Understanding Not-for-Profit Hospitals: Definition & Key Characteristics

According to "The Washington Post," in 2005 there were nearly 5,000 not-for-profit hospitals in America. Not-for-profit hospitals are not required to pay federal taxes because of their status as charitable organizations.

Qualifications

• The United States Government Accountability Office states that a not-for-profit hospital is an organization that can demonstrate that its operations are for a "charitable purpose," that no part of the net earnings of the organization are given to a shareholder or individual and that there is no participation in political campaigns or lobbying activities.

Benefits

• According to a Harvard Medical School Press Release in 2006, patients receive a higher quality of care from not-for-profit hospitals. Not-for-profit hospitals consistently gave a higher quality of care to patients of three specific conditions: congestive heart failure, heart attack and pneumonia.

Considerations

• Most not-for-profit hospitals are affiliated with a religious group and have missions of helping the sick or poor with nothing in return. Adventist Health System, a Seventh Day Adventist not-for-profit organization, has 37 hospitals in 12 states across America, all of which have Christian missions.