Non-Profit vs. For-Profit Healthcare Organization


This paper will address the difference and similarities between nonprofit healthcare and for-profit healthcare organizations. However, to understand more about each organization, this report will discuss both impacts and factors that entail the operation in each organization. Options to improve operation and financial performance concerning the nonprofit organization will also be presented within this analysis. In addition, this paper will discuss the criticisms that are even at for-profit organizations.

For-Profit Health Care Organizations

For-profit companies are normally owned by shareholders, who can vary from big companies that run or own various healthcare facilities to self-reliant organizations owned by regional investors. For-profit companies produce money for their investors as their motivation to enhance and preserve the organization’s economic worth (Moon & Shugan, n.d.). Eventually, the board of directors is elected to govern the for-profit company as owners (Habitat for Humanity, 2019). The board of directors makes strategic decisions and recruits the company’s top management. A variety of features, such as overall culture, operation management, and ownership in for-profit, have been determined by the not-for-profit organization.

The organization’s ability to survive depends on its capability to produce revenue above and beyond what is required to cover operating costs. Operating expenses can involve employee earnings, equipment, general maintenance of the facility, and renovations. For-profit institutions should continuously develop methods to generate and maintain revenue, leading to a possible impact on the general operation. Luckily, a for-profit company can access funds, unlike its nonprofit complement, that can be used to cover operation expenses, improve facilities, and buy medical apparatus. A for-profit can move fast due to the provision of ready access to capital. For-profit companies tend to center more on finance within the culture due to their target of commercial gain. Concerning the for-profit institution’s culture, it will frequently open to criticism. Nonprofit hospitals, unlike for-profit hospitals, have to respond to investors, who cannot encounter the same profits as the neighborhood. Critics also notify that for-profit health centers are to be expected to discontinue donations that are money-losing facilities.

Nonprofit Health Care Organization

Despite its tag, nonprofit companies are not forbidden from earning interest from their performance. Any interests produced as promised by the company must be loyal to the extra production and financing of the resources. Nonprofits must generate enough wages to hunt their communal duties, but they are not managed by producing profits (Jeurissen et al., 2021). The Discovery of methods to increase revenues is always a consideration factor that can influence performance within a nonprofit institution, leading to new forms of raising money by the nonprofits (Moon & Shugan, n.d.). This method includes foundations, revenue government funding, donations from single donors, and sponsorship from firms.

Nonprofit healthcare companies, like their for-profit complement, should control their resources and achieve their goal. However, a nonprofit’s mission does not rely on making a profit but should still run as a business. One critical method that nonprofits gain income is the ability to become an expert in coming up with business to work with cash which shows help when appealing for grants. A nonprofit will always require balancing the aspects to possess a victorious company (Collins, 2018). As much as non-profiting-making should consider goal career, their community culture is frequently further aligned with a distinct like solving and addressing issues that could encounter small to no financial motivation (Habitat for Humanity, 2019).

Improving Financial and Operational Performance in Nonprofit Organizations

There are two ways for a nonprofit healthcare company to archive success as a for-profit company. One method is through the expansion of workers who are willing to join the organization. Many nurses and physicians who are professionals in current healthcare are individuals who are almost retiring. The retiring of experts from this healthcare may lead to a shortage of employees hence developing necessary personnel. Successful healthcare generations are fewer in number and are less likely to go after healthcare jobs that are noticed as less entrepreneurial, less respected, stressful, and normally extra work and rarely fun in old times. Nonprofits need to have a successful development employee to attract and employ trained healthcare professionals.

The second method is fund evolution, where it allows nonprofits to develop their services in reaction to the elderly individuals who will need professional staff in their healthcare. Expenses from welfare care can be conducted through yearly fundraising, which nonprofit healthcare companies constantly do (Collins, 2018). Crucial gifts and a combination of these funds can be helped by fund analysis that leads to attracting trained healthcare professionals.


Both for-profit and nonprofit healthcare companies vary in many features, such as organizational culture, ownership, and management. Although both corporations have differences, they still have a common mission to supply services to those in need. Criticism will always be part of a for-profit firm due to its commercial culture. For-profit companies are required to work on methods of upgrading their profile to the company they serve. Nonprofit companies will consistently need new creative approaches to increase funds for the main distinct of manufacturing to become a more commercial and fruitful venture.


Collins, S. A. (2018). Strategies for Identifying and Selecting Performance Measures of Effectiveness for Nonprofit Organizations. CORE – Aggregating the world’s open access research papers.

Habital for Humanity. (2019). 6 differences between for-profit and nonprofit organizations. Habitat for Humanity.

Jeurissen, T., Kruse, F. M., Patrick, P., Busse, R., Himmelstein, D. U., Mossialos, E., & Woolhandler, S. (2021). For-Profit Hospitals Have Thrived Because of Generous Public Reimbursement Schemes, Not Greater Efficiency: A Multi-Country Case Study. SAGE Journals: Your gateway to world-class research journals.

Moon, J., & Shugan, S. N. (n.d.). Nonprofit vs. For-Profit Healthcare Competition: How Service Mix Makes Nonprofit Hospitals More Profitable. Redirect to Warrington College of Business Administration.

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