In 1932, during the nadir of the Great Depression, a hospital census conducted by the Council on Medical Education and Hospitals revealed a shift of usage from privately owned hospitals to public institutions. There were 6,562 registered hospitals, a decrease from the 6,613 reported by the previous census. Of the 776 general hospitals run by the government, 77.1 percent occupied at capacity. By contrast, only 55.9 percent of the 3,529 nongovernmental general hospitals were filled. Still, between 1909 and 1932, the number of hospital beds increased six times as fast as the general population (Figure 1), leading the Council to assert in 1933 that the country was “over hospitalized.”  Meanwhile, patients were turning to a new method of paying for hospital charges as Blue Cross insurance plans became more and more popular and accounted for a greater percentage of hospital financing.
Figure 1: Hospital Capacity and General Population, 1872-1932
Source: “Hospital Service in the United States: Twelfth Annual Presentation of Hospital Data by the Council on Medical Education and Hospitals of the American Medical Association,” JAMA 100, 12(March 25, 1933): 887.
A surge of demand occurred after World War II. Although federal, state, and local governments had given some support to hospitals earlier in the century, the government became increasingly important in the health care system after the war, adding huge amounts of money to hospital enterprises: The Hill Burton Act in 1947 provided funds for the construction and expansion of community hospitals. The National Institutes of Health expanded in the 1950s and 1960s, stimulating both for-profit and non-profit research. Moreover, Medicare and Medicaid, established in 1965, provided money for the care of the aged and the poor, respectively. 
For all its support, however, the costs of hospital care grew even faster. As Rosemary Stevens argues, from its inception, Medicare costs surpassed projections. In 1965, for example, Medicare costs were projected to be $3.1 billion. Five years later, however, they reached $5.8 billion, an increase of 87 percent. Less than 10 percent could be linked to expanded utilization; 23 percent to rapid economic inflation; and the remaining two thirds to “massive expansions in hospital payroll and non-payroll expenses —including ‘profits,’” with a doubling of average patient-day costs between 1966 and 1976. 
In the 1950s, 1960s, and 1970s, rising public expectations for nursing and medical attendance as well as the recognition by nurse and physician reformers that some patient-care procedures were unsafe drove a reorganization of nursing care. In the hospitals themselves, intensive care units grew and machines became ever more prevalent. Both of these developments required greater expertise among nurses. Nursing education began the move from 3-year hospital-based diploma programs to 4-year baccalaureate programs in colleges and universities. By 1965, over 90 percent of large hospitals and 31 percent of smaller ones had intensive care units staffed by increasingly expert nurses. 
In 1970, the American Hospital Association listed 7,123 hospitals in the United States, up 247 from 1960. During this decade, however, a major shift had occurred in hospital utilization. The number of beds in federal, psychiatric, tuberculosis, and other long-term care facilities had declined, while, aided by government funding, community hospitals increased their bed capacity by 32.7 percent (Table 2). These nonfederal, short-term care institutions that were controlled by community leaders and were linked to the community’s physicians to meet community needs represented 82.3 percent of all hospitals, contained over half of all hospital beds, and had 92.1 percent of all admissions.
Table 2: Selected U.S. Hospital Statistics, 1960 and 1970
Source: “The Nation’s Hospitals: A Statistical Profile," Hospital Statistics 45, Part 2 (August 1, 1971): 447.
Community hospitals also offered more comprehensive and complex services such as open heart surgery, radioisotope procedures, social work services, and in-house psychiatric facilities.  The growth of these hospitals, along with the advent of new treatments and new technologies, contributed to escalating in-patient hospital costs, leading the federal government to impose wage and price controls on hospitals in 1971. Indeed, the years after 1965 and the passage of Medicare and Medicaid were pivotal for everyone in health care because of increased government regulation. Medicare incorporated a prospective payment system in 1983, with federal programs paying a preset amount for a specific diagnosis in the form of Diagnostic Related Groups, or DRGs.  As third party payers gained power and status, DRGs radically changed Medicare reimbursements. They also considerably altered hospital decisions, with a focus changing toward greater efficiency. 
The 1980s also witnessed the growth of for-profit hospital networks, resulting in increased vulnerability of smaller not-for-profit institutions. More than 600 community hospitals closed.  It was at this time that both for-profit and not-for-profit institutions began forming larger hospital systems, which were significant changes in the voluntary hospital arena. A system was a corporate entity that owned or operated more than one hospital. This also has come about with the advent of DRGs as single health care facilities seek to affiliate to cut down on duplication of costs.
Cost containment was the theme of hospitals in the 1990s. The balance of power in these institutions shifted from caregivers to the organized purchasers of care, with Medicare and Medicaid becoming a huge governmental influence in all types of hospitals. In the private sector, insurance companies began to take a more active role in managing hospital costs. Health maintenance organizations, which contracted with a network of providers for discounted prices, increased in importance. The focus of care shifted to outpatient services, ambulatory care centers for acute care, and hospices and nursing homes for the chronically ill.  Then in 1997, the Balanced Budget Act decreased Medicare payments to hospitals by $115 billion over five years, including a projected $17 billion reduction in Medicare payments to hospitals. 
