The difference between a non-profit and profit hospitals is the patients that are accepted. Non-
profits will accept anyone no matter who their insurance carrier is or of they have insurance at all
(Writing, n.d.). For profit hospitals will only accept certain insurances that they can submit claims
through to be paid. With that in mind, these implications can affect staffing, the type of programs
offered, and policies and procedures. Financially, the budget will affect how much they can offer for
salaries and equipment used within the different types of hospitals. Privately owned hospitals will
have their own set of policies and procedures on top of the general regulations that non-profits use.
Academic medical centers are linked with a medical school. The financial impacts of a for-profit
organization in the community could decrease revenues and the number of patients our
organization sees daily. The benefits of being an academic facility are larger budgets from donations,
grants/government funding, and tax deductions to name a few. c
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?
From the get go many not-for-profit hospitals have the incentive of being exempt on all taxes which
include federal, state, and local taxes. Even though nonprofit pay no taxes somehow financially they
are all in debt. However, while they may not have the funds for top of line equipment this does not
mean the quality care is worse, in fact it’s better. “The icing on the cake is that the lower-cost care
does not come with a corresponding drop in quality level. Statistics show that despite charging
more, for-profit hospitals perform worse than nonprofit hospitals when it comes to treating
common illnesses, and, consequentially, have higher death rates.” (Healthcare Management Degree
Guide. 2021.)
Because of tax exempts nonprofit hospitals are obligated to provide services and programs to
include vital community health services which large academic medical centers do not. One of many
are alcohol and drug rehabilitation and psychiatric programs. “They may also provide their
communities with intensive care units (ICU), trauma centers, burn units and organ transplant
centers, which may not be available at for-profit hospitals, due to the high cost to operate them with
little potential for profit.” (Clairvoyance., n.d.) The care does not end there. Many partnerships are
formed in their community for support in other medical and educational organizations for nutrition,
diabetes, and cancer groups.
Nonprofit hospital is usually training and teaching facilities. Which mean more students and more
staff to treat patients, even though they ae not licensed physicians and in their residency term they
can treat patient with their consents. “These new graduates have the latest knowledge in healthcare
and medical research, and they may spot things or identify new problems that older healthcare
providers miss.” (Healthcare Management Degree Guide. 2021.)
It is not all a bed of roses for the non-for-profit hospitals. They fall short when dealing with polices
on medical billing, records, and administrative issues. AMCs consolidate and streamline these
services across all departments within all their locations while non-profit fail miserably to do the
same because of cost. “The lack of clear policies may confuse patients, especially those who have a
low education level and who don’t understand the complicated paperwork and billing processes.”
(Healthcare Management Degree Guide. 2021.)
What financial impacts could result if a for-profit organization was built within your community?
When a profit hospital is built within your community, they can attract investors. “Investor-owned
companies have powerful motives for expansion.” (Institute of Medicine. 1986.) Investors can take
away capital from the community and potential patients from the nonprofit hospitals. For-profit
hospitals can return profits to stockholders, as well as finance in the healthcare system. This can
cause a loss for non-for-profit hospitals. “Thus, not-for-profit organizations share with for-profit
organizations the need to generate operating surpluses for building reserves that can be used as
working capital and for future renovation, equipment purchases, and new services.” (Institute of
Medicine. 1986). The market share for hospitals can move not for profit out of the running and
impede the growth for them. Now more than ever the profit hospitals are taking over the new
markets than before.
References
Institute of Medicine (US) Committee on Implications of For-Profit Enterprise in HealthCare. (1986,
January 1). Summary and conclusions. For-Profit Enterprise in Health Care. Retrieved March 30,
2022, from https://www.ncbi.nlm.nih.gov/books/NBK217912/
Are non-profit or for-profit hospitals better? Healthcare Management Degree Guide. (2021, August
4). Retrieved March 30, 2022, from https://www.healthcare-management-degree.net/faq/are-non-
profit-or-for-profit-hospitals-better/
Carevoyance Data & Insights Blog. Carevoyance. (n.d.). Retrieved March 30, 2022, from
https://www.carevoyance.com/blog
Writing, A. (n.d.). Business & Financial Differences Between Profit & Nonprofit Hospitals | Small
Business - Chron.com. Small Business - Chron.Com. Retrieved March 31, 2022, from
https://smallbusiness.chron.com/business-financial-differences-between-profit-nonprofit-hospitals-
492.html
