ArticleThe Paradox of the Not-for-profit HospitalHarrison, Jeffrey P. MBA, MHA, PhD, FACHE; Sexton, Christopher MPAAuthor Information From the University of North Florida, Jacksonville. Corresponding author: Jeffrey P. Harrison, MBA, MHA, PhD, FACHE, Health Administration Program, College of Health, University of North Florida, 4567 St. Johns Bluff Road South, Jacksonville, FL 32224 (e-mail: [email protected]). The Health Care Manager: July/September 2004 - Volume 23 - Issue 3 - p 192-204 Buy Abstract This quantitative research study assesses the organizational characteristics, market factors, and performance of not-for-profit hospitals in the United States. These results have managerial implications related to hospital efficiency, organizational performance, and the role of not-for-profit hospitals within local communities. The study has policy implications on access to clinical services within local communities, the availability of charity care, and the long-term viability of the not-for-profit health care industry due to potential bankruptcy and closure. This study clearly demonstrates that not-for-profit hospital managers are faced with declining profitability and are challenged to reduce hospital-operating expenses while meeting their charitable mission. Additionally, the greater size and increased clinical complexity of not-for-profit hospitals are increasing organizational overhead. In many cases, the increased clinical complexity is a commitment to the organizational mission of providing a full range of services to the community. From a policy perspective, the study suggests that not-for-profit hospitals have aging facilities and reduced cash flow due to lower profit margins. As a result, many not-for-profit hospitals face potential bankruptcy and closure. This study clearly documents a threat to the provision of charity care in local communities and the long-term viability of the not-for-profit health care industry in the United States. © 2004 Lippincott Williams & Wilkins, Inc.