When a patient needs urgent care, they don’t really think about
whether the hospital they are going to is a for profit or nonprofit
hospital. Regardless of differences, they are both required to offer
quality care and offer charity (Materson, 2017). Nonprofit hospitals
serve the healthcare needs of the community and do not pay taxes
and instead, they must provide evidence of community benefits to
avoid county, state, and federal taxes (Materson, 2017). All profits
obtained must be invested back to the organization which unlike for-
profit hospitals, nonprofits are unable to raise capital. This results in
increase in patients on government funded programs like Medicare
which leads to lower payments, thus fewer patients on private
insurances resulting in less money for care. According to the
American Hospital Association (AHA) survey, data shows that various
services are not offered in as many for-profit hospitals as in not-for-
profit hospitals of similar size (American Hospital Association, 2020).
Meanwhile, for profit hospitals benefit from investors’ money and
have more flexibility when it comes to services they offer, often
seeking more profitable ones (Materson, 2017). They also can raise
capital via investors and are able to return the profits to the investors
as well as capable of investing in the healthcare systems. About their
medical staffs, investor-owned hospitals accept a slightly higher
proportion of physician-applicants who have slightly a higher
proportion of physicians who are not board certified (Institute of
Medicine (US) Committee on Implications of For-Profit Enterprise in
Health Care, 2020). Although most of these centers are physician
owned, they often are accessible to patients, like through convenient
locations and hours. Many for profit centers require payment at the
time service is rendered and accepting patients only on referral—that
allow the organization to provide services almost exclusively to
paying patients (Institute of Medicine (US) Committee on
Implications of For-Profit Enterprise in Health Care, 2020).
References:
1. Masterson, L. (2017, May 25). Nonprofit, for-profit hospitals play
different roles but see similar financial struggles. Healthcare Dive.
Retrieved March 27, 2022, from
https://www.healthcaredive.com/news/nonprofit-for-profit-
hospitals-play-different-roles-but-see-similar-financ/442425/
2. American Hospital Association. Fast Facts on U.S. Hospitals.
2020. Retrieved from: https://www.aha.org/statistics/fast-
facts-us-hospitals.
3. Institute of Medicine (US) Committee on Implications of For-
Profit Enterprise in Health Care; Gray BH, editor. Washington
(DC): National Academies Press (US); 2020.
