This paper explores articles and research conducted on nonprofit versus For-Profit Healthcare and Organizations. There are three types of entities that own hospitals, which are: nonprofit, for-profit, and government. However, it can’t be determined if they specialize in different medical services or how their service profits affect certain specializations. More than likely, the for-profits offer profitable medical services that benefit the organization, which would lead to believe that the nonprofits are in the middle, leaving the government with offering the unprofitable services. The for-profits are also quite responsive to the changes associated with service profitability than the nonprofit or government entities.
Therefore, it would be necessary to evaluate the value of nonprofit hospital ownership and differentiate between the service offerings amongst the hospital types. Looking into the ways that for-profit hospitals make profits, it would be necessary to take into consideration the geographical location versus the well insured citizens that are located within the area. This paper also looks into the assumption that all general hospitals are relatively alike in the services provided, regardless of ownership…. but also that these entities would vary in their patient mixture. In my research, this paper is for the recognition of profit making and to introduce the idea that for-profit healthcare and organizations are more opt to decide on which medical services to offer based on the service profitability.
In our country nonprofit hospitals account for a major portion of the urban areas, while the remainder being for-profit or governmental ownership operating under different legal rules. When we evaluate the interests associated within the healthcare industry, we must take into consideration the value it has on today’s society and economy. This issue has been heavily debated in that there have been raising questions as to the fact of the similarities between non-profit organizations and for-profit organizations. In analyzing these issues, it must also show relevance as to the accountability of the evidence and material that supports the policies regarding ownership.
From our standpoint here in the United States, hospitals take the foremost credit as being the largest healthcare organization in the country. When we look into classification however, it can be noted that private hospitals have the ability to be classed as for-profit or non-profit organizations due to independent regulatory rules that separate the two. From a non-profit standpoint, these type organizations are not required to pay sales, income, or property tax.
And to further introduce the non-profit organizations, it is within reason to understand that they were established with the intention of providing specific social services to meet the needs of poor citizens. For this reason, is why not-for-profit healthcare and those hospitals and organizations that are associated within its boundaries… are exempt from paying taxes. This is a major factor as to how and why these type organizations operate. When realizing the importance of non-profit healthcare and organizations, it is fair to say… that although they are deemed to be prestigious organizations, they are often not regarded as such.
For-profit, nonprofit, and governmental organizations operate under different legal rules. These rules would explain how profits are shared and distributed to shareholders in for-profit organizations, and how government and nonprofit hospitals are tax exempt. Although these rules impact operations, they provide the basis as to the similarity in healthcare services rendered… contracting with the same insurers and government payers… operating under the same healthcare regulations… and employ with similar if not the same training and ethical obligations.
Just because an organization may be for-profit, does not mean that they traditionally provide lower quality services and higher costs. However, in some cases where this is a factor, it causes a change in operations in that it creates a negative effect on the availability of healthcare. Nonprofit organizations such as hospitals, often switch to for-profit due to the issues related with their financial instability to operate in that status and remain open. This change allows them to improve their financial standings, reduce Medicare costs, and generate higher revenues. It also allows the investors and shareholders to have a bigger impact on operations and funding.
Due to the rising high costs associated with healthcare, the United States has had an increase in the amount of nonprofit healthcare organizations converting over to for-profit. Since those changes have been made, it has allowed more facilities to remain open, continue offering healthcare to citizens, and functioning to service communities. This also shows face as to why and how nonprofit healthcare organizations offset costs by charging more to their patients that have the ability to pay for services. On the other hand, for-profit healthcare organizations exploit these means as a profitable turnkey business necessity.
However in this case, it makes the profits visible which in turn keep costs down for all patients, and not differentiate between social status. In conclusion, when evaluating avenues for improvement of the financial and operational performance of nonprofit healthcare organizations, it is impertinent that these organizations monitor the contributions required to be made in order to operate under the tax exempt status. When this does not occur, is when fines, closures, and investigations take place ultimately contributing to additional costs and substandard performance.
Just as well when evaluating avenues for improvement of the financial and operational performance of for-profit healthcare organizations, it is impertinent that the options provided to citizens covered by healthcare plans, are up to standards. In doing so, they are provided the best care at reasonable costs due to donations, stockholders, and board members that have a particular interest in the care of the citizens which reflects on the success of the organization and the level of care given.
Anika Clark (2012). Nonprofit vs. for-profit health care: Debate hits home. [ONLINE] Available at: http://www.southcoasttoday.com/apps/pbcs.dll/article?AID=/20120503/NEWS/205030347. [Last Accessed Nov. 20, 2012]. Steven Hill (2011). Non-Profit vs. For-Profit health care: How to Win the Looming Battle Over Cost Control.