Some business differences between a community not-for-profit hospital and a large academic medical center
is that not-for-profit facilities are voluntary hospitals. They are exempt from paying any federal, state, or local
taxes and they provide essential community benefits, charity, training, or research. On the other hand,
academic, or teaching hospitals must offer graduate residency programs where the primary goal is to train
physicians. Teaching hospitals tend to operate several intensive care units, have the latest technology, and
offer more specialty doctors than subspecialties. They usually offer more services that aren't found in other
institutions like burn care, trauma care, and organ transplantation (Shi & Singh, 2019). With them having more
specialty care I would imagine that prices would be more than at a not-for-profit hospital. If a for-profit
organization were to be built within the community where I am working, some financial differences would
arise. A private for-profit hospital would be owned by a private investor, corporations, or partnerships. They
benefit the stockholders. Most private for-profit facilities are smaller and specialize in heart or orthopedic
surgeries and usually perform favorably compared to other hospitals (Shi & Singh, 2019). Furthermore, a study
published in Health Affairs in 2021 found that, in aggregate, nonprofit hospitals spent 60 percent less than
for-profit hospitals on charity care as a share of total expenses (Rapfogel & Gee, 2019). However, being an
academic facility has its financial benefits as well. They can probably change more for their services just
because there are not a lot of physicians that can help depending on the circumstances. They also would have
the best equipment to serve patients, however, the patients might have to travel or stay for longer times. That
also would benefit the academic institution, specifically when they are able to get grants on research for
certain medical issues.
Rapfogel, N., & Gee, E. (2019, February 22). How nonprofit hospitals can support communities and Advance
Public Health. Retrieved April 1, 2022, from https://www.americanprogress.org/article/nonprofit-hospitals-
can-support-communities-advance-public-health/
Shi, L., & Singh, D. A. (2019). Chapter 8- Hospitals. In Essentials of the U.S. health care system (Fifth ed., pp.
182-204). Burlington, MA, MA: Jones & Bartlett Learning.
