Paying for a non-profit service
I can only speak about hospitals in regards to health care non-profits charging to fund themselves, as this is the only form of medical service I have used that was talked about in the chapter. As decided in discussion, we derived a charitable service to be on that not everyone pays for, but everyone can use if they need it. So why does the individual get billed when they use the charitable hospital service?
I cannot walk into a hospital and know if they are non-profit or for-profit. I receive treatment and then pay for said treatment. I am paying for the staff that treated me, the staff that handles my paperwork, the staff that runs the hospital, and all of the costs associated in the equipment that is needed for a hospital to function (i.e. the building, lighting, medical devices, etc.).
If the majority of the operating costs needed come from patients paying for the services, and very little comes from donations as pointed out in chapter 2, what is the major difference between a non-profit and for-profit hospital? The salary requirements of a non-profit hospital should be close to that of a for-profit's in order to entice staff to stay and not seek opportunities at a for-profit hospital. Outside of salaries, the operating costs of the two types of hospitals should be pretty equal. So if non-profit and for-profit hospitals produce similar revenues, where does the extra money go in a non-profit hospital that in a for-profit hospital goes to the investors?
I cannot walk into a hospital and know if they are non-profit or for-profit. I receive treatment and then pay for said treatment. I am paying for the staff that treated me, the staff that handles my paperwork, the staff that runs the hospital, and all of the costs associated in the equipment that is needed for a hospital to function (i.e. the building, lighting, medical devices, etc.).
If the majority of the operating costs needed come from patients paying for the services, and very little comes from donations as pointed out in chapter 2, what is the major difference between a non-profit and for-profit hospital? The salary requirements of a non-profit hospital should be close to that of a for-profit's in order to entice staff to stay and not seek opportunities at a for-profit hospital. Outside of salaries, the operating costs of the two types of hospitals should be pretty equal. So if non-profit and for-profit hospitals produce similar revenues, where does the extra money go in a non-profit hospital that in a for-profit hospital goes to the investors?
posted by austin @ 3:28 PM
1 Comments:
At 1:53 PM, September 04, 2006,
Evelyn said…
My knowledge or experience in health care in this country is limited, but I can comment about the health care sector in my country (Costa Rica). In my country health care is a social service that the government provides to all citizens for free. People usually complain about the quality of the services and the long time it takes to get an appointment, but in general terms I think that it does a pretty good job providing medical attention to society. These hospitals are funded and financially supported by government; they also get donations from different sectors, just like here in the US. We also have private medical facilities that are extremely expensive and definitively not accessible for a middle class citizen. (Note: Please let know if you have questions about the way social security operates in my country, I will be happy to provide more comments more about it).
When I compare non-profit and for-profit medical centers, some differences come to my mind. I guess these differences can help explain the question that Richard made: where does the money go in a non-profit hospital? Non-profit facilities are not as modern as for-profit facilities; therefore money in for-profit facilities goes to infrastructure (buildings, decoration, high tech equipment, etc). But in non-profits, where does all the money go? One option is that money goes to administrative costs and maintenance of obsolete equipment. Is it possible that non-profits are not modern enough and all they do is spending all these extra money fixing obsolete equipment?
For-profit facilities also hire the best doctors in the region, therefore money also goes there (salaries, relocation costs, etc). Non-profit hospitals normally have locals working and do not hire professionals because they are famous; they just need to fill a position with a competent professional, therefore I believe that non-profits do not spend extra money in this.
I think that maybe non-profit facilities operate in a different way than the for-profit ones in terms of the how they administrate money and in their planning. Non-profits need to invest more time and efforts in future planning (forecasting). I think that non-profits must invest more funds in high-tech equipment and maintenance instead of being spending money in fixing them all the time (at least that’s what I have seen in Costa Rica, I am not sure here in the US). I believe that their future planning is also somehow poor and that is reflected in the way that organizations implement changes and improve it (definitely slow).
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