Scorecard for Non-Profi t Entity
One company, which will be referred to as Medical Non-Profit here, ran a number
of facilities around the United States. These facilities cared for a rather specialized
kind of patient and as such, all their money came from federal and state contracts.
C h a p t e r 1 : T h e C a s e f o r B u s i n e s s I n t e l l i g e n c e 17
Because their cost per patient was fixed, they worked hard to keep occupancy high,
but had little actual control over occupancy in most cases. Therefore, nearly their
entire focus was on controlling costs. In order for a facility to run smoothly, it had to
operate at a profit, for even nonprofit organizations can??™t operate at a constant loss;
nonprofit simply means any profits are reinvested and not held by the company or
given away as dividends.
Medical Non-Profit had facilities across the United States, each with its own
unique contracts and circumstances. However, at all centers a few things remained
the same: people needed to be fed, the lights had to stay on, rent on the building or
land had to be paid, and workers at those facilities had to be paid. There were many
other expense categories, such as maintenance, water, office supplies, fuel costs, and
more, but the four expenses that dwarfed all others were food, electricity, rent, and
salaries. All costs were broken down on a per-patient basis and facilities with lower
per-patient costs in each category were deemed better than those with higher costs.
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