Running Head: ARTICLE REVIEW: THE ROLE OF NON-PROFIT ORGANIZATIONS

IN HEALTHCARE SYSTEM: WORLD PRACTICE AND GEORGIA (REVIEW) 1

Article Review: The Role Of Non-Profit Organizations In Healthcare System:

World Practice And Georgia (Review)

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ARTICLE REVIEW: THE ROLE OF NON-PROFIT ORGANIZATIONS IN
HEALTHCARE SYSTEM: WORLD PRACTICE AND GEORGIA (REVIEW) 2

According to the article by Verulava, Jorbenadze, and Dangadze (2018) known as: The

Role of Non-Profit Organizations in Healthcare System: World Practice and Georgia (Review),

the health care market differs considerably from other economic fields. The difference is

associated with the form of ownership. Overall, the market is optimally oriented toward profit,

but the healthcare context boasts of having several forms of ownership of medical entities,

including for profit, state-owned, public-private partnership and non-profit organization. The

study focuses on evaluating the role of non-profit hospitals within the health care system. The

aspects of interest entail reviewing the characteristics of non-profit hospitals, including how their

behavior differs from for profit organizations, as well as establishing which entity is best suited

for meeting the growing demand for health services by the aging population.

From the findings presented by Verulava, Jorbenadze, and Dangadze (2018), the most

prevalent form of ownership in the healthcare market is the non-profit one. Based on the article,

non-profit hospitals constitute of more than 70-80% of the hospitals in Europe. Likewise, 57% of

the hospitals within the U.S. comprise of non-profit entities. The number of these organizations

has increased due to augmenting demand for affordable quality health care services.

More often, people misinterpret and consider the word ‘non-profit’ as an organization

which does not represent profitable enterprises. The article states otherwise. The authors affirm

that as a matter of fact, non-profit, and for-profit organizations, all strive to make profit. The

sentiments mentioned above are underscored by Dumalanede, Hamza, and Payaud (2020) who

affirm that non-profit organizations can still create economic value and become financially

sustainable whilst pursuing a social objective. The difference is epitomized through the manner

in which profit is distributed. In particular, the profit realized in the non-profit hospitals is

distributed and spent on enhancement of medical services that the hospital offers, acquisition of
ARTICLE REVIEW: THE ROLE OF NON-PROFIT ORGANIZATIONS IN
HEALTHCARE SYSTEM: WORLD PRACTICE AND GEORGIA (REVIEW) 3

diagnostic equipment and other vital medical tools, and improving salaries of the medical

workforce. Unlike non-profit medical institutions, for –profit entities distribute profits to the

owners or shareholders. Briefly, the non-profits organizations seek to satisfy the needs of

stakeholders, including patients, and employees, rather than owners as in the case of for –profit.

The other evident different between non-profit and commercial medical institutions

include tax payment. Based on the article’s findings, non-profit medical entities have a

considerable support from the government due to their role of providing services to poor and

low-income patients. They are perceived as charity organizations. As a result, their assets and

income are exempted from taxes. On the contrary, the tax benefits do not apply to for-profit

medical institutions. Besides, profit hospitals do not have the right of receiving public donations

because they are mean for the non-profit entities which offer medical services to vulnerable

population. In other words, non-profit medical entities play an important role of availing health

care accessibility to poor and low income patients.

Non-profit medical organizations are better suited to meet the augmenting demand for

health services required by aging populations. Deemed as charity organizations, non-profit

medical entities qualify for the government subsidies, as well as tax exemptions, which make

them idea for providing quality and highly affordable medical services that target people with

low-income or lower-middle household income. Feng, et al. (2020) articulates that the burden of

taking care of aging relatives, especially with disabilities , and the augmenting financial toll on

the family caregivers has raised concern among the researchers, policy makers, and the general

public. Therefore, creation of non-profit organizations, which provide affordable, high quality

and appropriate for the needs of aging population was essential. Overall, the suitability of non-

profit medical entities in caring for the needs of the poor materializes through affordability.
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HEALTHCARE SYSTEM: WORLD PRACTICE AND GEORGIA (REVIEW) 4
ARTICLE REVIEW: THE ROLE OF NON-PROFIT ORGANIZATIONS IN
HEALTHCARE SYSTEM: WORLD PRACTICE AND GEORGIA (REVIEW) 5

References

Dumalanede, C., Hamza, K., & Payaud, M. (2020). Improving healthcare services access at the

bottom of the pyramid: the role of profit and non-profit organisations in Brazil. Society

and Business Review , 15 (3).

Feng, Z., Glinskaya, E., Chen, H., Gong, S., Qiu, Y., Xu, J., et al. (2020). Long-term care system

for older adults in China: policy landscape, challenges, and future prospects. Lancet ,

396.

Verulava, T., Jorbenadze, R., & Dangadze, B. (2018). The Role Of Non-Profit Organizations In

Healthcare System: World Practice And Georgia (Review). Georgian Medical News ,

274.