For-Profit Hospitals Are More Transparent Than Non-Profits

Go to the Web site of any publicly traded profit-making corporation — e.g., the Hospital Corporation of America — and click on the tab “Investor Relations.”

You will find tabs for annual reports to shareholders and the mandatory filings made to the Securities and Exchange Commission. Among them are 10-K’s, annual reports that are detailed and audited. There is also great detail on the criteria by which executive performance is evaluated by the board of directors, along with dollar figures of actual compensation paid.

Is there anything like this transparency and public accountability in the nonprofit sector? Indeed, who actually owns these entities? To whom do they render account for the sizable real resources and finances under their control? And what benefits do they deliver in return for the exemption from income taxation they enjoy?

More from Uwe Reinhardt.

Comments (10)

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  1. Gabriel Odom says:

    The point here, is that these non-profits are “answerable to the community”. However, the “community” often has no vested interest in the management of these affairs. Once we introduce the profit motive, however, suddenly people find these otherwise dull stacks of paperwork with heightened enthusiasm.

  2. Tom Al says:

    This is a matter of human incentive. Provide profit incentive dependent on transparency and it will result in better outcomes than any other form of incentive.

  3. Andrew says:

    I am not surprised by this. Granted, transparency is ultimately inherent in the people that comprise the organization, so, of course, there will be certain non-profit organizations more transparent than some for-profit organizations, and vice-versa. The problem with non-profits is that they are too dependent on exterior support, which at some point can conflict with transparency if it wants to be sustainable.

  4. Andrew says:

    I think non-profits and for-profits in the health care industry are compared differently than in other industries.

  5. Jacob Druisdael says:

    Wasn’t Susan G. Komen investigated for something similar?

  6. Travis Murphy says:

    So they get terrible customer satisfaction ratings and they’re corrupt?

  7. Hayley Jones says:


    I slightly disagree with you. Just because you may find some of the information they provide uninteresting on these ‘websites”, doesn’t mean everyone else feels the same way about it. This may be very relevant to other users. Granted, when you add the profit motive, as you described it, it certainly makes people more enthusiastic about it. Regardless, their transparency is a big plus to how they run their business.

  8. James H says:

    Andrew, you make a good point. However, transparency is what makes costumers rely on you and trust you, as a business. Whether you are “too dependent” on exterior support or not, that shouldn’t be an issue if you got nothing to hide.

  9. Bobby K. says:

    It’s quite appealing to see for-profit hospitals trying to be honest and truthful to their communities about their services and their business as a whole. This, in a way, creates a sense of reliance and trustworthiness from a patient’s perspective. However, I’m not sure how these specific aspects they are so transparent about are of any importance to us (regular civilians). Do they really matter?

  10. Gabriel Odom says:

    I was simply making the observation that very select few people read IRS 990s for fun.