For-Profit and Not-for-Profit Healthcare Systems

Organizations related to health operate in a system that is complex to give quality care to their patients. These institutions do not function the same since some are for-profit while others are not-for-profit. Those that are aligned to for-profit systems develop products and services that are consumed by their patients with the intention of generating income. The proceeds gained are later used in different ventures and distributed to shareholders as monetary gains. In the US, for example, for-profit organizations offer health insurance as a business, thus, sparking concern and alarm about other developments in the organization of health care. In Canada, Shouldice Hospital operates as a for-profit organization. It has a 99 percent success rate in providing normal, specialist, and hernia recovery treatments to its customers while also providing customized healing services (McCarthy, 2018). In contrast, the establishments that adopt the not-for-profit system do not primarily generate profits. They serve the community in their locality and are supported by trusts and charities, exempting them from paying tax.

Not-for-profit organizations such as American Red Cross are dedicated to a significant managerial design and plans to ensure they maintain a balance between their responsibilities to shareholders and patients. They have a considerable share in the United States healthcare system. For instance, they serve 70% of in-patients (Venter et al., 2017). Therefore, the professionals who work under this system are relieved from taxes and receive privileged management in the indenture procurement progression. In comparison, for-profit establishments are more financially stable than not-for-profit firms. The growth of the not-for-profit entities has been exponential, but they have also faced significant economic challenges. In the 2014 financial year, 76% of not-for-profit organizations registered surplus revenues, while their counterparts reported an inability to fund their operations and, in turn, struggled to meet their market demands (Venter et al., 2017). Therefore, both for-profit and not-for-profit entities should have forecasts of accurate revenue and expenses in every financial year. Thus, the financial report is important in for-profit and not-for-profit organizations since it will allow them in the progression of making decisions.

The for-profit organizations and not-for-profit firms, such as Shouldice Hospital, differ in terms of their source of funding. The not-for-profit firms are funded by private donations, which are provided to support the intended consumer. In addition, these nonprofit establishments can be subsidized by sponsors or grants from governments. On the contrary, for-profit organizations have sources that are secure to fund them, which means that they get finances from their products and services, loans, and interest from banks (McCarthy, 2018). The flow of revenue and subsidy in both systems are dependent on their budget. They also have an objective to meet the needs of the patients by providing health care services that will increase the outcomes. These structures have worked to improve the literacy of the clients and empower them to a healthier life.

There is a major gap in morale and satisfaction levels among professionals in for-profit and nonprofit organizations, in addition to social funding and designs. On the one hand, the practitioners of for-profit firms are more recognized for their work compared to the experiences they have had in the public sector (Venter et al., 2017). On the other hand, for-profit hospital workers face smaller hiring ratios and, therefore, face more job pressures. Furthermore, for-profit hospitals have fewer decent preparation and job openings but suffer from less exhaustion than nonprofit healthcare facilities (Venter et al., 2017). As a consequence of the reduced workforce rate and decreased dedication to the institution, the standard of healthcare suffers.

The facilities that operate on for-profit and not-for-profit systems take insurance as a method of compensation for the services rendered. However, for-profit medical amenities are likely to rampant their patients in order of preference, often treating those with private insurance first, followed by those with public insurance, and frequently excluding those that are uninsured. As a result, health inequalities among patients from lower socioeconomic backgrounds are increasing. Furthermore, nonprofit organizations are on inclined to provide programs that are not lucrative, such as psychiatric services.


McCarthy, M. (2018). New awards seek to highlight how “profit mongering” affects US healthcare. BMJ, k86. Web.

Venter, K., Currie, D., & McCracken, M. (2017). ‘You can’t win’: The non-profit double-bind and experiences of organizational contradictions in the non-profit and voluntary sector. Work, Employment and Society, 33(2), 244-261. Web.

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