HSM 544 Role Nonprofits in Healthcare Discussions 1 Week 4

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HSM 544 Role Nonprofits in Healthcare Discussions 1 Week 4
How does the role of nonprofit healthcare organizations differ from profit healthcare organizations?…

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HSM 544 Role Nonprofits in Healthcare Discussions 1 Week 4

HSM 544 Role Nonprofits in Healthcare Discussions 1 Week 4

HSM 544 The Role of Nonprofits in Healthcare Discussions 1 Week 4 All Posts 28 Pages Keller

How does the role of nonprofit healthcare organizations differ from profit healthcare organizations?

At the most basic level, healthcare organizations of all sizes and types are either nonprofit (NP) or for profit (FP). Similarities between both types of organizations include but are not limited to:

  1. Both have universal goals to provide the highest quality healthcare services needed by patients served.
  2. Both have universal goals to balance costs, quality, and access among all stakeholder groups (e.g., patients, providers, administrators, third-party payers, etc.).
  3. Both MUST make a profit to stay in business and continue providing healthcare services to patients who need them.
  4. Both have to comply with legal policies and regulations at local, county, state, and federal levels.
  5. Both experience similar challenges such as healthcare professional shortages/turnover/burnout, high rates of malpractice lawsuits/litigation, highly complex reimbursement for services and products provided.

Differences between NPs and FPs included but are not limited to:

  1. NPs do not pay income taxes, whereas FPs do pay income taxes (mostly at corporate rates). In return for the benefit of NPs not paying income taxes, legally these organizations are required to treat a reasonable volume of patients for free (i.e., without the ability to pay for services through insurance or personal funds). Conversely, FPs are not legally required to treat patients without an ability to pay for services received.
  2. NPs must put profits into an “excess account” earmarked for a capital improvement projects such as a new piece of technology or structure remodel/addition, etc. FPs pay taxes on profits and distribute the remaining amount to owners/shareholders.
  3. NPs are eligible to apply for and receive numerous federal grants to supplement income and pay for services that may lose money (aka lost leader programs) whereas FPs are typically not eligible to receive grant monies.
  4. NPs typically have a much larger source of gifts and donations by patrons through foundations than FPs.
  5. NPs typically have a much larger volunteer staff than FPs.