Non-Profit Hospitals: A Case Study

What are some business and financial implications of the differences between community not-for-profit hospitals and large academic medical centers that may affect staffing, programs offered, and policies and procedures? While a non-profit (voluntary) hospital’s mission is for the benefit of the community, private hospitals (proprietary) are investor-owned and operate for the financial benefit of the organization and its stockholders (Shi and Singh, 2013). Non-profits receive tax-exemptions, and provide an important service to the community as they treat “everyone regardless of their ability to pay” (Writing, n.d.). According to Shi and Singh (2013), the tax exemptions are from federal, state, and local taxes, such as sales, and property taxes, however, they must provide education, service, community welfare for the public good, and profits must not be distributed to any individual (pgs., 197-198). This can cause a good deal …show more content…
Luke’s in Denver, Colorado, was 40% non-profit, and 60% for-profit (HCA). In 2011, The Colorado Health Foundation gave up control to for-profit HCA (The Hospital Corp. of America) for $1.45 billion, requiring HCA to continue charity care and community benefits for at least ten years (Booth, 2011). At the time the article was written, the author surmised that because HCA already had operating control of the partnership, it would not place a great impact on the marketplace in Denver (Booth,, 2011). And without getting into HCA’s past history of fraud, today it boast 165 hospitals, 115 free-standing surgery centers in 20 states and in Great Britain, and employs approximately, 204,000 people (HCA, 2015). Since both of the hospitals in Duluth, MN, where I currently live are non-profit, I think HCA’s story in Denver is a good way to look at how a for-profit can impact a community, and must do so to stay ahead of the curve, and under the watchful eye of the