This topic hits home because my department is currently in a
transition from a not-for-profit to a large medical center. Before the
current company took over the entire hospital was not-for-profit, but the
psychiatry outpatient office was not a part of that merger. When I
transferred into the department, I found the situation very odd. The
outpatient office needed a new printer, but we couldn’t just order it
there were a lot of hoops to jump through. This was my first
introduction to not-for-profit. Nonprofit hospitals are community-
oriented institutions, driven by mission rather than shareholder returns
(Kahn, 2019). Our outpatient office was able to put together a program
where doctors go into patients’ homes for sessions. This program helps
patients that were either unable to leave their homes or unwilling to due
to their illness. Now that we are in the middle of a transition there is
talk of ending the program. For-profit hospitals must balance
community service with shareholder returns; operational efficiencies
drive decision-making (Kahn, 2019). Nonprofit hospitals tend to plan for
continued viability over the long-term; for-profit hospitals concerned
with quarterly returns make short-term decisions that may not align with
the needs of the communities they serve (Kahn, 2019).
A community that taxes for-profit hospitals benefits because
it will be able to tax its citizens and businesses at a lower rate than can
a community that receives the same services from a nonprofit hospital
that does not pay taxes (Nicholson, Pauly, Burns, Baumritter, & Asch,
2000). Most for-profit facilities are debt-free compared to not-for-profit
facilities. For example, Mercy Hospital on Chicago’s southside was a
not-for-profit hospital that was catholic base and run by nuns. The
hospital has been sold a few times to keep the doors open. Last spring
Mercy Hospital and Medical Center had finalized a deal to sell its facility
for $1 to a Michigan-based not-for-profit, in a deal that promises to keep
the hospital open (Kelly, 2021). A few short months later, I began
receiving calls from Mercy patients seeking a therapist. I could not find
any documentation that the hospital has closed, but when I drive by at
night there are not many lights on.
References
Kahn, K. (2019, September 10). How Do Nonprofit and For-Profit Hospitals Differ? It’s
Complicated. Retrieved from NPQ: https://nonprofitquarterly.org/how-do-nonprofit-and-
for-profit-hospitals-differ-its-complicated/
Kelly, S. (2021, April 3). Mercy Hospital finalizes sale to keep doors open in Bronzeville. Retrieved
from Chicago Suntimes: https://chicago.suntimes.com/2021/4/3/22365497/mercy-
hospital-sale-finalized-insight-chicago
Nicholson, S., Pauly, M. V., Burns, L. R., Baumritter, A., & Asch, D. A. (2000). Measuring
Community Benefits Provided By For-Profit And Nonprofit Hospitals. Retrieved from
HealthAffairs: https://www.healthaffairs.org/doi/10.1377/hlthaff.19.6.168#:~:text=A
%20community%20that%20taxes%20a,that%20does%20not%20pay%20taxes.
