What is Not-For-Profit Healthcare?

At a not-for-profit healthcare provider, any money made from performing medical services is used as necessary funding for programs that benefit the community around the care provider. The money is not used for shareholder profit. In addition, a not-for-profit healthcare facility may charge lower fees or on a sliding scale.

The medical healthcare industry is typically supported by shareholders and corporations. Medical corporations and entities supported by shareholders or owners aim to turn profits on medical services provided by private physicians, especially in cases where the procedures are expensive or long term. These for-profit hospitals or facilities also often have policies that give incentive to care providers to deny care to those in non-emergency situations who do not have any type of medical or health insurance, out of fear the client will not be able to pay the rates he or she has been charged for the care.

Not-for-profit healthcare providers, on the other hand, give assistance to the community around them by providing medical care, trauma, and mental health programs and facilities for people who could not otherwise afford to get the care or to participate in the program. As these not-for-profit care facilities don't aim to make money and instead aim to perform a community service by giving care to people who can’t otherwise afford it, they are considered a charity or nonprofit and operate on a tax-exempt financial basis. This helps greatly to allow these facilities and programs care for the community members without having to charge the individuals who cannot pay.

Many of the industry leaders in for-profit healthcare systems criticize the not-for-profit healthcare industry by stating that the not-for-profit healthcare industry isn’t able to provide suitable facilities or up-to-date technology, nor are they able to provide the same quality of care the for-profit healthcare industry can. The reason for this is obvious: the for-profit healthcare industry is backed by high-yield investors and the not-for-profit healthcare industry isn't. A for-profit healthcare provider has to stay on the cutting edge of all medical technologies to offer profitable services that will keep the investors satisfied; the not-for-profit does not.

It should be noted that in many surveys and studies, the only area that shows a clear difference between not-for-profit healthcare and for-profit healthcare systems were related to the elderly care industry. The not-for-profit nursing home industry receiving a much higher rating in terms of quality of care provided. Other studies show care is comparable at for-profit and not-for-profit facilities.