Should government intervene to protect nonprofits?

The emergence of investor-owned firms as major actors in U.S. health care financing and delivery has led to calls for federal and state intervention to protect nonprofits and to stem the for-profit sector's growth. High-profile scandals involving some of these firms have lent urgency to such proposals. This paper considers the case for government intervention to protect the nonprofit health sector. The controversy over the comparative merits of nonprofits and for-profits is reformed as a debate over the potential and limits of government action, and the case for a general presumption favoring protection for nonprofits is found to be unpersuasive.