Advantages And Disadvantages

The largest health care organization in the United States are hospitals. For-profit is an organization that operates to make a profit while a non- profit organization makes no profit. Charities and organizations reported that, 62% of the U.S. hospitals in 2003 are non-profit. Non-profit hospitals gain tax-exempt by meeting the state and federal guidelines provided, while for-profit doesn’t get these tax. The non-profit hospitals serve as charitable purpose for the community and are sometimes larger than the for-profit hospitals. Private hospitals may either be classified as non-profit or for-profit institutions.

The report provides a good data compilation, but provides little insight into the meaning of the data. Although the report provides little analysis, tax-exempt hospitals have provided significant amounts of financial assistance and other community benefits. [What remains to be seen, however, is whether insurance expansions under the ACA thereby decreasing pool of uninsured patients will cause these numbers to decrease in the future. Tax-exempt hospitals could further struggle to justify tax-exempt status.]

Nonprofit hospitals have become a common characteristic of the hospital sector because they can be found across the country because of their presence in almost every corner, they never decline to provide treatment, and offer several community-based health programs. On the contrary, the for-profit health facilities are regarded as the corporate model of health care services as they seek to make profit first. They enjoy huge capital that enables them to develop state-of-the-art facilities and purchase the latest clinical technologies.

The purpose of this paper is to conduct a comparative analysis between for-profit hospitals and not-for-profit hospital. It will discuss the characteristics of each as well as factors affecting the operations of both systems. Additionally, it discusses potential areas of improvement and some of the challenges associated with each relative to finance and operations.

According to the American Hospital Association the cost of equipment, services, and information services has risen drastically. A huge problem for hospitals now is that there has been an enormous increase in patients who have Medicare or Medicaid. The Hospital Association states that “60% of all admissions. Neither program fully reimburses the cost of hospital care.” Not only is the hospital not getting paid the full amount through the health insurance, but they have also seen a jump in people who do not have insurance and cannot pay for their hospital expenses this averages out to about six percent of hospital expenses. Hospitals must assume these costs as a part of their charity pay. These costs are then calculated and increase the costs of health care for people who pay for it, in order to cover these costs.

As discussed previously, the Affordable Care Act of 2010 passed by the legislature, drastically changed the entire healthcare economy. In fact, ever since the ACA was passed it was required by law for hospitals to increase the amount of attention given to the individuals of the community in order to meet their needs. Also, the ACA allowed close to 10 million individuals to have health insurance through Medicaid and private health insurances, which has a high impact on all the hospitals, such as Yale New Haven. For example, since millions of Americans can now afford health insurance, there is a large influx of patients who can go to hospitals and actually afford the overall cost. The non-profit hospital of Yale New Haven is benefiting in two ways. First, they are achieving their mission by caring for the individuals of their community who now have insurance and secondly, they are being compensated in terms of revenue to improve their organization in regards to hiring the greatest physicians and having the best technology and supplies to treat their large influx of patients (Cunningham, 2015). The rise in health insurances increases the total amount of money earned by that non-profit organization and the amount of patients receiving great quality of care.

While the 2,100 tax-exempt hospitals are heavily subsidized, with over $12.6 billion in tax exemptions and $32 billion in government-assistance subsidies each year, many fail to use their assets and revenues to provide mutually affordable health care to the uninsured and underinsured (Hammaker, 2011).

