Hospitals and Long-Term Care Facilities
By Annette Dixon
Professor Dr. Jo-Rene Queensberry
HSA500 Section: 006VA016-1124-001
May 13, 2012
Describe the difference between nonprofit and for-profit hospitals.
The hospital has originated, over the years, as an institution for the poor, offering little in the way of therapy. Today it has evolved with primary focus on health care. To understand hospital growth one must first distinguish between the two: nonprofit or for-profit hospitals. In the past, nonprofit hospitals were developed for charity and usually through religious orders. However, with a dramatic rise in health care costs since the 1980s, hospitals have increasingly converted to for-profit enterprise. During the 1980s, the increased health care costs were due to inflation, and new technologies threatened the survival of nonprofit hospitals. Their soul mission was providing health care without regard to a patient's ability to pay. Employers and government bear most of the expense for health care in the U.S. and have pressured medical providers to decrease costs. Nonprofit hospitals accept everyone. They do not refuse treatment and offer many community-based health programs. For-profit hospitals represent a corporate model of health care, which seeks profit first. For-profit hospitals enjoy higher capital, which in return allows them to purchase the latest medical technologies and create state-of-the-art facilities (Lister). For-profit health care providers claim they are able to provide better care at lower cost due to their focus on efficiency. For-profit hospitals' focus on efficiency has raised questions of whether cost-cutting impacts consumer health. Both nonprofit and for-profit hospitals provide similar services, each faces demands to cut health care costs. For-profit hospitals have a duty to investors in paying dividends and taking the company in an approved direction. Nonprofit hospitals seek to promote community health organizations such as free community health clinics and acute-care centers (Lister). “Because non-profit hospitals do not pay taxes, federal policymakers have taken a closer look at what benefits those hospitals provide to the communities in which they are located. Nonprofit hospitals are required to report to the Internal Revenue Service what is known as community benefits, which includes how much charity care was provided and how much bad debt, or uncollectable fees for service, they took on. Nonprofit hospitals also must provide information about Medicare and Medicaid services and community programs” (Falchek, 2011). Describe at least three major trends that have occurred within the hospital sector. Several trends have occurred within the hospital sectors. One major trend is large hospitals being more prevalent within the East due to the timely trend of building smaller rather than larger facilities. Over the past 25 years, a large number of small hospitals especially in the urban areas have closed because of financial and competitive pressures. The lack of operating a small number of hospital beds also lead to the closing of facilities. Specifying the optimal side of a hospital is particularly difficult given the complexity of services offered on an inpatient basis (Williams, & Torrens, 2010). Another major trend as reflected from the table in the textbook is the decrease in the number of hospital beds from 1.5 million to fewer than 1 million since 1975. A combination of closures and reductions for operating licensed beds within the hospital still open was reflected in this trend. Due to the size of large hospitals, there is a disproportionate share of knowing the total number of hospital beds. About 70 percent of the nation’s hospital beds are in nonprofit facilities (Williams, & Torrens, 2010). Through combining technological innovation and the financial pressures of payers, there has been an increase...