For-Profit Hospital
What is a for-profit hospital?
A for-profit hospital is a medical center that is investor-owned. These hospitals are motivated to make a profit for shareholders, and they are typically the highest-billing hospitals in the U.S. Like most hospitals, for-profit hospitals have a corporate hierarchal structure.
What’s the difference between for-profit and non-profit hospitals?
While for-profit hospitals collect profit, non-profit hospitals do not. The IRS recognizes non-profit hospitals as charities, which excludes them from state or federal tax, property tax or sales tax. In return for the tax exemptions, non-profit hospitals must distribute capital into their communities.
Why are for-profit hospitals important to healthcare?
For-profit hospitals are important to healthcare because they offer a significant amount of medical care to lower-income and uninsured patient populations. For-profit hospitals also provide less uncompensated care than non-profit hospitals, which means that they do not have to face the financial difficulties associated with uncompensated care.