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Vivien Hoexter Headshot

The Case for Nonprofit Hospitals

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Those of us who have worked in the healthcare field were not surprised to learn that cardiologists at HCA, the nation's largest for-profit hospital chain, were performing unnecessary tests on patients who might have responded better to drugs. As former CEO of Gilda's Club Worldwide, a cancer support organization, I heard a lot about hospitals all over the country. The people with cancer who came through the doors of our clubhouses said many things - often uncomplimentary - about the hospitals and facilities where they went for treatment. Usually, the complaints involved for-profit hospital organizations.

It is inevitable that for-profit hospital chains will continue to grow and absorb other hospitals. For-profit chains have access to investors' money that nonprofits will never have. However, there is an inherent conflict between fiscal obligations to the for-profits' investors and moral/medical obligations to the patients' best interests. The challenge is to make for-profit hospitals behave enough like nonprofit hospitals in the ways that matter: patient safety and best outcomes.

Having worked in both the for-profit and nonprofit sectors, I have a clear understanding of the different bottom lines of corporations and nonprofits. When I was a marketing manager at a large food company, my primary goal - other than making sure the products were safe - was to figure out how to sell more of them with the lowest cost inputs for the highest possible profit. Our bosses evaluated us on many things, including sales, but profit was a primary element in our annual reviews. I left that world because I resonated more with the nonprofit bottom line, the one that says that as long as an organization breaks even or has a modest surplus, all is well.

Don't get me wrong. I strongly believe that nonprofits have much to learn from the corporate sector. I am a firm proponent of the idea that nonprofits have to be run like businesses in the ways that count: good planning, clear accountability, strong processes and systems. It is just that profit is not a strong motive. In fact, it should not be a motive at all. And that means nonprofit hospital executives are free to focus on patient safety and are less likely to condone unnecessary procedures, as these HCA executives seem to have done.

It is clear that more regulation and oversight of these large hospitals is necessary. Let's leave it to the experts to figure out how much, and how those regulations should be implemented and enforced. Let's also support those who want to strengthen and nurture the nonprofit hospitals that serve such an important purpose in our nation's healthcare system.