For Profit Healthcare Organizations: A Case Study

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In healthcare, there are for profit and not for profit organizations. It is difficult to say whether or not one would provide better service over the other. For profit hospital organizations have avenues for raising capital that nonprofits don’t have. When hospitals are looking to upgrade its facilities, it is important for hospitals to have access to the capital it need. Some of the largest, most successful healthcare organizations are not for profit and nonprofit organizations. Horwitz (2005) noted that the econometric analysis of American Hospital Association data for every acute care hospital between 1988 and 2000, over thirty services provided were categorized as relatively profitable or unprofitable. Healthcare organizations especially …show more content…
One of its main goals is to generate a profit. For profit healthcare organizations generally receive resources, such as money, in exchange for goods and services (Finkler, Purtell, Calabrese and Smith, 2013 p. 36). The owner of for profit healthcare organization generally spends the money back into the business itself. These for profit hospitals organization are responsible to its stockholders and shareholders. The profits that are earned can be distributed to the owners and the stockholders of for profit healthcare organizations. Also, the taxes are different with for profit healthcare organizations. For profit healthcare organizations have no tax exemption …show more content…
Some would argue that private not for profit hospitals are less efficient than for-profits. To account for the amount of assets and equity used at the two hospitals, the nonprofit hospital’s expected level of spending on community benefits should be equal to the for profit hospital’s return on equity or return on assets multiplied by the nonprofit hospital’s equity or assets (Nicholas, Pauly, Burns, Baumritter and Asch, 2000). For profit or investor owned hospital organizations are starting to expand in other places other than the southern part of the United States. According to The Editorial Board (2015), for-profit hospitals are starting to offer discounts voluntarily, and several states have laws or regulations requiring all hospitals, including for profit hospitals, to offer price discounts to eligible uninsured patients. Not for profit hospitals have had some financial losses and because of that may start cutting services, such as trauma or psychiatric care (Evans, 2013). Attracting, retaining, and rewarding personnel, especially physicians, of non-profit organizations has become more difficult and must be addressed if not for profits are to compete with for profit businesses. The sad thing is that approximately 60 percent of our hospitals here in the United States are currently not for profit
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