Why health care has become so expensive?

One reason for high costs is administrative waste. Hospitals, doctors, and nurses all charge more in the U.S. than in other countries, with hospital costs increasing much faster than professional salaries. In other countries, prices for drugs and healthcare are at least partially controlled by the government.

Is it appropriate for health care organizations to make a profit?

A health care system run by for profits will provide the greatest benefits at the least cost. First, for-profit health care will lower the costs of care. The amount we spend on health care every year has grown from $75 billion in 1980 to nearly $500 billion today.

Does for-profit medical care lead to abuse?

It found that 30 percent of claims submitted by for-profit homes were found to be improper; only 12 percent of claims from nonprofit nursing homes were improper. The growing number of for-profit nursing homes appears to be adding to the problems of waste, fraud and abuse that plague many nursing homes.

Do for-profit hospitals charge more?

After all the research was reviewed, the evidence against for-profit hospitals was conclusive: for-profits had 19 percent higher costs and 2 percent higher death rates.

How are profits used in a for-profit healthcare organization?

For-profit systems benefit from investors’ money and have more flexibility about which services they offer, often seeking more profitable ones. Plus, a for-profit can return profits to investors, as well as invest in the healthcare system. A nonprofit must invest profits back into the organization.

How does the role of nonprofit healthcare organizations differ from that of for-profit healthcare organizations?

For healthcare organizations, nonprofit status puts a premium on being community-oriented. For-profit healthcare organizations not only serve their communities but also must satisfy investors. Nonprofit health systems tend to have longer planning horizons than for-profit health systems.

Are for-profit hospitals more expensive?

On average, for-profit hospitals cost more than nonprofit hospitals by about 19\%. The reasons for this are varied. However, one of the contributing factors is the difference in technology. For-profit hospitals invest much more in medical technology than nonprofit hospitals.