Is There a Future for the Not-for- Profit Hospital?

Weckwerth, Vernon E.
June 2006
Frontiers of Health Services Management;Summer2006, Vol. 22 Issue 4, p3
The issue of the future of the not-for-profit hospital is not one of not for profit versus investor owned, but of economic viability. A shift toward business practices in the not-for-profit hospital is occurring and may help explain why few studies have been able to show distinctive differences between not-for-profit and investor-owned hospitals. Although the system is set up to give not for profits special privileges for promoting a societal common good, a gradual erosion of those privileges has blurred the distinction between the two types of entities. With a process I call "competitive advantage incrementalism," investor-owned hospitals chip away at the privileges afforded their tax-exempt competitors. At the same time, the not-for-profit hospitals increasingly adopt the successful practices of the business world, and are guided by board members and executives who hold to a big-business view of healthcare. What is the future for the not-for-profit hospital? They must continue to exist, although they can expect increasing operating burdens to continue as not for profits. They and investor-owned facilities become progressively more similar in operations and structure. The not-for-profit institutions must prove that they produce a community benefit to justify not-for-profit status. That is a heavier burden than merely producing a high rate of return for investors.


Related Articles

  • Editorial. Kaufman, Audrey // Frontiers of Health Services Management;Summer2006, Vol. 22 Issue 4, p1 

    The article reflects on various issues and topics related to not-for-profit (NFP) hospitals contained within the issue. In one of the articles, Vernon F. Weckwerth says that distinctions between NFP hospitals and investors-owned hospitals are gradually diminishing. While NFP hospitals are...

  • A systematic review and meta-analysis of studies comparing mortality rates of private for-profit and private not-for-profit hospitals. Devereaux, P.J.; Choi, Peter T.L.; Lacchetti, Christina; Weaver, Bruce; Schunemann, Holger J.; Haines, Ted; Lavis, John N.; Grant, Brydon J.B.; Haslam, David R.S.; Bhandari, Mohit; Sullivan, Terrence; Cook, Deborah J.; Walter, Stephen D.; Meade, Maureen; Khan, Humaira; Bhatnagar, Neera; Guyatt, Gordon H. // CMAJ: Canadian Medical Association Journal;5/28/2002, Vol. 166 Issue 11, p1399 

    Background Canadians are engaged in an intense debate about the relative merits of private for-profit versus private not-for-profit health care delivery. To inform this debate, we undertook a systematic review and meta-analysis of studies comparing the mortality rates of private for-profit...

  • Your money and/or your life? Naylor, C. David // CMAJ: Canadian Medical Association Journal;5/28/2002, Vol. 166 Issue 11, p1416 

    Comments on a study which found that patients treated in private for-profit hospitals had a higher mortality rate than patients treated in private not-for-profit hospitals. Expectation that liberal and conservative politicians will argue about the implications of the study for Canadian health...

  • A bigger piece of the pie. Galloro, Vince // Modern Healthcare;11/8/2004, Vol. 34 Issue 45, p6 

    Reports on the increase in for-profit hospitals and the decline in non-profit hospitals in the U.S. in 2003. Decline in the overall number of hospitals in the country since 1975; Factors that influenced the slowdown in the increase in investor-owned hospitals; Problems being faced by non-profit...

  • Can we profit from profit? Goldberg, Carol // Long Island Business News (7/1993 to 5/2009);08/03/98, Vol. 45 Issue 31, p1A 

    Focuses on the effect of the presence of for-profit hospitals on the non-profit health care in New York. Failure of efforts to change law preventing corporations from owning hospitals in the state; Hospitals changing to not-for-profit status; State Senator James Lack's introduction of a measure...

  • New coalition plans to fight against for-profits. Scott, Lisa // Modern Healthcare;03/17/97, Vol. 27 Issue 11, p2 

    Presents information on the Coalition to Protect Community Not-for-Profit Hospitals' intentions to fight against the spread of for-profit healthcare in the United States. Reactions of critics to the coalition's intentions; Composition of the coalition;

  • Not-For-Profits: Business Basics for Survival. Krenek, Jr., Bryant H. // Frontiers of Health Services Management;Summer2006, Vol. 22 Issue 4, p15 

    Many not-for-profit hospitals are struggling to keep their doors open. Although executives often contend that they are not playing on a level field, the fundamental cause is the hospital's failure to earn an excess of revenue over expenses. The tax exemption enjoyed by a not for profit can be a...

  • Heads firmly in the sand. Sloane, Todd // Modern Healthcare;6/6/2005, Vol. 35 Issue 23, p20 

    Discusses the state of the healthcare industry in the U.S. as of June 2005. Challenges faced by the industry; Views of hospital heads regarding for-profit and not-for-profit hospitals; Significance of tort reforms to the industry.

  • Opiate of the Managers. Sager, Alan // Society;Jul/Aug86, Vol. 23 Issue 5, p65 

    This article discusses the competition between for-profit hospitals and nonprofit hospitals in the U.S. Powerful opinion has fastened on increased competition as the preferred method of controlling spending on health and building a more desirable system of care. The most visible response of...


Read the Article


Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics