Among 5,200 non-federal hospitals in the US, 3,000 are nonprofits, 1,300
for-profit, and 1,000 operated by state and local governments (Kahn 2019).
Non-profit hospitals, for-profit hospitals, and academic medical centers
should all have the same end goal, which is to provide the best care for their
patients, performance should not be compromised based on status.
A non-profit healthcare facility does not have to pay state and federal taxes
and their profits are returned to the hospital for its operations rather than to
shareholders. In order to keep their tax exempt status, federal law requires
that hospitals provide community benefits, specifically defined by the
Internal Revenue Service (IRS). Community benefit includes charity care, the
uncompensated cost of providing Medicaid, the education and training of
health care professionals, and other efforts that include promoting health
(IHA 2022).
Although non-profit and for-profit hospitals must meet some community
needs, for-profit hospitals must balance community service with shareholder
returns; operational efficiencies drive decision making, they also may be
more concerned with quarterly returns therefore make short-term decisions
that may not align with the needs of the communities they serve. (Kahn
2019) For-profit hospitals may have nicer and updated equipment than non-
profit, however, they may also charge patients more money because of this
(HMD 2022). Culture may also be different when it comes to non-profit and
for-profit. While quality care is a priority for both, the culture at for-profits is
business-driven. The culture at nonprofits is service-driven (Cheney 2016).
Academic medical centers teach medical students and provides them with
hands on experience. Anyone can be admitted to these facilities but there are
some pros and cons. One pro is doctors who work at academic medical
centers are usually paid on salary. That means the emphasis isn't the quantity
of patients they see but more on the quality of care they provide. Access to
treatments and research trials that patients may not otherwise be able to get
from a private doctor is also a pro. Another good thing, and one that I see at
the medical center I work at is in rural regions (such as mine) our hospital is
smaller and cannot offer all of the services large hospitals can. We are
affiliated with a larger, regional, academic system. Sometimes this extended
help will be managed through telemedicine and patients can still receive the
care they need without traveling. Of course, a con to academic centers is that
the students are learning therefore have less experience, which means the
care received, especially with a new physician right out of school may not be
the best (Torrey 2020)
Overall, a health system’s non-profit or for-profit status does not necessarily
determine profitability. Factors such as the health system’s location, the size,
the share of the local market, the scope of services they offer and the payer
mix overall plays a huge factor in their success (Masterson 2017).
:
IHA (2022).:NOT FOR PROFIT HOSPITALS:retrieved
from:https://www.ihaconnect.org/iha-advocacy/Issues/Pages/Not_for_Profit.aspx
Kahn, K. (2019):How Do Nonprofit and For-Profit Hospitals Differ? It’s Complicated."Retrieved
from:https://nonprofitquarterly.org/how-do-nonprofit-and-for-profit-hospitals-differ-its-complicated/
Cheney, C. (2016).:DIFFERENCES BETWEEN NFPS AND FOR-PROFITS ARE MARGINAL."Retrieved
from:https://www.healthleadersmedia.com/finance/differences-between-nfps-and-profits-are-marginal
Masterson, L. (2017).:Nonprofit, for-profit hospitals play different roles but see similar financial struggles."Retrieved from
https://www.healthcaredive.com/news/nonprofit-for-profit-hospitals-play-different-roles-but-see-similar-financ/442425/
Torey, T. (2020):Pros and Cons of Academic Hospital Care."Retrieved from:https://www.verywellhealth.com/teaching-or-
university-hospital-2614877#:~:text=Academic%20medical%20centers%20are%20those,to%20further%20those
%20students'%20educations .
HMD. (2022).:Are non-profit or for Profit Hospitals Better.:Retrieved from https://www.healthcare-management-
degree.net/faq/are-non-profit-or-for-profit-hospitals-better/#:~:text=For%2Dprofit%20hospitals%20can
%20lawfully,financial%20or%20health%20insurance%20status.
