounted contracts with HMOs; unable to survive on shrinking reimbursements, thousands of non-profit and community hospitals converted to for-profit status or sold to investor-owned chains, doubling the for-profit hospital share from 15% in 1970 to over 35% by 1995 and shifting American healthcare from charity-based to shareholder-driven.