Healthcare Delivery System Within the United States

Healthcare Delivery System

Within the United States there is a dynamic between for-profit and not-for-profit health delivery systems. Health, in this instance, can be defined primarily as the facility's ability to restore ill patients to optimal physical standards. Both hospitals claim to provide similar care, with in-patient and out-patient services being offered to those in need. However, the real question becomes which provides better care for patients and what types of patients seek out each type of hospital. This paper will discuss primarily for-profit healthcare delivery systems and the advantages that these hospitals bring when compared with non-profit hospitals. Specific issues that will be considered are the types of patients common to each hospital, these individuals' access to healthcare, and the impact of insurance.

For-profit hospitals are simply that, a for-profit entity seeking to bring in revenue through providing high-quality medical services to patients. This is accomplished through higher overall prices for care (Pattison, 1983), but balanced through superior physicians and surgeons. This being the case, the overall consumer for-profit hospitals is typically a middle to upper-class person. For-profit hospitals tend to attract higher amounts of elderly people who have the established wealth to pay for the higher quality care. In fact, according to a study conducted by the National Bureau of Economic Research, the only reason that for-profit hospitals have a higher mortality rate than non-profit hospitals is because if the high amount of elderly heart-patients that the hospitals serve (Cutler, 2000). Non-profit hospitals, on the other hand, tend to service two specific groups of consumers. The first are those belonging to a specific religious group, typically Catholic. Second, are the poor or indigent who cannot otherwise afford to pay for necessary medical care. While the non-profit hospitals do offer care to these patients, this results in a much smaller amount of revenue being generated and an inability to offer patients the most up-to-date care.

The primary way that consumers afford care at for-profit hospitals is through insurance. Private insurance companies contract with hospitals and arrange for set prices that include the overall costs to the hospital and a margin of profit for each procedure. Because for-profit hospitals are registered as a for-profit business, the hospital is permitted to generate a high profit line and offer investors a return for their investment in the company. In order to accomplish this goal, however, for-profit hospitals continually raise their overall prices and renegotiate with insurance companies. According to an article by doctors Woolhandler and Himmelstein, the costs of healthcare in for-profit hospitals tends to rise by at least 1.2% every four years. This increase results in higher overall costs to afford the very insurance that is necessary to use these facilities, thus making it even more difficult for the poor to afford insurance. Non-profit hospitals, on the other hand, are filed as non-profit entities and cannot list a high annual revenue. In fact, few non-profit hospitals list any revenue whatsoever. The reason for the loss in revenue is that non-profit hospitals are required to care for all patients regardless of whether the patients can pay for the care. This also means that less money can be reinvested in the hospital, resulting in lower quality care.