Non-profit hospital

The hospital industry in the United States includes a mix of ownership forms. Non-profit hospitals are the most common type, but for-profit and government hospitals also play substantial roles. A non-profit hospital, or not-for-profit hospital, is a hospital which is organized as a non-profit corporation. Non-profit hospitals are mostly funded by charity, religion or research/educational funds.

Nonprofit hospitals do not pay federal income or state and local property taxes, and in return they benefit the community. The various exemptions given to non-profit hospitals get scrutinized by policymakers, with the argument being whether they provide community benefits that justify forgone government tax revenues.

In 2003, of the roughly 3,900 nonfederal, short-term, acute care general hospitals in the United States, the majority—about 62 percent—were nonprofit. The rest included government hospitals (20 percent) and for-profit hospitals (18 percent). In exchange for tax-exemptions, estimated to total $12.6 billion in 2002, nonprofit hospitals are expected to provide community benefits.

Courts generally have rejected challenges to the tax-free status of non-profit hospitals by indigent patients who are forced to pay for services on the grounds that the question is a matter for the IRS and that the indigent patients lack standing.

In the State of New York, all traditional hospitals must be non-profit by law. Exceptions include outpatient surgery centers which can be for-profit.

The California Medical Practice Act, Business and Professions Code section 2052, provides: "Any person who practices or attempts to practice, or who holds himself or herself out as practicing...[medicine] without having at the time of so doing a valid, unrevoked, or unsuspended certificate...is guilty of a public offense."

Business and Professions Code section 2400, within the Medical Practice Act, provides in pertinent part: "Corporations and other artificial entities shall have no professional rights, privileges, or powers."

A non-profit hospital, or not-for-profit hospital, is a hospital which is organized as a non-profit corporation. Based on their charitable purpose and most often affiliated with a religious denomination they are a traditional means of delivering medical care in the United States. Non-profit hospitals are distinct from government owned public hospitals and privately owned for-profit hospitals. In 2003, of the roughly 3,900 nonfederal, short-term, acute care general hospitals in the United States, the majority—about 62 percent—were nonprofit. The rest included government hospitals (20 percent) and for-profit hospitals (18 percent). Courts generally have rejected challenges to the tax-free status of non-profit hospitals by indigent patients who are forced to pay for services on the grounds that the question is a matter for the IRS and that the indigent patients lacking standing.

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