Nonprofit Hospitals: FAQ

A hospital is a hospital, right? Not exactly. In fact there are a couple different types of hospitals in the United States. Most can be divided between nonprofit and for-profit organizations. The differences between the two can sometimes mean a difference when it comes to the type and level of care they provide, too. So if you have time to research hospitals in your area, keep an eye on their origins. Here are some frequently asked questions about the nonprofit hospital model and what it really means.

What Is a Nonprofit Hospital?

A nonprofit hospital is technically considered a charity organization. This means that it is actively involved in the community and provides specific community benefits in order to qualify. As a result, the hospital does not have to pay state or local property taxes, and does not pay the federal government income taxes. It is also not owned by private investors, although it may be owned by other private entities. Keep in mind that this does not necessarily mean that you can get treatment for free: On the contrary, you will probably still be charged for hospital treatment in most situations. However, nonprofit hospitals have strict ways of calculating costs and many options for financial assistance to help those struggling to pay their bills. Any extra profits are reinvested directly into the hospital.

Do Nonprofit Hospital’s Specialize?

Yes and no. Nonprofit hospitals do tend to specialize in certain services, especially free clinic services that they use as a form of community outreach. However, this does not mean that all nonprofit hospitals will specialize in the same types of preventative and community services. General treatment, on the other hand, tends to cover a wide range of conditions and there is little difference overall between what nonprofit and for-profit hospitals treat.

Are They Better than For-Profit Hospitals?

They can be: Nonprofit hospitals are not controlled by investors, and therefore are not as profit-focused as for-profit hospitals are. This can put more emphasis on the community and quality of care, if a nonprofit hospital is run correctly. However, this approach also runs into difficulties. Nonprofit hospitals find it more difficult to access capital to expand, invest in new equipment, or survive during rough economic times. For this reason, the most successful nonprofit hospitals tend to be in areas with higher average incomes where people can afford to pay for their services.

Where Are Nonprofit Hospitals Located?

Nonprofit hospitals are located throughout the United States. For-profit hospitals got their start in the Southern United States, especially Florida and Texas. However, they have spread across the country since then, so you cannot assume that your local hospital is nonprofit – check to see. However, one common giveaway is that nonprofit hospitals tend to have names with religious tie-ins as a sign of their origins – St. Mary’s, etc.

Are They Different from Government Hospitals?

Sort of. Government hospitals are also nonprofit, but they tend to have a tighter focus on impoverished areas, with specific goals in mind for those areas. Without private organizations running them, government hospitals rely more heavily on their original mandate. Government hospitals may also have fast tracks to government-based financial assistance.

The Charles and Jennie Machado Foundation is a nonprofit organization that helps people with kidney disease . They believe that people should not have to wait until someone dies before they may have the chance to live.