Comparing Not-For-Profit & For Profit: Hospitals

Introduction

Currently hospital industry has experienced a massive change with respect to technologies, innovative and reorganization of care. With this trend, hospitals have been declining in regions and hence, nonprofit hospitals have converted into for profit status. The reason for this conversion is due to increase in cost for health and immediate technological change. In this essay, the focus would be on Comparing Not-For-Profit & for Profit - Hospital. This essay will also stress on the case study “Subsidiarity in health care: experiences profit and non-profit”. In this Massachusetts General Hospital, reviewing briefly both history and the current situation of the health system of the United States, in order to contextualize the activity of the Massachusetts General Hospital.



Discussion

Not-For-Profit refers to the facility that is not liable to pay state as well local property taxes. They are also not liable to pay any federal income taxes since they are considered to be part of charity and demonstrate certain community benefits that have been stated in state and federal guidelines. As far as for-profit is concern, they work revenue purpose that is they are either private or publically owned institution that issue stocks in order to raise fund and to expand hospital activities (Hill, 2011, p. n.d).

Background of Not-For-Profit & For Profit hospitals

Previously researchers and doctors used to argue that entire healthcare institutions should have been Not-For-Profit and due to this, complexity and different disagreement come across. Hence, what required to be investigated was whether Not-For-Profit hospitals have been intrinsically better than for-profit hospitals and also whether there are ample of evidence-based data to sustain policies stating ownership (McClellan, Staiger, 2000, p. 94).

Private hospitals have been divided into non-profit or for-profit institutions. IN U.S., majority of the hospital are part of Non-profits. These two different types of hospitals differ in term of rules and regulations. This should be note that nonprofit hospitals does not need to pay any taxes that are relate to property, sales or income taxes. Regardless of these differences, this different ownership has been turning similar to each other and hence majority of the healthcare has been changing their ownership status (Marronm 2006, p. 10).

Revenue that is generated by For-profit and not-for-profit hospitals is via their daily operations. For-profit hospital, they raise funds via issuance of stocks whereas this is not the case with non-for-profit hospitals, they are unable to issue shares rather they have an ability to issue Tax-Exempt bonds and could accept Tax deductible contributions.

The purpose behind Non-profits hospitals were to service health needs for poor. Due to this factor, they are exempt from taxes and also due to the fact that they are providing services to poor which is part of social services. Currently, 85% of the healthcares are not-for-profit and their mission entirely focuses on social services i.e. charitable mission and vision. Hence, certain argument has been made by people that if all health care institutions are converted in non-profit entities that they would only ...