How to Compare Profit and Nonprofit Hospitals

The basic difference between a for-profit hospital and a non-profit hospital is the fact that  a for-profit hospital run its medical facility like a business in order to make money. A non-profit hospital, on the other hand, is required to put all of its profits back into the business.

• Compare the structure of the hospitals. Although both types of hospitals are incorporated as corporations, the non-profit hospital is a 501(c)(3) corporation. This simply means that the non-profit hospital does not have the pay taxes at the end of the year. Instead, it must allocate these funds towards the necessary expenses it needs to keep the hospital running. These expenses include equipment maintenance and the salaries of the employees.


• Determine the death rates for each type of hospital. According to some studies that have been completed, the death rate tends to be higher for hospitals that run the facility in order to benefit from a profit. This is simply because administrators tend to look for short cuts, which lessens the amount of quality care. Additionally, patients are usually required to pay more for the services that are rendered, which prevents many from obtaining the care they need.


• Look at the employees. Non-profit hospitals usually have more nurses and less administrators, due to the fact that for-profit hospitals try to allocate more of the money made on the administrators rather than quality help. These hospitals would rather spend money on less-qualified employees, such as nurse technicians, that do not require high pay.