Non-profit hospital

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A non-profit hospital is a hospital that does not make profits for owners of the hospital from the funds collected for patient services. The owners of non-profit hospitals are often a charitable organization or non-profit corporations. Fees for service above the cost of service are reinvested in the hospital. Other funding types for hospitals include public hospitals and for-profit hospitals.

In the United States

The hospital industry in the United States includes a mix of ownership forms. Non-profit hospitals are the most common type, but for-profit and government hospitals also play substantial roles. A non-profit hospital, or not-for-profit hospital, is a hospital which is organized as a non-profit corporation. Non-profit hospitals are mostly funded by charity, religion or research/educational funds.

Nonprofit hospitals do not pay federal income or state and local property taxes, and in return they benefit the community. The various exemptions given to non-profit hospitals get scrutinized by policymakers, with the argument being whether they provide community benefits that justify forgone government tax revenues.

In 2003, of the roughly 3,900 nonfederal, short-term, acute care general hospitals in the United States, the majority—about 62 percent—were nonprofit. The rest included government hospitals (20 percent) and for-profit hospitals (18 percent). [1] In exchange for tax-exemptions, estimated to total $12.6 billion in 2002, nonprofit hospitals are expected to provide community benefits. [2]

Courts generally have rejected challenges to the tax-free status of non-profit hospitals by indigent patients who are forced to pay for services on the grounds that the question is a matter for the IRS and that the indigent patients lack standing. [3]

In the State of New York, all traditional hospitals must be non-profit by law. [4] Exceptions include outpatient surgery centers which can be for-profit.

A non-profit hospital, or not-for-profit hospital, is a hospital which is organized as a non-profit corporation. Based on their charitable purpose and most often affiliated with a religious denomination they are a traditional means of delivering medical care in the United States. Non-profit hospitals are distinct from government owned public hospitals and privately owned for-profit hospitals.

There are some exceptions, in California for example, professional medical corporations, University of California hospitals, county hospitals, narcotic treatment programs, some nonprofit organizations such as community clinics, and Knox-Keene-licensed HMOs are allowed to employ physicians directly.

California Health & Safety Code section 1206(I) exempts from licensure clinics operated by a nonprofit corporation (such as a medical foundation) if they meet certain requirements, including conducting medical research and health education, and providing medical care through a group of 40 or more independent contractor physicians and surgeons. The foundation's board must consist of physician, hospital and local community representatives, with affiliated physicians making up no more than 20 percent of the board's members.

It is for these reasons that organizations such as the Cedars-Sinai Medical Center restructured in 1994 to become the Cedars-Sinai Health System, comprising the Cedars-Sinai Medical Care Foundation, Physician-Hospital Organization and Cedars-Sinai Medical Center." [5]

Related Research Articles

A nonprofit organization (NPO), also known as a non-business entity, not-for-profit organization, or nonprofit institution, is a legal entity organized and operated for a collective, public or social benefit, in contrast with an entity that operates as a business aiming to generate a profit for its owners. A nonprofit is subject to the non-distribution constraint: any revenues that exceed expenses must be committed to the organization's purpose, not taken by private parties. An array of organizations are nonprofit, including some political organizations, schools, business associations, churches, social clubs, and consumer cooperatives. Nonprofit entities may seek approval from governments to be tax-exempt, and some may also qualify to receive tax-deductible contributions, but an entity may incorporate as a nonprofit entity without securing tax-exempt status.

Charitable organization Nonprofit organization with charitable purpose

A charitable organization or charity is an organization whose primary objectives are philanthropy and social well-being.

Free clinic Health care facility offering services to economically disadvantaged individuals for free or at a nominal cost

A free clinic or walk in clinic is a health care facility in the United States offering services to economically disadvantaged individuals for free or at a nominal cost. The need for such a clinic arises in societies where there is no universal healthcare, and therefore a social safety net has arisen in its place. Core staff members may hold full-time paid positions, however, most of the staff a patient will encounter are volunteers drawn from the local medical community.

A 501(c) organization is a nonprofit organization in the federal law of the United States according to Internal Revenue Code Section 501(c) and is one of over 29 types of nonprofit organizations exempt from some federal income taxes. Sections 503 through 505 set out the requirements for obtaining such exemptions. Many states refer to Section 501(c) for definitions of organizations exempt from state taxation as well. 501(c) organizations can receive unlimited contributions from individuals, corporations, and unions.

A nonprofit corporation is any legal entity which has been incorporated under the law of its jurisdiction for purposes other than making profits for its owners or shareholders. Depending on the laws of the jurisdiction, a nonprofit corporation may seek official recognition as such, and may be taxed differently from for-profit corporations, and treated differently in other ways.

