Question

400 words
Ownership and Fraud
For-profit hospitals exist to secure a return on an investment for their owners. Nonprofit hospitals act as a community benefit. Regardless of ownership, all hospitals are required to comply with state and federal laws.
Focus your discussion on the following:
Discuss the similarities and differences between for-profit and nonprofit hospitals and possible debt financing patterns.
Using scholarly resources, ascertain which is more apt to practice unethical executive behavior.

Answer 1

Similarity between profit and non-profit hospitals:

1. The biggest similarity between for profit and non-profit hospital is the environment and standard of care between them. After all, there are profit and non-profit hospitals among the best hospitals in the country today.
2. Both are held answerable for the quality of the care provided.
3. Both serve the needs of the community.

There are many differences between profit and non-profit hospital, some of which are:

1. Tax status: Non-profit hospitals are exempt from paying taxes. But for profit hospitals are liable to pay taxes.
2. Objective: One of the primary objectives for profit hospitals is to meet their financial targets and increase profitability. Non-profit hospitals don’t prioritize profitability and are more driven to serve the health care needs of the community they operate in.
3. Compensation package: Many for profit hospitals have incentive based pay as a part of their employee compensation package. The same is not case in non-profit hospitals. Also, non-profits also have volunteers who work at the hospital.
4. Funding: For profit hospitals obtain their capital from bank loans and investors. But non-profit hospitals receive their funding from government grants, donations and sponsorships.
5. Location: It is found that non-profit hospitals are found mostly in high-income neighborhoods where people have insurance. While, it is observed for profit hospitals are found in communities with high poverty.

Debt financing patterns:

a.Both for profit and non-profit hospitals use debt financing to finance their operations. For profit hospitals use more debt than non-profit hospitals.

b. Debt financing is mostly in the form of tax-exempt bonds in case of non-profit hospitals. While for profit hospitals tend use taxable public offering and loans with commercial banks

For profit hospitals are more apt to practice unethical behavior. For profit hospitals have a higher profit margin than non-profits. It is regarding that for profit hospitals might be resorting to cost cutting measures to increase profitability. Such cost cutting activities might affect the quality of service provided.

For profit hospitals ask their staff to work overtime in order to meet financial targets for the quarter or year. This might take a toll on the medical staff’s ability to provide the best service.

There have been cases where large amounts of money for profit hospitals have been moved to wealthy individuals and institutions rather than in investing them to provide heath care.

I hope that was helpful :)