Changes and Challenges of Non-profit Health Care Organizations – Health System Example

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"Changes and Challenges of Non-profit Health Care Organizations" is a fantastic example of a paper on the health system.   Health-care organizations underwent a number of changes during the last years. The given paper will discuss non-profit health care organizations, the specificity of their activity, historical events and the important changes and challenges. Impact on non-profit health care organizations Introduction Non-profit health care organizations are hospitals,   which act as non-profit companies. Non-profit health care organizations’ activity is founded on their beneficent goals and they usually have connections with religious groups. Non-profit hospitals represent the traditional way of health care providers in the USA.

They are different from medical organizations owned by government and private health care organizations (Sasso, 2003). According to the data received in 2003, by that time in the United States, there were approximately 3,900 nonfederal medical organizations providing high-quality service. More than half of these hospitals were nonprofit. However, in recent years, the medical care field went through serious changes and reforms (Sasso, 2003). Historical events and important changes and challenges of non-profit health care organizations The reforms non-profit medical organizations went through have a long history.

  Non-profit health care organizations always were free from taxes. However, with the appearance of Medicare and Medicaid in the 1960s it became necessary for non-profit medical establishments to prove that they are really beneficial for society. McClellan states: “ In recent years, several researchers have used available data sets and carried out new case studies to study conversions. They have learned that affected hospitals tended to be in v poor financial condition prior to sale, that this condition sometimes improved after the sale, and that little change occurred in uncompensated care provided by the hospitals.

These studies have shed much light on the conversion phenomenon, but they have concentrated on relatively short-term consequences” (McClellan, 2000). The 1960s – the appearance of Medicare and Medicaid; The 1980s- the non-profit hospitals started to be purchased by for-profit; The 1990s – the change of Medicare payment methods; 1997 – the investigations were held that revealed a number of frauds in non-profit hospitals’ activity; the number of non-profit medical organizations has been significantly decreasing, and more non-profit hospitals changed their status for for-profit; These alterations encouraged economists to think about two main questions: what makes non-profit health care organizations change their status and what consequences that may have for society. Today nonprofit hospitals, like other non-profit organizations suffer from the lack of people’ s confidence.

It is a well-known fact that non-profit hospitals have serious debts and with the appearance of for-profit hospitals with high-quality and managed care people prefer to apply there. Even if the hospital has a good reputation people usually do not want to trust. This lack of confidence results in the refuse of financing organizations to provide non-profit hospitals with funds.

Thus, they are forced to change their status to for-profit. Some scientists state that the activity of non-profit hospitals is more unstable than in other non-profit organizations like educational institutions. In order to make their activity more stable non-profit medical care organizations try to implement the appropriate management of balance sheet assets to have more income from investments. Therefore, many of them are creating more complicated investment plans that usually imply putting up to private assets. Many non-profit medical care organizations created investment appraisal and can manage financial risk due to good structure and well-considered strategies (Griebl, 2006).

    Conclusion Due to the historical events and current economic situation non-profit medical organizations face a lot of problems. The conclusion can be made that every non-profit medical care establishment should create a well-considered investment strategy and rationalized investment management system. In the current economic situations, this is the only way to decrease their debt, restore the trust and save their status.


McClellan, Mark B. (2000). Comparing Hospital Quality at For-Profit and Not-for-Profit Hospital, Stanford University;

Sasso, Peggy. (2003). Searching for Trust in the Not-for-Profit Boardroom: Looking Beyond the Duty of Obedience to Ensure Accountability, 50 UCLA L. Rev. 1485;

Griebl, Oliver, Muchnick, Joe, Skalka, Christi. (2006). Why not-for-profit hospitals need to adopt the pricing strategies of for-profit institutions to stay alive, Deloitte Development LLC.

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