Profit vs. Nonprofit Healthcare and Organizations

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Profit vs. Nonprofit Healthcare and Organizations Purpose: The purpose for this research is to conduct a comparative analysis of nonprofit and for-profit healthcare organizations. I will define the characteristics of each type as well as what factors affect the operation of both. In addition I will discuss financial and operational challenges along with areas of improvement. The Comparison: Before discussing the healthcare portion I think it’s important to define nonprofit and profit. The mission of a nonprofit organization benefits the greater good of the community, society or the world. For profit organizations benefits the owners and shareholders financially and profit is their goal. Nonprofits are tax exempt and cannot use their funds for anything other than the mission they were formed for. Nonprofits are allowed to make a profit but it can only be used for the operation of the organization. When a nonprofit organization goes out of business its liquidated assets proceeds are given to another nonprofit organization whereas in a profit organization the liquidated assets proceeds are split among the shareholders and owners. . (Fritz, 2013) Not-for-profit hospitals are organized under the Section 501 (c)(3) of the Internal Revenue Service (IRS) tax code, and as such, are exempt from federal and state taxes and generally from local property and other taxes. Not-for-profit hospitals also have access to tax-exempt bond financing and have tax-deductible status for gifts and contributions (Barton, 2010) According to Heleni Smith private hospitals can classify as profit or non-profit, however nonprofit makes up the majority of hospitals in the United States. The regulatory rules are what separate the two. Nonprofit are not required to pay property, sales or income taxes. On the other hand in spite of their differences they are becoming similar as
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