Difference Between Nonprofit And For Profit Hospitals

Seven figure salaries are not a normal occurrence among hospital and health system executives. However, according to the Chronicle of Philanthropy, which does an annual national survey of nonprofit salaries, found that the five top-paid nonprofit chief executives in 2003 all worked for hospitals. On top of these exaggerated salaries are the attractive benefits such as bonuses, deferred income, retirement plans, country club memberships, and countless other perks that are attracting the wrong kind of leaders to these organizations. Hospitals must provide their social responsibility to the community before spending outrageous salaries for chief executives. It is an unethical practice to pay executive teams more than the total spending on the necessitous care of the community. For example, the survey identified 17 hospitals in California where the total compensation to CEO’s alone exceeded the total cost of charity care of their respective organizations. These excessive salaries could have easily

The debate on whether all healthcare institution should be non-profit rises many issues and they have been heavily debated. The best way to examine this to analyze if non-profit hospitals are in fact better that for

The White Paper released by the Camden Group and presented for review by the contributing authors (Rebecca Bales, Kelly Tiberio, and Tara Tesch) offers a perspective from one of the nation’s leading Health Care advisory firms. The paper brings to the forefront the characteristics of Non-Profit and for-profit hospitals, and the outlook for conversion from one industry classification (Non-Profit into a For-profit) business entity. Contained within the paper are a wide-range of topics with regards to the similarities between the two health care models, laws and regulations from both the State & Federal levels that guide their respective classification, market outlook for the health care industry and case studies that highlight the impact of actual conversion from Non-profit to For-profit hospitals from an industry standpoint. The health care is a challenging and competitive environment, therefore the paper focuses on providing insight on a strategy based on adapting from one business model into another in order to remain competitive.

Safety net hospitals have played an important role in the United States health care system. They provide a significant amount of care to low-income, uninsured, and vulnerable populations. While treating these types of populations, they are still able to provide high cost services such as trauma and burn care. They often take on additional roles and responsibilities such as the training of medical and nursing students (Coughlin et al., 2014). These hospital systems are well known for their open door policy (Wynn et al., 2002). They will examine and treat all individuals, whether or not they can pay for any of their services. The hospitals are not distinguished from other providers by ownership. Some are publicly owned and operated by local or state governments, while others are non-profit. However, they are distinguished by their commitment to provide access to care for all individuals with limited or no access to health care due to their finical circumstances, insurance status or health condition (What is a Safety Net Hospital, 2015).

An increasing issue within the health care field is the inability to collect debt from the growing population of uninsured or underinsured patients. Healthcare organizations may be struggling to meet operational margins because the industry has never treated its customers like other retail-oriented sectors of the economy. A McKinsy and Company report states that hospitals incur sixty billion dollars in bad debt annually because they typically collect only ten to twenty percent of a total uninsured patient balance after service. (MacKenzie, 2009) This is due to a number of reasons, including poor accounting practices or a lack of patient information. This paper will discuss how one hospital, California’s Sutter Health, has taken steps to

However, faultfinders of revenue driven doctor’s facilities including worker’s guilds, purchaser gatherings, and a few administrators say there are different contracts, as well (Becker, 2014). It has been noted that not at all like philanthropic clinics, revenue driven healing centers need to reply to shareholders, who might not have indistinguishable interests from the neighborhood groups. Faultfinders likewise caution that revenue driven doctor’s facilities will probably quit offering cash losing administrations (Becker, 2014). Then again, that combination of nonprofit insurance companies and negotiated fees-for-service prevents costs from spiraling out of control (Hill, 2011).

Non-profit and tax-exempt hospitals in the U.S. must demonstrate their benefit to the communities they serve in order to maintain their IRS status. As anchor institutions, these hospitals are in a strategic position to use their considerable human and economic resources for local development in low income communities. Hospitals are economic powerhouses. According to a 2013 report by the Democracy Collaborative “they employ more than 5.4 million people, have expenditures in excess of $675 billion, and spend more than $340 billion each year on goods and services. Of all charitable nonprofits in the United States, not-for-profit hospitals alone comprise more than 40 percent

A comparison will be held against non-profit hospitals and for-profit hospitals in regards to their operating costs focused on uncompensated care and their operating profit margins. The locations and statuses of the hospitals will also be taken into account and explained to add more context and clarity to the true meaning of their dollars. The comparison will be displayed not only in a paragraph format but also in a bar graph visual to accentuate and clarify the either vague or noticeable difference between the hospitals.

The majority of hospitals in the US are private nonprofit hospitals. Community hospitals make up the majority of private nonprofit facilities. These hospitals have an average of 190 inpatient beds. The nonprofit hospitals are exempt from federal, state and local taxes. Nonprofit hospital are owned and operated by hospital districts or nongovernment organization and benefit the community that they serve. They provide public good and do not distribute profits to individuals or stockholders.

Good morning, I appreciate the opportunity to meet with you to address concerns that have recently arisen in the media regarding the tax-exempt status of nonprofit hospitals. In particular, those concerns relate to the issues of patient collection tactics and partnerships with for-profit entities. I am here today to assure you that at St. Michael’s Hospital for Children, we are not only aware of the requirements to be classified as a nonprofit organization, but that we also work diligently every day to make certain we remain compliant with the established standards set forth by those requirements. We comply with GAAP standards for accounting. For any of you that are not familiar with that term, GAAP standards are the “authoritative

The role of payers in the health care industry has dramatically increased in the past few years and will continue to do so with the expanding cost of care. Hospitals are often under scrutiny because of the discrepancies found between the actual cost of care and what the insurance will reimburse the organization. Bruce Reuben, the president of the Florida Hospital Association, explains the multifaceted triangle considered by hospitals: “‘There's one party — the hospital who provides the service. There's a second party — the patient, who receives the service. And there's a third party — the insurance, who pays for the service’" (Mack, 2014). The greatest complex part of this triangle is the last which examines the insurance’s payment for service

Instead of thinking of the patient’s needs, the hospital consider the patients as profit. The more patients the hospital admits, the greater the profit obtained.

I chose to report in the area of general medical and surgical hospital, although it provides explanation on cost and revenue it fails to mention them in detail. The article stated that for the past decade hospitals have decreased in numbers, as well as in patient hospital beds. However, reading the article under organization and structure it reveals cost and revenue. For instances in the late 2000’s, the largest source of income for hospitals came from Medicare and Medicaid services, of 2.24 trillion, in governmental funds they provided 1.04 million or 46.2 percent. Medicaid accounted for 19.2 percent and Medicare, 14.7 percent. Private insurances paid 34.6 percent which would be over 775 billion, finally out-of-pocket expenses accounted for 12 percent, which was equivalent to 268.9 billion. The remaining 7.2 percent came from other sources of revenue.

Utilizing community-based organizations to help those in need not only empowers the patient to live a healthier lifestyle, but will also allow earlier detection of disease and an increase rate of compliance for follow-up care of the patient. This allows for better quality of care and will in turn reduce healthcare cost from unnecessary emergency room visits and readmission rates. Studies also show that increased funding to health centers creates additional economic stimulus by creating new jobs (Whelan, 2010). This will help those in need to monetarily afford the necessary options for treatment.

Non-Profit hospitals can often assist potential patients to care for the uninsured in their community (Kovner & Knickman, 2008).