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Hospitals and Long-Term Care Facilities

Categories: BusinessCare


Hospitals can be set up as nonprofit or for-profit facilities. The differences between the nonprofit and for profit hospitals will be discussed. Hospitals have experienced different trends in the last thirty years. This paper will identify at least three major trends that have occurred within the hospital sector. Three examples that describe and differentiate the roles of hospitals and nursing homes are providing long-term care. The conclusion of this paper will be a brief critiquing of the current state of long-term care policy in the United States.

Hospitals and Long-Term Care Facilities

The differences between nonprofit and for-profit hospitals: A characteristic as stated by Williams and Torrens (2008) of nonprofit hospitals is that these hospitals do not function under the realm of regular corporate law but under a special provision of the corporate law in each state. It is also noted that nonprofit hospitals also function under special federal and state tax provisions because of recognition of their community service function.

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Other characteristics of nonprofit hospitals are they do not have owners and their governing body is a community based board that has complete authority over operations. Nonprofit hospitals, in general, are not required to pay most of the taxes at federal, state and local levels. Under section 501C (3) of the federal tax code, the non-profits are exempt. Due to this exemption status donations made by individuals are tax deductible. Nonprofit entities are not only expected to care for the destitute and poor but they are also expected to provide a variety of services to the community (Williams & Torrens, 2008).

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Now that the characteristics of the non-profit have been outlined the for-profit entities make-up will be discussed. For profit entities, unlike nonprofit ones, have owners. The owners are issued stocks and these stocks reflect the owner’s equity position. “For- profit entities, including hospitals, may be publicly or privately held” (Williams & Torrens, 2008, p. 186). Stocks for entities for-profit that are publicly held are made available for anyone to purchase. Publicly held for-profit entities are plagued with various accountability and regulation rules that are supervised by the Securities and Exchange Commission at both federal and state level. Williams and Torrens (2008) state that privately held for-profit entities issue stock but the difference in public versus private issuing of stock is that the private for-profit stock is not available for purchase by the general public. For-profit hospitals, in the past, have been owned by the physicians who work in them but due to the astronomical costs of such expenditures as: building, maintaining and operating a hospital in today’s market the trend of physician owned for-profit hospitals is almost extinct. The majority of for-profit hospitals in the United States are part of a large multihospital chain.

The multi chains of hospitals as stated by Williams & Torrens (2008) are publicly traded. For-profit hospitals do not serve only the community but they are also expected to operate at a profit so that the equity investors receive a return on their capital (Williams & Torrens, 2008). Three major trends that have occurred within the hospital sector. One of three major trends that have occurred within the hospital sector is the increase in specialty hospitals. The specialty hospitals focus on such areas as cancer and heart disease as well as profitable fields like orthopedic surgery. The specialty hospitals as stated by Williams & Torrens (2008) show an increase of being owned partially by the physicians who practice in them. Some would make the argument that the specialty hospitals provide the best care while others see these hospitals as entities that “siphon off insured and relatively healthier patients leaving the less profitable and more complicated cases to community general hospitals” (Williams & Torrens, 2008, p. 194).

Concerns raised by the physicians’ ownership of the specialty hospitals include but not limited to are that the financial incentives will affect the treatment decisions (i.e. diagnostic services) and also that the physicians will treat the less complicated but yet more profitable health care cases and leave the biggest burden of caring for the less fortunate, financially challenged and uninsured individuals to the community and public hospitals (Williams & Torrens, 2008) Another trend that has occurred within the hospital sector is in the field of technology. “Technology has shaped the physical and operational structures of hospitals, has affected the lives of patients and families, and has provided a delivery vehicle for physicians in clinical practice” (Williams & Torrens, 2008, p. 195). It is technological research that allows for the services hospitals provide for example anesthesia and antisepsis laid the ground work for surgical care and imaging technology has impacted effective intervention for individuals seeking care in a hospital atmosphere. Technology has affected a vast array of individuals: obstetric patients, those in need of pediatric care and terminally ill patients just to name a few.

