HSM 541; Health Service Systems Week-3 - Non-Profit vs For-Profit Healthcare Systems

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NFP VS FOR PROFIT HEALTHCARE 2 When reviewing the healthcare system in the United States we find that there are two categories in which the different organizations can be placed: profit and non-prof... it. Interestingly enough the 10 most profitable systems were all non-profit, and with that finding there are concerns raised as to what the organizations do with these profits. In order to understand why this is the case, it is important to understand the differences in the categories. Both the profit and non-profit designations within healthcare are functionally similar in staffing models. They both require patients and staff in the form of Providers (doctors, nurse practitioners, and physician assistants), along with nurses and paramedical professionals to treat patients. There is also a compliment of support staff to support the work of those professionals. As expected a non-profit health systems generally provide a larger portion of the un-compensated care, however the for-profit systems generally serve the lower-income populations. Non-profits are generally located in more affluent communities [ CITATION For20 \l 1033 ]. While functionally similar, the companies that fall under the umbrella of for-profit are expected to generate a return on investment [ CITATION Pre18 \l 1033 ]. One of the most obvious financial differences, which also holds a significant impact, is tax status. The financial burden of paying taxes has an influence on the corporate culture of the organization by emphasizing cost consciousness [ CITATION Che17 \l 1033 ]. The IRS views non-profit hospitals as charities, and thus do not pay federal income or state and local property taxes providing the organization conforms to the governance requirements. Non-profit hospitals are often aligned with a religious organization [ CITATION For20 \l 1033 ]. It is often thought that a non-profit organization cannot make a profit, which is false. A successful non-profit can, and should have a positive return on investment, however the organization is limited with how it can utilize any profits. For-profit organizations are held by investors or other publicly held companies. This study source was downloaded by 100000815926942 from CourseHero.com on 05-06-2021 00:17:30 GMT -05:00 https://www.coursehero.com/file/76659301/Week-3-NFP-vs-FP-Healthcaredocx/ This study resource was shared via CourseHero.com NFP VS FOR PROFIT HEALTHCARE 3 It is thought that non-profit healthcare systems could stand to learn some lessons regarding financial discipline from the for-profit sector as they are typically viewed as more benevolent and science based. My personal experience has taught me that the non-profit organizations are generally more difficult to work with from the patient perspective when it comes to financial difficulties related to large account balances. One local health system that is a non-profit (which I have experienced as both an employee and patient) is known for being difficult with billing payment arrangements, and for rapid turn over to collections. This particular system is not religiously affiliated, however does own the collection agency in which it “sells” debts to. While it is a smart business practice for the health organization to not only own the medical facilities, but its own insurance and collection companies, I personally find it to be a conflict of interest. The religiously affiliated non-profit organization in my community is known for seeming disingenuous and not keeping to its mission from the patient perspective. Their reputation within the community is for “running up the bill,” and “not caring.” They are also very zealous on bill collection and legal action for debt collection. Ironically it is the for-profit system that seems to deliver the most compassionate care and is the easiest to work with when trying to make payment [Show More]

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