The not-for-profit difference and hospital economics

This year, Bonner General Hospital celebrates its 60th anniversary. The hospital has provided healthcare services to our community since 1949, and while the hospital facility has changed over the years, the unwavering commitment of our staff has remained constant. The employees and staff at BGH continue to share a common dedication to caring for the health needs of our community.

As we begin the new year, I'll be sharing some information about Bonner General Hospital that you may not know, particularly as it relates to how our community hospital operates.

First, people are often surprised to learn that Bonner General Hospital is a not-for-profit hospital. Many assume that the hospital is either a for-profit entity (which distributes profits to shareholders) or a county hospital (which is fully supported by tax dollars). Neither is the case.

As a not-for-profit entity, Bonner General Hospital exists to fulfill its charitable mission of providing healthcare to all those who need it, regardless of ability to pay.

This not-for-profit status enables the hospital to provide medical services based on what the community needs rather than how shareholder profits will be impacted.  

Although Bonner General Hospital does not exist in order to generate profits for shareholders, it must still make money to keep its doors open. Likewise, the hospital must make money in order to:

n Purchase new technologies

n Update or replace its medical equipment and facilities

n Bring new medical services to the community, and

n Meet the community's growth demands.

Bonner General Hospital generates revenue in various ways, such as through the payments it receives for patient services, grants, nominal tax revenue (less than 2% of its annual budget) and fundraising. Like most other not-for-profit hospitals, however, BGH operates on a very limited financial margin which is complicated even more by the current economic crisis. The hospital must constantly juggle multiple factors that impact its bottom line, and many of those factors are outside of its control. For example, the reimbursement that the hospital receives from Medicare and Medicaid does not fully cover the cost of treating those patients, so the hospital must absorb the remaining expense.

We'll talk more about how the hospital is funded in a future column. But as you begin to think about your healthcare needs this year, make a point to become educated about the resources available right here at home.

n Lynda Metz is the director of community development at Bonner General Hospital.