The Comparison Between Profit and Non-profit Healthcare Systems: Term Paper Example

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University of Richmond
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There are two major categories of healthcare systems in most countries in the world-profit and non-profit healthcare systems. This paper examines the two types of systems in details by comparing and contrasting them. I will compare a for-profit hospital with a not-for-profit hospital. For the profitable hospital, I will analyse the Hospital Corporation of America (HCA). For the not-for-profit hospital, I will discuss St. Andrews Hospital-Northampton.

As the name suggests, Hospital Corporation of America is American. Its based in Nashville, Tennessee and it currently runs 174 hospitals and 119 freestanding surgery centres in the USA and UK. St. Andrews Hospital-Northampton is in the UK, and it houses the National Brain Injury Centre among other services. Below is an in-depth comparison between the two hospitals and the two healthcare systems.


Profit Healthcare Systems (Hospital Corporation of America) Non-profit Healthcare Systems (St. Andrews Hospital-Northampton)

Mission Improving the financial strength of the company by providing high-quality care and a positive patient experience. Transforming lives by delivering world-class mental health care services. The aim is to look out for the well-being of the patients, their family members, and their careers.

Organisational structure The Hospital Corporation of America has a vertical organizational structure. It is usually designed in such a way that one function of the hospital does not have so much power above the rest.

At the top of the pyramid is the directors. Below the directors are the executives. The executives run the day-to-day operations of the hospital. They are headed by the chief executive officer (C.E.O). The other members of the executive are usually the chief financial officer, chief operating officer, chief medical officer, and the chief nursing officer.

Department administrators come next in the chain. They are mainly in charge of particular care departments. They include labour administrator, orthopaedic administrator, and the paediatrician administrator. They are deputized by assistant administrators whose primary role is to link the department specific tasks with general hospital roles such as finance and policies.

Patient care managers come next. They oversee what the staff are doing to ensure they follow procedures, give quality services, and follow legal regulations in a hospital. They also play some human resource roles for the staff that works under them.

Finally, we have the service providers. These include doctors and nurses mainly. They have specific areas of specialization. They do perform the main duties inpatient treatment. Just like in the for-profit hospital, St. Andrews Hospital-Northampton is run by a Board of Directors. Below the directors is the executive. In its composition, the executive is similar to that of Hospital Corporation of America.

Administrators run specific departments. Assistant administrators deputize them with same functions as those in the for-profit hospital.

Patient care managers are present here, too, with the same roles as those for the profit hospital.

The service providers are at the bottom of the organizational structure. They apply treatment to patients based on their specialization. They include nurses, doctors, and physical therapists.

Patient services Competition from other hospitals, particularly the non-profit ones, has been found to be healthy. It leads to higher quality of services at a reduced cost.

Competition increases value for customers over time, quality and process improvement. It leads to reduced costs by patients and hence greater customer satisfaction

Previously, the Hospital Corporation of America competed for patients by offering the best healthcare staff and using better technology than that of the competitor. Today, it competes by increasing the range of its services.

It takes the quality of healthcare very seriously. There is competition with other hospitals. It is both from other non-profit hospitals, and from for-profit hospitals. It is healthy for improving the quality of medical care in St. Andrews Hospital-Northampton. Just like in the profit-making hospital, St. Andrews Hospital-Northampton takes the quality of healthcare very seriously.

Process and quality as a result of healthy competition between Hospital Corporation of America and its competitors lead to lower medical costs for patients.

The same competition reduces inefficiencies that previously used to Budget comparison make healthcare more expensive.

The CEO of the Hospital Corporation of America argues that there is no real distinction between profit hospitals and not-for-profit hospitals when it comes to their annual budgets. The cost of medication is low due to donor, church and government funding. It has also been due to competition with other hospitals.

The money budgeted to run St. Andrews Hospital-Northampton is relatively similar to the amount spent in the Hospital Corporation of America.


Profit Healthcare Systems Non-profit Healthcare Systems

Mission Hospital Corporation of America is aimed at generating returns for investors. It is business driven. The profit earned is reinvested into opening new branches of the hospital and in giving dividends to the shareholders. On the other hand, St. Andrews Hospital, Northampton is service driven. Any profits are mainly used to improve the quality of services at the hospital.

