Mar 8, 2022 - Health

For-profit hospitals skip less profitable services

Illustration of a hospital emergency room with different colored shapes around it.

Photo illustration: Brendan Lynch/Axios. Photo: Linh Ta

Nonprofit and government-owned hospitals are more likely to offer relatively unprofitable services than for-profit hospitals, according to a new study published in Health Affairs.

Why it matters: Nonprofits' financials are often evaluated based on factors like how much charity care they offer and how they pursue patient debt.

  • But the study argues that it's also important to look at which services hospitals offer — including when considering policy that would require nonprofits to offer more free care.

The big picture: Nonprofit hospitals — which are tax-exempt — have repeatedly come under fire over the last several years for aggressive debt collection practices, like lawsuits and wage garnishments.

  • But the study's authors warn that requiring nonprofit hospitals to offer more uncompensated care could have unintended consequences.
  • "Because most nonprofits have small or negative margins, onerous free-care requirements may force them to eliminate relatively unprofitable services that disproportionately benefit poor patients," the authors write.

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