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. a 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). a 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). a
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.
