Non Profit In Healthcare Organizations

Non-profit vs. For-profit in Healthcare Organizations

In the healthcare industry there is a universal goal of treating patients and taking care of people. How that is accomplished is also similar, but the organizations behind the healthcare service provider can vary greatly. In this paper we will analyze the characteristics of non-profit and for-profit healthcare organizations and the factors that impact their operations. Additionally, we will look at the various ways a non-profit organization may be able to improve their financial and operational performance. On the other hand, for-profit healthcare organizations receive many criticisms and we will inspect the realities of these claims. According to Horwitz (2005), one of the differences
Bai (2013) investigates how board size and the occupational background of directors differentially influence this social performance. Bai (2013), using data, has found that the board of directors plays an important role in determining a company’s social performance. Examining both non-profit and for-profit healthcare organizations, the research showed that board size is negatively associated with social performance in for-profit hospitals, while it was found to have a positive association for non-profit
Non-profits are now challenged with doing more for their local communities, using more disclosure, and publicizing what they are doing to meet the healthcare needs of their patients. Overall, we see that the main differences of factors that affect operations of non-profits and for-profit hospitals are based on the rules that govern them. Non-profit hospitals must maintain their tax exempt status and answer to the IRS. For-profit hospitals are profit driven and are selective in their business by strategically choosing their location and health services to offer. How the public perceives either type of hospital and their social performance is directly influenced by the board of directors and who sits on said board. This is equally important for both types of organization. For non-profits, the impact they make on the community is closely inspected due to the tax breaks and donations they receive. For-profits must battle a balance of social performance with financial incentives. How much they lean towards one or the other makes a large impact on society’s perception of them. Choosing the right type of governance for their board will affect the social performance of the healthcare organization and in return, hopefully increase the quality of care for