Advanced technology has led to development “increased specialization, clinical practices, expansion of specialized services, new medical and surgical specialties, and treatments for many diseases for which little curative or other care could be provided” (Williams & Torrens, 2008, p. 195). While continued advance technology leads toward continuous improved health care it also brings along with it problems, especially for the hospitals. The hospitals are immensely gratified by the increased technology and its application to improve overall general health but along with the benefits comes complications. Hospitals are expected to provide the most up to date technology but at the most effective pricing to please their customers, patients and physicians. This presents a major challenge to hospitals (Williams & Torrens, 2008) Academic medical centers are another trend that has occurred within the hospital sector. Academic medical centers are composed of medical schools and their primary teaching hospitals. The “academic medical centers provide tertiary, secondary, and primary care but have a principal focus on biomedical research, teaching of medical residents and medical students, and often an array of other professional training, research, and services activities” (Williams & Torrens, 2008, p. 196).

Unlike other hospitals, the academic medical center does not have top priorities of financial efficiency and customer satisfaction. Great demands are placed on these facilities by physicians and researchers to provide the latest technology and staffing for the assurance of teaching and clinical investigation. According to Williams and Torrens (2008) the long-term strengths and successes of our health care systems depends largely on the success of the academic medical centers to achieve their mission. Three examples that describe and differentiate the roles of hospitals and nursing homes in providing long term care. The nursing home facility is for patients who need extended care because they are very sick or unable to function without continued nursing and supportive services in a formal health care facility. These patients are sick and/or are in need of assistance but they are not ill enough that they require the intense treatment and care offered at a hospital. According to Williams and Torrens (2008) about forty-seven percent of all nursing home facility care is paid for by Medicaid and residents and their families pay approximately one-third of the cost for the facility services. In recent years the length of time one stays at a nursing home has greatly decreased.

Even with the decrease in stay there is still a fifty percent chance of an individual in his/her lifetime having to spend some time in a nursing facility. Both of these previous mentioned trends is reflective of the nursing facilities moving toward becoming more technologically sophisticated as well as being able to function as more of a short term temporary residence for patients in between the hospital and going home (Williams & Torrens, 2008). Hospitals are designed to take care of the more acute problems and emergencies. Hospitals provide a wide array of outpatient services. The outpatient services range from “rehabilitation to mental health counseling to outpatient surgery” (Williams & Torrens, 2008, p. 205). Unlike the nursing home facility the primary source of payment for hospital stay and services is Medicare and private insurance and very little payment comes from individuals. The current state of long-term care policy in the United States.

Medicare provides financing for medical care for nearly all elderly Americans and others with certain disabilities but this does not hold true for long-term care. The majority of individuals needing long term must depend on family and friends and sometimes the community they live in. There is a lot of work to be done in the United States as it relates to the financing of long term care for every needy individual (Williams & Torrens, 2008). There is no clear and precise policy in the United States for long-term care but there are different provisions within Medicare and Medicaid that provide for long-term services for some (not all) individuals in need of it. While the financing of long-term care has been and continues to be a challenge for the United States there have been strives in the care coordination of long-term patients.

The care coordination that has emerged through the years for long term care patients appears to be relatively effective. “Quality is enhanced when information is communicated among all the professionals caring for a person, and efficiencies are achieved when duplication of services is avoided” (Williams & Torrens, 2008, p. 211). Case management, which is a process that encompasses the following: case identification, assessment, care planning, service arrangement, monitoring and reassessment enables one professional individual to work with the family to coordinate and obtain all of the services that the long term care patient may need. Case management has proven to have one of the most positive effects of improving long-term care (Williams & Torrens, 2008).


Williams, S. J., & Torrens, P. R. (Eds.). (2008). Introduction to health services: 2010 custom edition (7th ed.). New York: Cengage Delmar Learning.

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Hospitals and Long-Term Care Facilities. (2016, Aug 31). Retrieved from

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