Saturday, October 09, 2010

Not-for-Profit vs. Commercial Hospitals

The long-running debate over whether hospitals should be operated as not-for-profit or as commercial organizations is brought to mind by the desire of the Boston Archdiocese of the Catholic Church to sell its hospitals – years ago consolidated into a not-for-profitn organization named Caritas - to a commercial company.

Hospitals were created initially to care for the poor. Not-for-profit status made it possible for them to accept donations from both public and private sources and to engage in charitable work.

With the development of health insurance and the expansion of government financing, patient care became less and less a matter of charity. To an ever-increasing extent, hospitals were able to charge and collect for services rendered.

As their sources of income grew, hospitals became attractive as businesses and began to attract commercial interest. A number of commercial hospital companies came into being and continue to operate.

A common point of concern has been whether the commercial hospital’s loyalty to its owners would outweigh its responsibility for the welfare of patients. Offsetting that concern was the professionally and economically independent medical staff. Doctors had the primary role in clinical matters and in that sense stood between the patients and the hospital.

But that is changing. To an ever-growing extent, hospitals are taking an active role in clinical matters. Protocols, guidelines, checklists and other measures intended to improve clinical quality and safety, as well as to control costs, are hospital-based and rely on the corporate authority of the hospital for their implementation. Furthermore, more and more physicians are becoming financially dependent on the hospital, as salaried employees or by means of other forms of affiliation.

All of this raises again the question of whether the priority of the commercial hospital will be to serve its patients or its investors. While the ability of the medical profession to offset such concerns is diminished, perhaps the new emphasis on safety and outcomes will suffice to assure that the interests of patients are protected.

Speaking for myself, I’m not so sure. If I am ever in the position of having to choose between a not-for-profit hospital and a commercial one, I think I will go with the former.

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