For-profit hospitals have taken their fair share of flack over the years. Much maligned by many in the medical community, they are seen as money-hungry corporate machines that pervert the medical profession by putting the bottom line before patient care. This skepticism of profit-driven hospitals feels right. Medicine has long been the purview of charitable organizations and religious institutions. It’s supposed to be a calling — a public service to which practitioners are drawn — not a check to cash at the bank.
As for-profit hospitals proliferated, there was research done suggesting they had quality and cost issues stemming from their profit motives. For-profit hospitals had higher mortality rates, employed fewer trained professionals per bed, and were more expensive than their non-profit and government counterparts. Researchers speculated that this was the result of duties owned to shareholders by corporate leaders or compensation incentives for executives based on profitability rather than quality of care. These studies seemed to confirm what many thought they already knew: medicine and money don’t mix well.
More recent studies, however, suggest that for-profit hospitals may have turned over a new leaf. Since 2010, for-profit hospitals have out-performed non-profits in the “Top Performer” evaluation carried out by The Joint Commission — an organization that accredits hospitals in the US — with a higher percentage of for-profit hospitals qualifying for the honor than non-profits. A study published in JAMA from the Harvard T.H. Chan School of Public Health found that hospitals that converted from non-profit to for-profit improved their financial position by increasing their total margins and experienced no change in mortality rates.