Profit Versus Not-for-Profit Hospitals Essay
In Partial Fulfillment of the Requirements for
Health Services Systems
Blaise X. Schmidt
Keller Graduate School of Management
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.
2.0 Comparing Not-for-Profit and For-Profit Hospitals
Not-for-profit hospitals are organized under the Section 501 (c)(3) …show more content…
The public views the not-for-profit as a dichotomy. They see the hospitals making profits though developing profitable centers such as outpatient surgery, or diagnostic service. Conversely, the hospitals due provide a level of care that “appears” to be better than for-profit. This point is contentious. Jill Horwitz, a business and law professor at the University of Michigan who studies the hospital market, says the biggest difference between the two types of hospitals is in the services they offer. For-profit hospitals, she says, are more likely to offer lucrative services, such as cardiac and diagnostic services, while their not-for-profit counterparts often provide more less-profitable services such as trauma centers, burn centers and alcohol- and drug-treatment programs (Gold, 2012).
3.0 Future Operations
Competition among the various hospitals, whether private, public, non-profit, government, or for-profit is increasing. Consequently, there is duplicity of operations resulting in marketing nightmare, care perception, operational decisions, productivity and profitability, and public perception. Hospitals compete with each