Blue Cross Blue Shield Association Federation of 36 separate United States health insurance organizations and companies

Blue Cross Blue Shield Association (BCBSA) is a federation of 35 separate United States health insurance companies that provide health insurance in the United States to more than 106 million people. It was formed in 1982 from the merger of its two namesake organizations: Blue Cross was founded in 1929 and became the Blue Cross Association in 1960, while Blue Shield emerged in 1939 and the Blue Shield Association was created in 1948.

Health information exchange (HIE) is the mobilization of health care information electronically across organizations within a region, community or hospital system. Participants in data exchange are called in the aggregate Health Information Networks (HIN). In practice the term HIE may also refer to the health information organization (HIO) that facilitates the exchange.

Laws regulating nonprofit organizations, nonprofit corporations, non-governmental organizations, and voluntary associations vary in different jurisdictions.

A public hospital, or government hospital, is a hospital which is government owned and is fully funded by the government and operates solely off the money that is collected from taxpayers to fund healthcare initiatives. In some countries, this type of hospital provides medical care free of charge to patients, covering expenses and wages by government reimbursement.

LifeBridge Health is a nonprofit healthcare corporation that was formed in 1998 and currently operates several medical institutions in and around Baltimore, Maryland. These institutions include Sinai Hospital of Baltimore, Grace Medical Center, Northwest Hospital in Randallstown, Carroll Hospital in Westminster, Levindale Hebrew Geriatric Center and Hospital, a fitness center, and affiliated medical office complexes and subsidiaries.

Blue Shield of California American mutual benefit corporation

Blue Shield of California is a non-profit mutual benefit corporation and health plan founded in 1939 by the California Medical Association. It is based in Oakland, California, and serves 4.5 million health plan members and more than 65,000 physicians across the state. Blue Shield of California was founded as a not-for-profit organization. As of 2014, it is no longer tax-exempt in California and has been paying federal taxes for several years before that.

The Ithaca Health Alliance is a community-based health care cooperative based in Ithaca, New York. It incorporates financial and service assistance models to alleviate health care costs for its members and is a model for cooperative health care reform in the United States. The mission of IHA is to facilitate access to health care for all, with a focus on the needs of the un- and underinsured. IHA sponsors and operates the Ithaca Free Clinic.

Greater Baltimore Medical Center Hospital in Maryland, United States

Greater Baltimore Medical Center (GBMC) is a hospital located in the Baltimore suburb of Towson, Maryland. GBMC serves more than 20,455 inpatient cases and approximately 52,000 emergency department visits annually. GBMC's main campus also includes three medical office buildings—Physicians Pavilion East, Physicians Pavilion West and Physicians Pavilion North I. In addition to its main campus located in Towson, GBMC's care can be found in several facilities located throughout the community including Hereford, Hunt Manor, Hunt Valley, Owings Mills, Perry Hall, Lutherville, Phoenix and Timonium.

Medical foundations are nonprofit legal entities to allow physicians or certain other health care providers a mechanism to perform research or provide medical services. Medical foundations provide more flexibility for physicians and other providers. Foundations are often set up for charitable purposes, as a memorial or collective medical activity. Usually, they are organized as non-stock corporations and are eligible for federal tax exempt status.

A foundation in the United States is a type of charitable organization. However, the Internal Revenue Code distinguishes between private foundations and public charities. Private foundations have more restrictions and fewer tax benefits than public charities like community foundations.

A mutual-benefit nonprofit corporation or membership corporation is a type of nonprofit corporation in the US, similar to other mutual benefit organizations found in some of common law nations, chartered by government with a mandate to serve the mutual benefit of its members.

Heart of Mary Medical Center, now owned by OSF HealthCare, formerly Provena Covenant Medical Center is a 210-bed non-profit hospital in Urbana, Illinois, USA. It is part of the OSF HealthCare System, headquartered in Peoria. HMMC is accredited by the Joint Commission and the Commission on Accreditation of Rehabilitation Facilities (CARF).

Dialysis Clinic, Inc. is a nonprofit medical corporation founded in 1971 and chartered as a 501(c)(3) tax-exempt organization under IRS regulations.

Ontario Hospital Association

According to the Ontario Hospital Association (OHA) website, the OHA is a member association that represents approximately 154 public hospitals in Ontario. The association regards itself as "the voice of Ontario's public hospitals".

Philippine Health Insurance Corporation State-owned health insurance company of the Philippines

The Philippine Health Insurance Corporation (PhilHealth) was created in 1995 to implement universal health coverage in the Philippines. It is a tax-exempt, government-owned and controlled corporation (GOCC) of the Philippines, and is attached to the Department of Health. Its stated goal is to "ensure a sustainable national health insurance program for all", according to the company. In 2010, it claimed to have achieved "universal" coverage at 86% of the population, although the 2008 National Demographic Health Survey showed that only 38 percent of respondents were aware of at least one household member being enrolled in PhilHealth. Nevertheless, this social insurance program provides a means for the healthy to pay for the care of the sick and for those who can afford medical care to subsidize those who cannot. Both local and national governments allocate funds to subsidize the indigent.

References

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