What are some business and financial implications of the differences
between community not-for-profit hospitals and large academic
medical centers that may affect staffing, programs offered, and
policies and procedures?
According to the American Hospital Association (2022), more than
half of nongovernment owned community hospitals in the U.S. are
not-for-profit hospitals while nearly 24 percent are for-profit. Non-
profit hospitals are exempt from paying federal, local, and state
income and property taxes and are typically looked at as charities,
while for-profit hospitals are typically owned by investors and run as
a business (Burns, 2021). a However, contrary to popular belief, non-
for-profit hospitals still earn profits. At the same time, many for-
profit hospitals can be more expensive to run, but in many cases
these types of hospitals invest more into advancing medical
technologies, which could be one factor that contributes to these
higher costs (Burns, 2021).
What financial impacts could result if a for-profit organization was
built within your community?
The building of any hospital, whether for-profit or non-profit, would
have a financial impact on any other hospital that was already in an
area. a Despite the title of “non-profit,” non-profit hospitals still can
still make a profit, the same as a “for profit” hospital (Shi & Singh,
2017). a Therefore, building any hospital in the area would create
competition and patients could be lost to other hospitals for a variety
of reasons including dissatisfaction with current services, location,
quality of services, or the types of services available.
a
References
American Hospital Association. (2022). Fast Facts on U.S. Hospitals,
2022. https://www.aha.org/statistics/fast-facts-us-hospitals
Burns, D. (2021, September 21). Nonprofit vs. For-profit Hospitals.
https://www.incrediblehealth.com/blog/nonprofit-vs-for-profit/
Shi, L. & Singh, D. (2017). Essentials of the U.S. Health Care System.
Burlington, Massachusetts: Jones & Bartlett Learning
