Nonprofit Hospitals: A Case Study

Nonprofit community hospitals are the largest grouping of hospitals in the nation (Williams & Torrens, 2008). Even though the number of community hospitals has declined over the past twenty years, most Americans still use them as their primary source of care. Many nonprofit hospitals are sponsored by religious organizations. Nonprofit entities are generally expected to provide a certain amount of indigent care. The Affordable Care Act of 2010 required that all nonprofit hospitals perform a community needs assessment (Pennel, McLeroy, Burdine, & Matarrita-Cascant, 2015).
For profit hospitals are entities that have shareholders and may be public or private (Williams & Torrens, 2008). Historically, for profit hospitals were physician owned.

The three systems are not for profit, for profit and State owned (Williams & Torrens, 2008). Not for profit community hospitals gained dominance in the 1940’s and 1950’s (AL-AMIN, 2012). The Hill Burton Act of 1946 allowed for millions of dollars to be passed to “General” not for profit hospitals. In fact, virtually every community in America had a “General” or community hospital. These hospitals were full service institutions. Emergency rooms were generally a room. Physicians were general practitioners, they delivered babies, treated individuals in the emergency department, admitted patients to the hospital and performed general surgery. One premise of Hill Burton was local not for profit hospitals would care for the poor and indigent. But by the 1970’s many lawsuits were filed due to not for profit hospitals providing minimal uncompensated

Each system has its own set of advantages and disadvantages. Non profit hospitals are tax exempt and generally located in rural areas and offer general medical care. Due to their rural placement they generally lack specialized services such as critical care and major surgery. For profit hospitals are generally part of a health system and are located in an urban setting. They offer greater access to specialized care and surgical services. Due to their size and corporate structure they tend to place profits over patient care and shift services from smaller facilities to centralize facilities. State hospitals provide services that many do not, the care for the indigent and uninsured. They offer secure areas for housing prisoners and typically have mental health facilities for those that have nowhere else to go. The drawback to State hospitals is their funding is limited and reimbursements from third party payers is typically low resulting in older equipment and difficulties in attracting staff due to lower than average