Is there a future for the not-for-profit hospital?
The issue of the future of the not-for-profit hospital is not one of not for profit versus investor owned, but of economic viability. A shift toward business practices in the not-for-profit hospital is occurring and may help explain why few studies have been able to show distinctive differences between not-for-profit and investor-owned hospitals. Although the system is set up to give not for profits special privileges for promoting a societal common good, a gradual erosion of those privileges has blurred the distinction between the two types of entities. With a process I call "competitive advantage incrementalism," investor-owned hospitals chip away at the privileges afforded their tax-exempt competitors. At the same time, the not-for-profit hospitals increasingly adopt the successful practices of the business world, and are guided by board members and executives who hold to a big-business view of healthcare. What is the future for the not-for-profit hospital? They must continue to exist, although they can expect increasing operating burdens to continue as not for profits. They and investor-owned facilities become progressively more similar in operations and structure. The not-for-profit institutions must prove that they produce a community benefit to justify not-for-profit status. That is a heavier burden than merely producing a high rate of return for investors.
Weckwerth
Vernon E
VE
Graduate Executive Program in Healthcare Administration (ISP), University of Minnesota, Minneapolis, USA.
D003159:Community-Institutional Relations; D006777:Hospitals, Proprietary; D006788:Hospitals, Voluntary / Q000191:economics* / Q000458:organization & administration*; D014481:United States