Week 2 Discussion Post 26 Document | IHP 600 - Social And Organizational Issues In Healthcare

For-profit and not-for-profit hospitals have many differences, but do have the common goal of providing quality care for all patients. The main difference between these two types of hospitals is that for- profit hospitals pay property and income taxes, while not-for-profit hospitals do not (Becker, 2014). A for-profit hospital has the resources to gain capital. Gaining capital will allow a healthcare facility to upgrade the facility and buy new, costly medical equipment or information technology systems (Becker, 2014). One thing to consider when talking about a for-profit hospital is that these hospitals have shareholders that the hospital needs to listen to. This means that what the shareholders want may not be in the same interest as the facility, which could lead to money-losing services being cut from the facility (Becker, 2014). The shareholders have a larger say on what procedures will be done at the facility and what the staffing and salaries are like at the hospital. On the other hand, not-for-profit hospitals must offer community benefits because they do not pay any taxes. This means that these facility serve the healthcare needs of the community, instead of paying taxes (Masterson, 2017). The profits that the hospital makes, must be reinvested back into the facility because they are not able to raise capital gain like for-profit facilities (Masterson, 2017). Due to this, these facilities will see an increase in the number of patients on government funded insurance plans, which results in lower payments. The financial impact that could result if a for-profit organization was built within the community would be the division of patients going to either hospital. For-profit facilities tend to spend a lot of money on advertising, which can be seen as a waste because these facilities tend to be located in areas where there are few healthcare facilities to choose from (Profit vs. Nonprofit Hospital administration: GW University, 2021). When this occurs, the not-for-profit facility will end up advertising as well, to stay with the competition. A for-profit organization may offer less services compared to a not-for-profit facility due to the lower budget because of the shareholders decision and also due to the number of patients on a government healthcare plan. The benefit of being an academic medical center is that they offer the specialized surgeries, life saving care and complex treatments. Being an academic center, they tend to treat many uninsured patients (Benefits of an Academic Health Center, n.d). This is an added benefit to communities because these individuals do have a place to go when needing special care. Overall the financial difference between not-for-profit and academic medical centers is that academic medical centers tend to be less extensive for patients (Less, 2019). This is due to the academic aspect of the facility.

References:

Becker , A. (2014, April 25). How different are for-profit and nonprofit hospitals? CT Mirror. Retrieved March 29, 2022, from https://ctmirror.org/2014/04/25/how-different-are-for-profit- and-nonprofit-hospitals/ Benefits of an Academic Health Center. Patient Care | UF Health Jacksonville | University of Florida Health. (n.d.). Retrieved March 29, 2022, from https://ufhealthjax.org/patient-care/benefits-academic- health.aspx Liss, S. (2019, June 10). Are teaching hospitals more expensive? A new jama study may surprise some. Healthcare Dive. Retrieved March 29, 2022, from https://www.healthcaredive.com/news/are-teaching- hospitals-more-expensive-a-new-jama-study-may-surprise-some/ 556502/ Masterson, L. (2017, May 25). Nonprofit, for-profit hospitals play different roles but see similar financial struggles. Healthcare Dive. Retrieved March 29, 2022, from https://www.healthcaredive.com/news/nonprofit-for-profit- hospitals-play-different-roles-but-see-similar-financ/442425/ Profit vs. Nonprofit Hospital administration: GW University. George Washington University. (2021, July 15). Retrieved March 29, 2022, from https://healthcaremba.gwu.edu/blog/profit-vs-nonprofit- hospital-administration/