Profit versus non-profit healthcare organizations - Essay Example

Healthcare organizations play a crucial role in health care delivery. These organizations help ensure that all individuals have access to adequate health care and that they would be able to recover from their condition and subsequently improve their health outcomes. These health organizations may be profit or non-profit organizations. Profit organizations are basically enterprising organizations which carry out their objectives for the sake of earning as much profit as possible. This is the opposite for non-profit organizations which carry out their objectives with hardly any profit in mind and mostly for philanthropic and altruistic reasons. This paper shall compare non-profit and profit healthcare organizations particularly focusing on the following aspects of these organizations: mission and purpose, organizational structure and scope, governance and oversight, leadership styles, expectations and accountability, compensation practices, strategic planning and budgeting processes, stewardship and fiscal responsibility, ethical challenges and dilemmas, investor relations, community benefit, social responsibility and stakeholder responsibility, potential impact of health reform on organizational initiatives, environment and organizational culture, and performance improvement and effectiveness – quality measures and indicators. These parameters shall provide a clear picture of distinctions in the application of these two types of organizations. Discussion The main distinction between the profit and the non-profit organizations is that one organization is driven by profit and the other is not driven by profit. More specific differences shall be discussed below. Mission and Purpose Non-profit healthcare organizations have basically an altruistic and non-monetary mission and purpose. Drucker (in Cox, p. 1) discusses that “non-profit institutions are human change agents. Their product is a cured patient, a child that learns, a young man or woman grown into a self-respecting adult; a changed human life altogether”. In effect, the mission or purpose of non-profit health organizations is to improve the lives of men, and to set forth non-economic goals which cannot be fulfilled by the government and by commercially-interested organizations (Cox, p. 2). The mission of non-profit health organizations is not to maximize profits, but to serve the members of the community where it is physically located, providing the members of the community the best healthcare services they can offer (Cleverley, et.al., p. 8). On the other hand, for profit organizations have more financially-related purposes. Its goal of earning profits is mostly sought for distribution to its investor-owners or for reinvestment to the organization for the long-term benefit of these investors (Cleverley, et.al., p. 8). In effect, for profit organizations are usually owned by investors, whereas non-profit organizations are owned by entire communities; and while non-profit organizations seek to benefit the community, the for-profit healthcare organizations aim to benefit its owners and investors. Money contributed to the organization are given with the hope of doubling or earning more profits, whereas, money given or invested to nonprofit organizations are not expected to make profits, but they are expected to serve the larger community. The growth in the organization is actually stated in terms of growth, efficiency, and quality; whereas, the mission for non-profit organizations are stated in terms of charity and community service, alongside growth (Gray and Institute of Medicine, p. 6). Organizational Structure and Scope Organizational structures specify the roles and responsibilities of individuals which are tasked with pursuing and fulfilling the goals of the organization (Zietlow, et.al., p. 5). Assigned individuals include the board of directors/board of trustees, committees, staff, officers, outside contractors, ...Show more