Differences between nfps and for-profits are marginal _ healthleaders media

For-profit and nonprofit hospitals are fundamentally similar organizations with subtly different cultural approaches to managing the economics of healthcare.

All acute care hospitals serve patients, employ physicians and nurses as their primary personnel, and operate in the same regulatory framework for delivery of clinical services.

For-profit hospitals add a unique element to the mix: generating a return for investors.


Low budget high profit business in india This additional ingredient gives the organizational culture at for-profits a subtly different flavor than the one at their nonprofit counterparts, says Yvette Doran, FACMPE, chief operating officer at Saint Thomas Medical Partners in Nashville, which is affiliated with Ascension Health, a nonprofit based in St. High profit low cost business Louis that owns 131 hospitals in 24 states and the District of Columbia.

“When I think of the differences, culture is at the top of my list. Business with high profit in india While quality care is a priority for both, the culture at for-profits is business-driven. Low investment high profit business in hyderabad The culture at nonprofits is service-driven,” she says.

However, the fundamental similarities of all acute care hospitals blunt the impact of the business-driven culture at for-profits, Doran says, noting the differences between for-profits and nonprofits reflect cultural nuances rather than cultural divides. High profit items to sell on amazon “Good hospitals need both. Best business ideas with high profit in india Without the business aspects on one hand and the service aspects on the other, you can’t function well.”

Doran has prior work experience at Franklin, Tennessee–based for-profit Community Health Systems. High profit margin items CHS operates 202 hospitals in 29 states, and reported 2014 net operating revenues of $18.6 billion and adjusted EBITDA of $2.8 billion.

The executive leadership at Capella Healthcare, a relatively small for-profit health system based in Franklin, Tennessee, shares much of Doran’s nuanced perspective on the differences between for-profit and nonprofit hospitals.

“At Capella, we do not believe there are significant differences between for-profit—or taxpaying—hospitals and nonprofit hospitals. Highest profit margin items on ebay In fact, that line of differentiation has become exceptionally blurred in recent years,” says Michael Wiechart, president and CEO of Capella, a privately held company that operates 10 acute care and specialty hospital facilities in five states, and for fiscal year 2014 reported $713.4 million in revenue from continuing operations, net of the provision for bad debts, and adjusted EBITDA of $103.3 million.

“Both of us share the mission of delivering the highest-possible quality of care. Low cost high profit products And both of us must make a sustainable bottom line in order to achieve the mission and to expand care for the future. High profit items to sell on ebay We are both held accountable on our quality of care, our ability to be good stewards of the operations, and to make our organizations great places to work for both employees and physicians. Business with high profit margins in india While each operates by some slightly different rules and regulations based on our business or tax structure, both of us have all of the same basic goals and challenges.”

For-profits and nonprofits have a nearly identical mission under ground rules designed to foster and support value-based care, Wiechart continues. Ebay products with highest profit margin “Neither for-profits nor nonprofits have the luxury of ignoring sustainability or patient-care excellence. High profit business ideas philippines We’re all dealing with the same environment and the same challenges. Low investment business with high profit in chennai And it’s about who can do it better. Small business low investment high profit Being able to make a sustainable bottom line is necessary for reinvestment and growth for everyone, regardless of your tax status.

“You just have to consider what the motivation is around making the profit. Best business with highest profit margin For us, it’s about being able to reinvest in our family of hospitals, which we historically have done by reinvesting 100% of free cash flow into growth and quality improvements, not in dividends to shareholders.”

In theory, for-profit hospitals should operate with more zealous attention to business objectives than nonprofits because shareholders have their money on the line.

“The absence of a residual claimant with a financial interest in the organization means that no one individual, or group of individuals, has strong incentives to monitor the behavior of the organization at nonprofit hospitals,” Rexford Santerre, PhD, a professor of finance and healthcare management at the University of Connecticut, wrote in a 2005 National Bureau of Economic Research report with a Finance Department colleague John Vernon, PhD. High profit jobs The NBER is a private, nonprofit economic research organization based in Cambridge, Massachusetts.

In the absence of mitigating factors such as shared regulatory frameworks and shared interests in providing quality services, financial considerations would dominate decision-making at for-profit hospitals, Doran says. High profit items to sell online “If I were a fly on the wall at a for-profit meeting, the dollar would be at the top of the list. Business with low investment and high profit in india If I were a fly on the wall of a nonprofit meeting, the patient would be at the top of the list.”

In an interview with HealthLeaders, Santerre explains that for-profit boards and their executive leadership teams, which invariably have monetary performance incentives built into compensation packages, face a measure of financial pressure that is absent at nonprofits. High profit business ideas uk “Theoretically, there is a residual claimant, and that residual claimant wants to maximize profit,” he says, referring to for-profit shareholders.

In contrast, Santerre says nonprofit boards and their executive leadership theoretically have an “incentive not to compromise quality,” noting a nonprofit is required to distribute earnings back into the organization or into its service-area communities. High profit margin products Nonprofits can reinvest earnings in facilities, lower charges to patients, or offer community benefits. Low cost business ideas with high profit philippines In contrast, one of the prime benefits of operating as a for-profit is the opportunity to bank positive operating margin after taxes. Low startup high profit business “You can take on risks, but you can also gain the rewards as a for-profit,” he says.

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