Nonprofit health institutions better on outcomes, costs, study finds

Published: 2006-06-22

WASHINGTON (CNS) -- Nonprofit health care institutions do better in terms of both costs and health outcomes than their for-profit counterparts, according to an analysis of 162 previous studies published by Health Affairs, a journal of health policy thought and research. In the article, published online June 20, authors Mark Schlesinger and Brad Gray said that "nonprofit health plans were significantly more likely than for-profits to support safety-net providers and contribute to community health initiatives that benefit the poor." Schlesinger, a professor of health policy at Yale University School of Medicine, and Gray, a research associate at the Urban Institute in Washington, also found that: for-profit institutions "more aggressively mark up prices over costs and otherwise maximize revenue"; nonprofits "appear more trustworthy in delivering services, being less likely to make misleading claims, to have complaints lodged against them by patients, and to treat vulnerable patients differently from other clientele"; nonprofits are "typically the incubators of innovation," being more likely to develop services "for which there is not yet a market"; and nonprofits are "slower to react to change," and thus less likely to drop services or withdraw from markets when profit margins decline.

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