Pay

RedBait · Aug 12, 2004

How do nurses get paid?
From the government? Where does the money come from? I know it's not a profit making corporation, and the patient doesn't pay them for services.

First: not for profit does not mean makes no profit; it means the profit must be spent according to IRS rules to avoid paying taxes on that profit. (For example: net profits must be plowed back into the hospital for capital improvements within five years.)

Secondly: Patients DO pay and so do their insurance companies, Medicare, and Medicaid. Here's how it works with insurance. The insurance company designates a price it will pay for a particular diagnosis, no matter how much the hospital spends, it gets this fixed fee. Spend more=lose money, spend less=make money. From the make money pile, the nurses are paid as are the other operating expenses. This is the system that generated same day surgery, early discharge, 23 hour observation units, etc. Spend less=make money, spend lots less=make lots of money.

Many hospitals have funds that cover patients who cannot pay and have no insurance and do not qualify for Medicare or Medicaid. These funds usually come from donations.

Hospitals make bushel baskets of money, or they close. Many not for profit hospitals are owned and operated by for profit corporations who have many clever accounting practices that suck up the profits to the parent corporation. This is where it gets complex and pretty boring, except for the fact that hospitals complain about paying us and would have us believe that they are short of money. Bunk!

Questions?

Tweety, BSN, RN · Aug 12, 2004

Nurses are generally paid by their employer. Lots of nurses are employed by the many forms of government their are (national, state, local, county, city, etc.).

There are lots of hospitals that are in the business of making their owners (shareholders, private corporations) a profit and nurses are paid by them.

I work for a "not for profit" hospital. Meaning their mission is to the community. We are not owned by any government agency, we are a private enterprise, and must make some form of profit to pay our bills, or as was stated we will close. Our profits come from the insured, medicaide, medicare, etc. But we treat anyone regardless of their ability to pay. We do a lot of "indigent care" (uninsured) and to listen to upper management it's always a struggle to pay our bills and we must always figure out ways to cut costs (i.e. nursing staff, supplies, etc.).

Also many not for profit hospitals get some supplement from their city they are in, or the county they are in since the are providing a community service. The hospital I work for gets their land they are on for $1.00 a year or something like that. But no funding for day-to-day operations.

Does that help?