Among other healthcare organizations, non-profit hospitals have always been under public scrutiny and, therefore, provoked many heated discussions. These hospitals differ greatly from for-profit healthcare facilities. Unlike for-profit hospitals, the non- profit ones have no obligation to pay back to owners or stockholders. Besides, they are exempt from taxes, which gives them an opportunity to invest money in vital medical investigations and support charity. However, all these activities are severely underdeveloped in the communities where many non-profit hospitals are situated. Taking into consideration this fact, more and more people keep wondering where their money goes and how it affects the community itself.
The main goal of non-profit healthcare organizations is to help people, who are in need but cannot afford paying for medical services. The provision of medical services depends on the type of ownership. As it is mentioned in Jill Horwitz’s article, two thirds of urban hospitals in the USA are non-profit, while the remainder belongs to for-profit and government hospitals (Horwitz, 2005). Nevertheless, all types of hospitals need sufficient funds to provide all necessary services. Non-profit hospitals guarantee the provision of the same range of services as for-profit institutions. Furthermore, non-profit, as well as for-profit, institutions tend to offer relatively profitable services more than government hospitals do. However, some differences between these two types of hospitals are noteworthy. On the one hand, for-profit hospitals are more likely than non-profits to offer open-heart surgery. On the other hand, non-profit hospitals offer psychiatric emergency care more than for-profit hospitals, and home health care is more likely in non-profits (Horwitz, 2005). Any change in service profitability would be crucial for a for-profit hospital policy, while a non-profit hospital would try to balance service profitability with the need to help uninsured people. In addition, considerable not-for-profit hospital funds are spent on conducting medical research, inventing new methods of curing serious diseases, investing in new equipment, improving programs and services, providing low-cost or free care to poor people, and other kinds of charity activities.
It seems that local community benefits greatly from everything done by non-profit hospitals. However, as these hospitals are almost tax exempt, they can also make some profits. Furthermore, they get additional revenues from charity donations. Unfortunately, not all funds are spent on desirable goals. Member of the State Board of Equalization, Betty Yee stresses the fact that non-profit hospitals tend to provide less charity care than for-profit institutions (Lydersen, 2012). According to Kari Lydersen (2012), “Three-quarters of the hospitals got more dollars in tax breaks than they spent on charity care. Half spent less than 2.46 percent of their operating expenses on charity care”. Such tax breaks cause losses to flourishing towns. For instance, California cities lost about one billion dollars in tax revenue they could have earned in 2010. This state of affairs is observed all over the United States. It is quite predictable that, if big institutions are tax free, the tax burden is placed on those who depend on the services these institutions provide. It undermines the state of the community and, consequently, may lead to a budget crunch (Lydersen, 2012).
To conclude, non-profit hospitals, with their pros and cons, contribute to community development. These institutions enable people who cannot afford paying for medical care to get it on a decent level. Furthermore, non-profit healthcare institutions provide the basis for medical research and facilitate the implementation of many other projects. Although non-profit hospitals may cause some problems to the community budget, there is always a way to solve them.