Why Private Hospitals Should Maintain Nonprofit Status

Private Hospitals Should Maintain Nonprofit Status In the United States, there are three major classifications of ownership for hospitals: nonprofit, for profit, and government owned. According to the American Hospital Association (AHA), there were 5,724 hospitals in the United States in 2013 (Dunn et. al, 2013). Nonprofit hospital status ranks as the most common ownership classification with 2,984 of these hospitals claiming tax exempt status. This means that a staggering 61% of all hospitals report nonprofit status (Center for Health Affairs, 2005). Nonprofit hospitals are simply too important to the healthcare sector of our country to allow politicians to strip them of their nonprofit status. The word nonprofit appears frequently in our society and this is especially true within the healthcare sector of the economy. Nonprofits are most closely associated with the values of charity, altruism, and benevolence. These charitable hospitals are most commonly classified as 501(c)(3) hospitals. The nonprofit hospitals are exempt from state or local property taxes and federal income taxes with the understanding that the crucial services they offer will provide community betterment. The funds that are acquired by not paying taxes are filtered down to patient care and other collective goods. With

Examples of these specific requirements include, but are not limited to, submission of a Community Needs Assessment every three years and they cannot pay more than market price for transactions. Moreover, nonprofit hospitals must follow Stark Law which states that “a physician may not refer a patient for certain services to be reimbursed by federal healthcare programs to an entity with which the physician has ownership interest…” (Camden). Another important standard is that nonprofit hospitals have an Anti-Kickback Statue and must follow the Emergency Medical Treatment and Labor Act