At the turn of the twenty-first century, rising costs have forced many hospitals to close, including public hospitals that have traditionally served as safety nets for the nation’s poor. Some of the larger not-for-profit corporations have bailed out public facilities through lease arrangements, such as the one between the Daughters of Charity’s Seton Medical Center and the public Brackenridge Hospital in Austin, Texas, that occurred in 1995.  These types of arrangements have had their own problems, however, such as the complications that arise when a large secular organization such as Brackenridge tries to join forces with a hospital whose policies are dictated by its religious affiliation.
If the professionalization of nursing has had the important effect on the quality of the hospital experience that Charles Rosenberg has suggested, the changes in the nature of hospitals have had a profound effect on the profession of nursing, since the vast majority of nurses practice in a hospital setting. The future of both the hospital as an institution and nursing as a profession will depend on the decisions we make in the coming years about how health care is provided and to whom.
 Guenter B. Risse, Mending Bodies, Saving Souls: A History of Hospitals (New York: Oxford University Press, 1999).
 Vern L. and Bonnie Bullough “Medieval Nursing,” Nursing History Review 1 (1993): 89-104.
 Nancy G. Siraisi, Medieval and Early Renaissance Medicine: An Introduction to Knowledge and Practice (Chicago: University of Chicago Press, 1990).
 Risse, Mending Bodies.
 Paul Starr, The Social Transformation of American Medicine (New York: Basic Books, 1982); James H. Cassedy, Medicine in America: A Short History (Baltimore: Johns Hopkins University Press, 1991).
 Starr, The Social Transformation of American Medicine; Charles E. Rosenberg, The Care of Strangers: The Rise of America’s Hospital System (Baltimore: Johns Hopkins University Press, 1987).
 Barbra Mann Wall, “Healthcare as Product: Catholic Sisters Confront Charity and the Hospital Marketplace, 1865-1925,” in Commodifying Everything: Relationships of the Market, ed. Susan Strasser, 143-68 (New York: Routledge, 2003).
 Rosenberg, Care of Strangers, 8.
 Rosenberg, Care of Strangers; Starr, The Social Transformation of American Medicine; Cassedy, Medicine in America.
 Rosemary Stevens, “ ‘A Poor Sort of Memory’: Voluntary Hospitals and Government before the Depression,” The Milbank Memorial Fund Quarterly, Health and Society 60 (1982): 558.
 U.S. Bureau of the Census, Benevolent Institutions, 1910 (Washington, D.C.: Government Printing Office, 1913): 69.
 Rosenberg, Care of Strangers, 110, 121; Starr, Social Transformation, 170-71.
 Rosenberg, Care of Strangers; Wall, Unlikely Entrepreneurs.
 “Hospital Service in the United States: Twelfth Annual Presentation of Hospital Data by the Council on Medical Education and Hospitals of the American Medical Association,” Journal of the American Medical Association 100, no. 12 (March 25, 1933): 887.
 Daniel Callahan and Angela A. Wasunna, Medicine and the Market: Equity v. Choice (Baltimore: Johns Hopkins University Press, 2006).
 Rosemary Stevens, In Sickness and in Wealth: American Hospitals in the Twentieth Century (Baltimore: Johns Hopkins University Press, 1989, 1999), 286-87.
 Julie Fairman and Joan Lynaugh, Critical Care Nursing: A History (Philadelphia: University of Pennsylvania Press, 1998).
 “The Nation’s Hospitals: A Statistical Profile, Hospital Statistics 45, Part 2 (August 1, 1971): 447.
 Phil Rheinecker, “Catholic Healthcare Enters a New World,” in Christopher Kauffman, A Commitment to Healthcare: Celebrating 75 Years of the Catholic Health Association of the United States, (St. Louis: The Catholic Health Association of the United States, 1990), 44; Mike Brennan, “Hospitals Competed in Changing Times,” Everett Herald, August 15, 1993, n.p.
 Harry A. Sultz and Kristina M. Young, Health Care USA: Understanding Its Organization and Delivery (Sudbury, MA: Jones and Bartlett Publishers, 2006).
 Thomas R. Prince and Ramachandran Ramanan, “Operating Performance and Financial Constraints of Catholic Community Hospitals, 1986-1989,” Health Care Management Review 19, no. 4 (1994): 38-48.
 Stevens, In Sickness.
 Dana Beth Weinberg, Code Green: Money-Driven Hospitals and the Dismantling of Nursing (Ithaca, NY: Cornell University Press, 2003).
 Kim Sue Lia Perkes, “Seton, Austin, working on Brackenridge lease,” Austin American Statesman, August 20, 1998.
Barbra Mann Wall is an Associate Professor of Nursing, the Evan C. Thompson Endowed Term Chair of Excellence in Teaching, University of Pennsylvania, School of Nursing and Associate Director of the Barbara Bates Center for the Study of the History of Nursing.