Nonprofit and for-profit hospitals Essay

Custom Student Mr. Teacher ENG 1001-04 9 November 2016

Nonprofit and for-profit hospitals

1. Describe the differences between nonprofit and for-profit hospitals The Non-profit hospitals were established for charitable purposes and tend to be larger, and are more likely to be teaching hospitals. They also are responsible and accountable to the communities they serve. They are governed by leaders of the communities they serve. Earnings received from the non-profit hospitals are reinvested to improve quality and care provided at the hospitals, and also invested in community programs, such as providing no fee or discounted fees to the uninsured and low income for health care services. Non-Profit healthcare organizations mission is to serve communities by providing healthcare without regard for a patient’s ability to pay. Because non-profit hospitals are a tax exempt organizations they must follow specific tax codes to obtain financing.

They do have access to tax-exempt bond financing and can offer a tax-deduction for charitable gifts. (Barton, 2010). Other external sources of financing available would be FHA loans, which are federally insured. These loans could be used for construction financing, remodeling and expansion For-profit hospitals are legally responsible to their owners and stockholders and performance is based on profitability and the return on equity to its shareholders. Profits from earnings can be distributed to owners and stockholders. There are also tax treatment differences for the for-profit and non-profit hospitals. (CBO, 2006)

The non-profit hospitals are exempt from federal and state corporate income taxes, as well as local sales and property taxes. The for-profit hospitals are required by law to pay federal and state corporate taxes. For-profit Hospitals do not receive tax exemptions and are not required to meet community-benefit standards Rising healthcare costs have created financing issues for all hospitals, non-profit and for-profit. Both will have to seek funds and increased technology to reduce these costs and continue to provide quality healthcare to everyone.

2. Describe at least 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 show an increase of being owned partially by the physicians who practice in them. 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 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.

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. 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”. Academic medical centers are another trend that occurred within the hospital sector. Academic medical centers comprises of medical schools and their primary teaching hospitals.

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. The long-term strengths and successes of our health care systems depend largely on the success of the academic medical centers to achieve their mission.

3. Give three examples that describe and differentiate the roles of hospitals and nursing homes in providing long-term care 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. 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. 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”. 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

4. Critique 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.(William & Torrens 2008) There is no clear 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 individuals in need of it. While the financing of long-term care has been 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 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. 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. (William & Torrens, 2008)


Williams, S. J., & Torrens, P. R. (Eds.). Introduction to health services: 2010 custom edition Barton .P .L. (2010) Understanding the U.S .Health service system 4th edition

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