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Not-for-Profit Health Organisations

By: Jo Johnson - Updated: 28 Oct 2012 | comments*Discuss
Health Healthcare Medical Insurance

Although all private hospitals must be run as a business in order to succeed, not all are run purely to make a profit as most people expect from a business. There are some organisations that are run privately, offer the same services as other hospitals and clinics but do not permit any profit making from the company.

These are called not-for-profit organisations which has a title that opposes traditional business goals. Most private healthcare companies are run as profit-based businesses but there are those that exist purely to improve patient services and health improvement.

What Do These Businesses Do With Any Financial Gains Made?

As it is against the company ethic of these companies to make money, they usually re-invest the money gained back into the business in order to improve and expand the services available to patients. By doing this they can grow the business every year, providing they are gaining financially each year.

This money may be spent on equipment, staff, staff training, advertising, introduction of new services or indeed expanding the existing services into new areas.They may also invest in research of new procedures, schemes or medications and ill be recognised when the products are developed.

What Benefits Does This Have To Current Patients?

Research has found that those companies operating on a not-for-profit basis can realistically offer lower costs to private patients than those that are aiming at making high profits. This is hugely in favour of patients and reflects well on the company as they will gain public favour and respect which will attract further business.

Do The Staff Differ?

Generally the staff in both for-profit and not-for-profit do not find huge differences in the two different forms of business and the staff should all perform their duties equally in both with no bias to either type of care. Patients care and welfare is paramount and the way in which the business is run should not influence how the staff care for their patients.

The only difference may be the types of equipment and services the hospital or clinic can offer and whether the staff have access tot hem but this really is not a staff issue more of a management issue.

It may be true that staff in for-profit organisation are more cost aware and may be little less thrifty with equipment and medical supplies especially in the past, but this culture is now spreading rapidly through all areas of healthcare including the NHS as funds become tighter and savings must be made in order to stay within allocated budgets.

This is an issue that managers must address with their staff and audit as necessary.The government are now very involved with healthcare budgets and insist that even NHS hospitals must find ways of saving and decreasing public expenditure.

There are many arguments both for and against for-profit and not-for-profits organisations and whether any healthcare company should be making a profit at all when the NHS appears to be constantly struggling. This is a highly political debate and not something that staff at patient level will have much influence over.

Most healthcare providers are not governed by managers who are specially trained in business management, budgeting and staffing issues.

If you have private health insurance or are planning to enquire about having your treatment provided privately, please do ask the customer service department of each of the privately run organisations in your region for information on the company ethic and whether they are a for-profit or a not-for-profit organisation.

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Hi Jo Nice article. Although from 2010, I wonder if you could reply to a largely semantics question I have. Is the NHS considered a 'Not for profit' Healthcare organisation. Or is it classified differently. If it is. Would this then be known as the UKs largest Not for Profit Healthcare organisation? A company called Nuffield Health claims that title. Are they justifeid in this claim? Many Thanks
Sam - 22-Jun-12 @ 12:27 PM
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