Mar 8, 2022 - Health

For-profit hospitals skip less profitable services

Caitlin Owens

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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For-profit hospitals skip less profitable services

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