What is the Difference Between Non Profit vs. For Profit Healthcare Administration Jobs?

non-profit-hospitalAs you start to compare all of the open healthcare administration jobs, it’s important to distinguish between positions that are advertised with for profit and nonprofit health facilities and hospitals.

When you are studying Healthcare Administration of Health Management, one thing you must do is learn how for profit and nonprofit health systems differ. By learning this information, you can make the process of narrowing down job listings easier. There are distinct differences in both financial and business terms before the nonprofit and for-profit facilities. Read on, and learn how these differences can affect your role as a healthcare administrator.

Salaries to Doctors and Leaders Employed By the Hospital

The main difference between a non-profit and a for-profit organization is that a for-profit is focused on earning profits for the owner and stakeholders. A nonprofit is focused on the greater good. For-profits are required to pay taxes on all of the revenues that exceed the expenses. Nonprofits are exempt from paying these taxes because the profits will be used solely for the operation.

Because profits are simply funneled back into a nonprofit hospital, doctors and leaders in a nonprofit tend to make higher wages than a for-profit. According to the Bureau of Labor Statistics, almost everywhere in the U.S., employees at nonprofit hospitals average higher salaries than employees working at a for-profit facility. This turns into higher employee satisfaction rates, which typically translates into higher customer satisfaction rates overall.

Community Involvement and Benefits

With trends in the healthcare industry changing, more and more administrators are focusing on how to deliver a better quality of care so that re-admissions can decline and the cost to provide care is lowered. In the long-term, these new hospital strategies will improve the community and help patients stay engaged in their own care and treatment. Hospitals can improve health by teaching the community about:

  • smoking cessation
  • prescription drug abuse
  • maintaining weight
  • what to do in an emergency

Both for-profit and nonprofit facilities have community programs, but the programs deployed by non-profits tend to be larger and more available. As an administrator, if you would like to be involved in planning community service programs, a nonprofit environment may be ideal.

Ability to Pay and How it Affects Daily Business

When a patient comes to a facility for care, they can be turned away at a for-profit facility if they do not have insurance and they are unable to pay co-payments. A nonprofit facility will accept all patients regardless of their ability to pay. Because of this, these facilities tend to be busier. Dealing with payers may be more difficult in a nonprofit setting, and physicians are often overwhelmed with the pace.

Related Resource:  With the Passage of the Affordable Care Act, How Will the Job of the Healthcare Administrator be Impacted?

Many people do not take the time to learn about the differences between for-profit and nonprofit when they are visiting a medical facility. If you plan on working for one, knowing which settings are best for you is important. Decide between each setting, and narrow down your choices of healthcare administration jobs.

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