1. Read the paragraph below and then explain WHY you think that markets where more for-profit firms exist would be inherently more competitive? Why or why not?

Inherently it is not always that more the companies with for profit agenda will lead to a competitive scenario. However, Healthcare leaders say a hospital or health systems nonprofits or for-profit status isnt what leads it to profitability. Instead, its the health systems location, size, ability to extent and contribute to the local market. Nonprofits are in numerous ways facing the same struggles that for-profits are. The most important differences between the two types of systems are how each accesses capital, which one pays taxes and which one must offer community benefits. Nonprofits must serve the healthcare needs of the community. In return, nonprofit hospitals dont pay taxes. For-profit systems benefit from investors money and have more flexibility about which services they offer, often seeking more profitable ones.

Nonprofits need to prove a community benefit through their tax forms to maintain their status and exemption from federal, state and county taxes. Both nonprofits and for-profits must offer charity care.

So it is not always that only for profit companies lead to competition. With the mixture of profit and non profit firms both jointly possess the same threat to each other, keeping many factors in mind such as performance, profitability and service offerings.

References

Burns, L. R., Bradley, E. H., & Weiner, B. J. (2011). Shortell and Kaluzny's health care management: Organizational design and behavior (6th ed.). Cengage Learning.