Nonprofit vs. For-Profit Healthcare Organizations Healthcare Organizations,

Nonprofit vs. For-Profit Healthcare Organizations

Healthcare organizations, both profit and non-profit, are designed to help people in need. However, sometimes that goal fails because of the notions of performance that are used in the private sector (i.e. for-profit). These are not the same as the notions used in the public sector (i.e. nonprofit) (Speckbacher, 2003). Private sector health care is based much more closely on economic theory than public sector health care, and that greatly affects how patients are treated, even though many in the industry will insist that there is no change in how patients are received in either type of organization (Speckbacher, 2003). In order to understand the difference between the two kinds of healthcare organizations, one must consider the way they are operated and maintained.

For-profit healthcare is part of the private sector, and is designed for making money as well as for helping patients. Non-profit healthcare still makes money, but it is not set up to make a profit as a private sector business. Instead, it belongs to the public sector, like governmental entities, and therefore the criteria by which these two types of healthcare organizations operate is, understandably, different. But does that affect the way in which the patients are treated? Do they get better care at one type of facility as opposed to the other type of facility? That is something that many people are questioning, especially as healthcare changes in the United States, and something for which there is no clear answer.

Most of the answers on that issue are conjecture, opinion, and speculation, but Ha & Reschovsky (2002) did analyze the medical care in both of these types of organizations. The researchers came to the conclusion that non-profit medical care was more satisfactory than for-profit medical care, but their method was based on the self-reporting (i.e. opinion) of people who had received care. Because of that, there is still questions as to whether there is a significant difference in the treatment or standard of care between people who see doctors or visit hospitals that are for-profit vs. non-profit.

Other studies into the issue have also been conducted. In 2002, Brickley and Van Horn released a study that indicated that CEOs in non-profit hospitals have high turn-over rates that are related to the financial performance of those hospitals. While many non-profit hospitals indicate that they are interested in altruistic activities as opposed to income, Brickley and Van Horn (2002) found no evidence of that in their study. Because managers in both for-profit and non-profit healthcare organizations must focus on the financial performance of their organizations, there is no reason to believe that the two types of healthcare are actually different from one another in any significant way.

While there will always be varying opinions as to which kind of healthcare organizations are best for society, the evidence does not suggest that there is anything more going on with the two healthcare options than companies that are helping people who are ill. All of the organizations appear to be facing enormous pressure to bring in money, whether they are trying to make a profit or attempting to get some kind of return on their assets (Brickley & Van Horn, 2002). As long as that continues, there will be no real difference between the two types of healthcare organizations, because they are both focused on the bottom line - at least at the top levels of management.