Is For-Profit Healthcare Hurting Patients?

In TV medical dramas, it often happens that a patient comes into the hospital with troublesome, mysterious symptoms. She is immediately seen by a world-class doctor, who involves the other exceptional doctors at the facility in the medical mystery. Everyone drops what they are doing, every possible test is run, and every possible resource is devoted to this patient and her needs. By the end of the hour, the patient is not only diagnosed and treated but on her way to a full recovery.

Anyone who has ever spent time in a real hospital emergency room awaiting treatment knows that the scenario above is fiction. Waits are typically long, and time with overworked doctors is often short. Even so, when you visit a doctor or go to the hospital, you should be able to assume that their treatment decisions are driven by what is best for your health. Most of us do assume that, and trust our doctors when they give us a diagnosis or discharge instructions.

Unfortunately, doctors in the real world are driven by more than just a desire to diagnose, treat, and cure patients at any cost. In a for-profit healthcare system, the need to maximize profits can come at the expense of patient health.

What is a For-Profit Hospital?

A for-profit hospital is one that is owned by investors. Like any investor-owned business, the goal is to earn profits for shareholders. That is not to say that a for-profit hospital necessarily provides worse care than a not-for-profit (NFP) hospital. In fact, there are arguments that the opposite might even be true.

For example, many professionals assert that a for-profit healthcare system operates more efficiently, keeping costs down. A for-profit system may help a hospital that was struggling to bring more resources and better management on board. And for-profit hospitals may have better access to cutting-edge technology and be better positioned to provide advanced care.

With all of that said, however, for-profit healthcare systems do not excel in every area of patient care and treatment. It is worth noting the downside of these for-profit providers.

Where For-Profit Healthcare Falls Short

Whether a hospital is for-profit or NFP, it is required by the federal government to provide stabilizing care at no cost to any patient who seeks assistance. In other words, if you are brought to the ER with a possibly life-threatening injury or illness, the hospital must save your life before it can ask you to pay for treatment.

It’s what happens after you are stabilized that may differ between for-profit and NFP hospitals. An NFP hospital, which is treated as a charity for IRS purposes, is obligated to treat all patients, whether or not their condition is life-threatening, and without regard to their health insurance or financial status.

A for-profit hospital, on the other hand, can lawfully discharge a patient who needs further care but is unable to pay for it once they are stabilized and out of immediate danger. It’s not difficult to imagine that a discharged patient who lacks insurance or savings might not seek follow-up care for a serious condition because they simply cannot afford it.

Even when a patient needs further care is unable to be discharged to the community, a common technique is for the for-profit hospital to transfer the patient from the ER to a community hospital. In one case, a young uninsured man was brought to the ER of a for-profit hospital with a serious stab wound. He was “stabilized” in the ER before being transferred to a nonprofit community hospital where he died shortly after admission. The patient’s family believed that the for-profit hospital was concerned only in fulfilling their minimum legal obligation, and not in doing what was truly best for his care.

Another criticism of for-profit healthcare is that it may lead doctors to decline diagnostic testing that they might have ordered out of caution if profit were not a consideration. One example of this is a seven year-old boy who suffered a deep puncture wound just below his eye. The doctor removed the debris from the boy’s face, cleaned and closed the wound, and provided antibiotics. Despite the treatment, the child continued to complain of pain after discharge and developed a high fever. The doctor refused to perform the CT scan the little boy’s guardian requested.

The stated reason that the doctor refused the CT was that he did not find it medically necessary. Whether or not this was true, two other facts are not in dispute. First, the cost of the scan (nearly a thousand dollars) would have been deducted from the amount that the hospital was reimbursed per patient for treatment of that type of wound. The second fact is that the boy suffered permanent, disabling injury from a brain infection caused by his original injury. Had the doctor ordered the scan, the infection would have been identified and treated in time to prevent serious harm.

Are For-Profit Hospitals Safe?

Despite stories like the ones above, numerous studies have found for-profit hospitals not to have higher mortality rates than NFP hospitals. That said, it is not hard to imagine that the constant pressure to maintain profits for shareholders might not affect treatment decisions and outcomes.

If you believe that your doctor or hospital did not uphold the standard of care in your treatment, and you suffered injury as a result, it’s best to speak with an experienced medical malpractice attorney. An attorney familiar with these cases can advise you whether you have a claim against your medical care provider. We invite you to contact Huegli Fraser to discuss your situation and your options.