Hospitals also attempt to provide every available service to their patients, some say in an attempt to do everything they can as a medical professional, others as a way to squeeze every last penny from a sick individual and even others a means to ensure patients do not sue the hospital for not carrying out their duties to the fullest. The major problem with hospitals and how they relate to healthcare however is the fact that your local hospital basically runs a monopoly system. In an emergency an American does not have the luxury to shop around the area hospitals looking for the best price they can, they are rushed to the nearest emergency room and are subject to the costs of care given. Americans have no say on the price of procedures, operations and medicines because they cannot use a market system to hold hospitals accountable for their prices. Furthermore, hospitals like any other business may merge to consolidate their power and financial influence. For example, the 1993 merger between two eminent Harvard-affiliated hospitals, Massachusetts General Hospital and Brigham and Women’s Hospital created a city wide influence on healthcare costs. When the two most prestigious hospitals in the state pooled their resources and merged, insurers and by extension their patients, had incredibly fewer options inside the city to take their money to. This new massive healthcare corporation, Partners HealthCare, could

As discussed previously, the Affordable Care Act of 2010 passed by the legislation, drastically changed the entire healthcare economy. In fact, ever since the ACA was passed it was required by law for hospitals to increase the amount of attention given to the individuals of the community in order to meet their needs. Also, the ACA allowed close to 10 million individuals to have health insurance through Medicaid and private health insurances, which has a high impact on all the hospitals, such as Yale New Haven. For example, since millions of Americans can now afford health insurance, there is a large influx of patients who can go to hospitals and are able to afford the overall cost. The non-profit hospital of Yale New Haven is benefiting in

The debate over non-profit versus for-profit healthcare organization has been ongoing, does one provide better care than the other? Do the operations of for profit perform better than the non-profit organizations? Are the criticisms about for-profit organization validated and is there proof? The goal is to examine those questions as well as offer options to improve the financial and operational performance of non-profit and for-profit organizations criticisms.

Hospitals implement HCAHPS with the support of the Hospital Quality Alliance (HQA), a public or private partnership that includes key hospital and medical associations, consumer groups, measurement and accrediting bodies and government agencies that have the same interest in improving the quality of hospitals. The Hospital Quality Alliance (HQA) program that is overseen by and public and private entities, that include the Centers for Medicare and Medicaid Services (CMS) as well as the Joint Commission, is dominating this effort in the hospital district, generating reports quarterly on the delivery of effective services for mutual conditions. Even though the Hospital Quality Alliance has made this data more available to the public, there has not been enough information on the quality of hospital care from a patients ' point of view. As the Institute of Medicine shows, the foundation of patient centered care is a key factor to having a premium health care system. The HQA backs HCAHPS.

The expanded health insurance coverage via the Affordable Care act is having a major effect on managed care hospitals in many avenues. These effects are impacted via the increase in demand for care, the increase of patient revenues, as well as a lower uncompensated care especially for the uninsured. Not surprisingly, the constraints as well as the controls that are being imposed by the managed care have lead to an outrage by the doctors and their patients. Managed care in the United States finds itself under attack from every side. As far as the managed care organizations are concerned, administrators are unease regarding the profitability or the surplus for reinvestment and even the consumers are also worried about the possible closure of hospitals (Goodson, 2010). Managed Care Organizations have been forced to reduce hospital utilization even though there have also been a few facility closures.

The difference between for-profit and non-profit hospital has been debated for a long time. The established of the two differentiates institutions of health has also had controversial twists concerning their societal role. For-profit hospitals are said to be after money more than service delivery, while non -profit are not. Both hospitals use their market power in a similar way that it is sometimes hard to differentiate their behavioral characteristics. From research, it has shown that knowing the differences is relevant.

Financing health services in the United States is very important and involves an excessive amount of health institutions and activities. Health services are supported by several methods to create revenue that most hospital, clinics, and treatment centers use for daily operational costs (World Health Organization, 2006). These methods are: general taxation of the state, county, or township/municipality, Medicare or Medicaid or other socialized health insurance plans, voluntary and private health insurance and lastly, donations to health charities accepted from non-profit organizations, donations

“Hospitals can be non-profit, for-profit, and government-owned and/or operated” (Baker & Baker, 2006). There are different terms for each classification in how to report and handle the finances but the basics are the same for any type of business. Business finances require the following basic fundamentals: creating “budgets, understanding capital expenditure, loan acquisition, and financial fees” (Baker & Baker, 2006). Government owned and operated hospitals offer unprofitable services; which