Brief History The profitable healthcare system started at different times in different countries. In the USA it started in the 1920s. Some researchers gained knowledge on the common diseases that afflicted the American people during those days. They came up with treatment for these diseases and asked patients to pay to enjoy these treatment services. It was also at this time that hospitals such as the Baylor Hospital in Dallas, later called the Blue Cross, came up with hospital insurance. The premiums were pretty low back then, though. Not-for-profit hospitals came earlier than the for-profit hospitals. In the past, many people endured illness at home. The not-for-profit hospitals originated from alms-houses which were the only institution at that time that took care of the ailing. As cities developed, non-profit hospitals became more due to the need to take care of the chronically ill in the spirit of charity. For example, Bellevue Hospital in the USA started as six-bed wards in New York City in 1736. The same was the case of Charity Hospital in New Orleans and the Regional Medical Centre in Memphis.

Organisational Structure The Board of Directors of the Hospital Corporation of America oversees numerous facilities. It is composed of professionals. Unlike the board of the Hospital Corporation of America, the board of directors at St. Andrews Hospital-Northampton is composed of community leaders, government representatives, and religious leaders.

Patient Services The Hospital Corporation of America offers state-of-the-art technology in diagnostic and cardiac services which are more expensive and that earn the hospital a lot of income.

The quality of care is great due to use of state-of-the-art technology for diagnostic and treatment services. However, sometimes it has been accused of a costly loss of lives because of putting money first. St. Andrews Hospital-Northampton mostly offers charity services. Its service provision is mainly meant to serve the community around the hospital. It writes off bad debts for patients who are unable to pay over a long period. Some of the services provided in this hospital are offered for free.

Unlike its profit-making counterpart, St. Andrews Hospital-Northampton mostly offers services such as high-level trauma or intensive care burn wards. These are facilities that are expensive to set up, but which offer very little financial returns. The hospital also offers alcohol and drug treatment and therapy, psychiatrist services, and home-based care. All these are meant to benefit the community at a very minimal financial benefit to the hospital.

The healthcare at St. Andrews Hospital-Northampton has often been accused of being of low standards due to the absence of some basic state-of-the-art technology for diagnostic services. However, it makes it up by having a high patient-staff personalized interaction, as compared to merely giving the patients drugs.

Budget Comparison There are no tax benefits in the Hospital Corporation of America. It is funded by either investor or by public shareholding. St. Andrews Hospital-Northampton is mostly funded by charity, religion or research funds.

It does not pay any form of tax, and in turn, it serves the community at a relatively less cost to the patient.


The difference between profit and non-profit healthcare systems has been said to be little in this modern age. There is a trend where the competition between the two systems has led to each system copying a thing or two from the other. Traditionally, most people visit the not-for-profit hospitals because they are cheaper and because they have some unique services. The for-profit hospitals have tried to adapt to this by introducing unique services too such as rehabilitation centres for drug addicts in some of these hospitals. They are also continually looking for ways to make treatment cheaper to patients while still maintaining a stable profit margin.

The not-for-profit system, on the other hand, lacks some of the state-of-the-art technology necessary for diagnostics and specialized treatment. The issue of dealing with an overwhelming number of patients is also thorny in this system. The hospitals in this system, have also come up with ways to counter this. They have opened up new branches to cater for the high patient's number. Also, they try to acquire new technology from other facilities (including from the for-profit hospitals), to improve the quality of their medication.

The differences between these two systems are, however, still evident. This paper sheds light on the big ones regarding taxation, mission, operations, and so on.

Competencies and Skills Developed

This paper has helped me in doing thorough research work. It has helped me to gain key skills in comparing and contrasting two different sectors. Above all, it has helped me to understand the healthcare systems we have.


Khan, O. A., Skinner, R., & IGI Global. (2003). Geographic information systems and health applications. Hershey, PA: IGI Global (701 E. Chocolate Avenue, Hershey, Pennsylvania, 17033, USA.

University of California, San Francisco, Trauner, J. B., Luft, H. S., & Robinson, J. O. (1982). Entrepreneurial trends in health care delivery: The development of retail dentistry and freestanding ambulatory services: a report. Place of publication not identified: publisher not identified.

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