For-profit hospital - Definition and Overview

For-profit hospitals are investor owned chains of hospitals which have been established particularly in the United States during the late twentieth century. In contrast to the traditional and more common non-profit hospitals they attempt to operate at a profit. Advocates claim they are able to provide better care at lower cost due to higher efficiency. The largest firm is Columbia/HCA, second largest, Tenet (formerly named NME, HealthSouth, the leading provider of rehabilitation services, is a third.

A similar institution is the for-profit HMO, now the predominate means of delivering medical services in the United States.

The secret to the success of for-profit medical providers is positioning themselves in the medical marketplace so that they offer profitable services while avoiding unprofitable areas. For example, they insure healthy people to the extent possible, avoiding the chronically ill. They avoid services such as emergency medicine which are likely to be used by the indigent while concentrating on well funded areas such as medical rehabilitation.

They have been criticised by elements of the medical establishment as providing inferior care at higher cost. See this commentary (http://www.cmaj.ca/cgi/content/full/170/12/1814) in the Canadian Medical Association Journal and this editorial (http://content.nejm.org/cgi/content/full/341/6/444?ijkey=eb607342c04dc1375af6d51723667fcae5df896c&keytype2=tf_ipsecsha) in the New England Journal of Medicine.

References

• Adapted from the Wikinfo article: http://www.internet-encyclopedia.org/wiki.php?title=For-profit_hospital