One foot on a banana peel? You're better off at a nonprofit hospital.

                                              Are Non-Profit or For-Profit Hospitals Better?

If you are really sick and almost dead, new research indicates you are better off at a nonprofit hospital than a for-profit hospital. Especially if its gonna cost a lot to save your worthless ass.  By worthless, I mean unable to contribute to a hospital's bottom line. I have not read the whole 65 page article, but check out this rather morbid abstract for a paper posted a few days ago:

We compare the effects of external financing shocks on patient mortality at nonprofit and for-profit hospitals. Using confidential patient-level data, we find that patient mortality increases to a lesser extent at nonprofit hospitals than at for-profit ones facing exogenous, negative shocks to debt capacity. Such an effect is not driven by patient characteristics or their choices of hospitals. It is concentrated among patients without private insurance and patients with higher-risk diagnoses. Potential economic mechanisms include nonprofit hospitals' having deeper cash reserves and greater ability to maintain spending on medical staff and equipment, even at the expense of lower profitability. Overall, our evidence suggests that nonprofit organizations can better serve social interests during financially challenging times. 

The authors are Janet Gao, Tim Liu, Sara Malik, and Merih Sevilir.  Here is a little more from the Introduction:

Nonprofit institutions are an indispensable part of the U.S. economy, accounting for over 20% of U.S. firms (Adelino et al., 2015). Unlike for-profit firms that seek to maximize profit for shareholders, nonprofit entities are owned by various organizations such as charities, academic institutions, religious groups, and governments, and are set up to serve a certain mission. Aside from the differences in corporate structure and objective, nonprofits also face a different set of regulations governing how they allocate financial resources compared to for-profit firms. Namely, nonprofits are tax-exempt and cannot distribute excess earnings. These regulations may affect the way nonprofit organizations manage liquidity and respond to fluctuations in external financial markets

Look, if I get really sick, take me to University Hospital, or Sisters of Mercy.  Don't take me to that fancy place.  

 

darryll k. jones