differences between for-profit and not-for-profit

MN-Nurse, ASN, RN · Jul 9, 2011

It depends on the hospital or clinic or department you work in. I don't think you will find an across the board difference based on how they cook the books.

Lucky724 · Jul 9, 2011

I've worked at both...didn't notice a difference as far as nursing was concerned - don't know about any other departments

WolfpackRed · Jul 9, 2011

every system is out to make a profit; the difference in the "for" vs "not-for" is what happens after the profit is made. "for profits" are responsible to investors first then reinvest into the system, whereas "not-for" will reinvest (sometimes) into the system. reinvest can mean anything - new equipment, research, raises and benefits.

anniv91106 · Jul 9, 2011

Are there any differences in work environment or how these two hospitals operate?

If an administrator had a certain agenda, like using funds to educate certain staff (furthering this agenda), which type hospital would be more beneficial?

fromtheseaRN, BSN, RN · Jul 9, 2011

there was recently a post about this that had some good info on it. from what i've seen/read, non profits take the profit and reinvest it into the hospital to make a better hospital- new equipment, education, more staff, etc. as wolfpackred said, the for profits take the profit and pay out to the investors and company shareholders.

where i live, the non-profit hospitals are much nicer, cleaner, have the newest technology, and the nurses seem happier. the for-profits are very outdated, old equipment, and seem to have a higher ratio of patients per nurse. people in my area avoid those hospitals (as patients).

brownbook · Jul 9, 2011

I've never understood anything about finances, taxes, for profit or not for profit. I worked for a county (not for profit) hospital so our funding was from taxes, and ??? state, government grants, most patients were medically indigent or on medi-cal, medi-care, etc.

I loved working there but as with any job there are wonderful people and rotten apples. I loved the feeling that I was helping people who truly needed help.

The ? for profit ? hospital 5 miles across town was more prestigeous. Even though it was supported with tax payers dollars (I don't even understand that but I know it is true). The privately insured public preferred to go there.

Once I pre-opped a young medically indigant man who had broken his arm. He had orginally been taken to the for profit hospital ER and had it cared for, set, etc. Then was told to come to our hospital for surgery. Our utilization review nurse got on top of this wrong picture. He was treated at that hospital and there was absolutely no reason legally, ethically, financially, etc. they should not have done his follow up surgery. She sent him back to that hospital! They just wanted to pass the buck!!! I won't go into mentioning the different ethnicity of most of our patients!!!!

I met a doctor who travelled around the state helping set up ER's. I mentioned my prior job at this county hospital. He told me he worked with the for profit hospital to revise its ER. He said that hospital INTENTIONALLY did NOT want to have a big improved fancy ER because they were afraid it would attract more of the poor indigant clients who traditionally came to our ER!!!!

Also working for this county hospital I was part of Public Employees Retirement System. It meant nothing to me as a new young nurse. But now I greatly appreciate my retirement package.

Chico David, BSN, RN · Jul 9, 2011

there was recently a post about this that had some good info on it. from what i've seen/read, non profits take the profit and reinvest it into the hospital to make a better hospital- new equipment, education, more staff, etc. as wolfpackred said, the for profits take the profit and pay out to the investors and company shareholders.
where i live, the non-profit hospitals are much nicer, cleaner, have the newest technology, and the nurses seem happier. the for-profits are very outdated, old equipment, and seem to have a higher ratio of patients per nurse. people in my area avoid those hospitals (as patients).

I'd agree with the general thrust of the comments here: There is not a consistent, across the board difference that you can count on. Good and bad administrators exist in both kinds. And, in a health care system where the underlying logic of the system is the logic of business - a logic of profit as opposed to a logic of service - many of the non-profits do tend to act very much like for-profit entities. For profits take the operating margin and siphon it off in profits to the owners and shareholders. All too often, non-profits take that same margin and siphon it off into bloated executive salaries and excessive reliance on highly paid consultants.

But all that said, I'd generally rather work for a non-profit. At least in theory, a non-profit exists to serve human need, a for-profit exists to make money.

Finally, just for fun, a little mental exercise.

Look at a non-profit hospital. Great big building, a lot of expensive equipment. It doesn't belong to the government. It doesn't belong to shareholders - there aren't any. But someone must own it, right? Who? The answer is that a non-profit corporation owns it. But who owns the corporation? Now, you keep digging and what you discover is that the legal theory is that the hospital is "owned" by the community it serves. OK - so we own it. We must have a voice in how it's run then, right? Sure - the hospital has a board of directors - members of the community. They represent the interests of the community in running the hospital. Oh, OK - do I get to vote for them, since they represent me? Well, no - when a vacancy shows up on the board, the existing members of the board think about who they know, who will 'fit in' with the board and they appoint someone. And at my hospital, the new member is on probation for a year to make sure they aren't a troublemaker before they become confirmed to the board. All very interesting to think about.

And one last thought: In theory, the chief executive of the hospital is supervised by the board and is subject to their control. But, in reality, that executive controls the Board's access to information and uses that control to control and manage the board. So it's really that executive who runs the show, no matter what the theory is.

karmyk · Jul 9, 2011

every system is out to make a profit; the difference in the "for" vs "not-for" is what happens after the profit is made. "for profits" are responsible to investors first then reinvest into the system, whereas "not-for" will reinvest (sometimes) into the system. reinvest can mean anything - new equipment, research, raises and benefits.

Out of curiousity, in the "not-for" case, are hospital administrators (like CEO's) allowed to reinvest it into their own raises/bonuses?

Chico David, BSN, RN · Jul 9, 2011

Out of curiousity, in the "not-for" case, are hospital administrators (like CEO's) allowed to reinvest it into their own raises/bonuses?

Generally, the board in a non-profit sets the salary levels for the top admins. Non-profits are required to file reports that include the salaries of top administrators and those are public record - I think it's called form 990. Anyone can walk into the admin office and ask for the latest one. However, they want to keep that info as secret as possible, so they always file for extensions to delay filing the report. Ends up meaning that the latest info you can get is really about 2 years old. The former CEO of our hospital - moderate sized non-profit - got about $750,000 annually, plus a car and a country club membership and miscellaneous other little extras. I think the board may have revolted against that and it's actually a bit less for the current guy.

But one of the main tasks of a CEO is to schmooze the board so they will like him and pay him really well.

MN-Nurse, ASN, RN · Jul 9, 2011

Out of curiousity, in the "not-for" case, are hospital administrators (like CEO's) allowed to reinvest it into their own raises/bonuses?

I dunno. The CEO of my not-for-profit network makes a cool $2 million a year.

rnccf2007, BSN, RN · Jul 10, 2011

To be honest, worked for both. Both are about making money and keeping the rich rich....Actually, my -not for -profit experience was the worst. The not-for profit hospitals (2 prestigious teaching hospitals) were still all about making money---"Get them in---get them out." In the time that I have worked at the last not -for- profit, I had the pleasure of taking care of two high up board members. I never saw so many people hit the floor at 0740, inculding the president, chief medical officer, and chief nursing officer. I was told to treat them "extra special." No getting them "in and out" in this situation. Basically asked to cater to them at the expense of my "common" patients. Asked to solve a management problem because said physician (known to take hours to call back) did not reply fast enough to board members request. I let management handle that and took care of the rest of my patients. They were not happy. If I were a board member, I would not announce who I was. I would sit back and watch how patients are actually treated--"real" patients, "everyday" patients who supply your private jet. This may sound extreme, not.