Non-profit healthcare providers use earnings to fund community programs and may charge lower fees, while for-profit providers prioritize shareholder profit and may deny care to uninsured patients. Non-profit providers are considered a charity and operate on an exempt finance base rate, but some criticize their ability to provide up-to-date technology. Studies show that non-profit nursing homes provide higher quality care for the elderly.
In a not-for-profit health care provider, any money earned from providing medical services is used as needed funding for programs that benefit the community surrounding the care provider. Cash is not used for shareholder profit. Also, a non-profit healthcare institution may charge lower fees or on a sliding scale.
The medical healthcare industry is typically supported by shareholders and corporations. Businesses and medical entities backed by shareholders or owners aim to profit from medical services provided by private physicians, especially where the procedures are expensive or long-term. These for-profit hospitals or facilities also often have policies that encourage caregivers to deny care to those in non-emergency situations who do not have any form of medical or health insurance, for fear that the client will not be able to pay the fees charged by the treatment.
Nonprofit health care providers, on the other hand, provide assistance to the community around them by providing medical, trauma, and mental health care programs and facilities to people who would otherwise not be able to afford the care or participate in the program. . As these non-profit treatment facilities are not intended to make money and instead intend to provide a community service by providing care to people who otherwise cannot afford it, they are considered a charity or non-profit organization and operate on an exempt finance base rate. This goes a long way toward allowing these facilities and programs to care for community members without having to charge people who can’t pay.
Many of the industry leaders in for-profit health systems are critical of the non-profit health sector, stating that the non-profit health sector is not able to provide adequate facilities or up-to-date technology, nor are they able to provide the same quality of care that the for-profit healthcare industry can. The reason for this is obvious: the for-profit healthcare industry is backed by high-yield investors and the not-for-profit healthcare industry is not. A for-profit healthcare provider needs to stay on the cutting edge of all medical technologies to offer profitable services that will keep investors happy; the non-profit does not.
It should be noted that in many surveys and studies, the only area that shows a clear difference between not-for-profit and for-profit health systems was related to the elderly care sector. The not-for-profit nursing home industry ranks much higher in terms of the quality of care provided. Other studies show that care is comparable in for-profit and non-profit facilities.
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