Comparative Summary
Gilberto Colon
HCS/577
January 26, 2015
Benjamin Ovando

Comparative Summary
In the United States, health care is delivered by a complex mixture of government, not-for-profit, and for-profit financial structures. These three financial structures coexist and compete with one another. The financial environment of an organization consists of three major components the financial managers, investors and financial markets. Health care services are provided in a regulatory environment that is both different and more comprehensive than that affecting almost any other industry. In order to fully utilize all financial resources it is important that managers understand the organizations financial structure. During this paper we will compare the financial environment of for-profit Hospital name, not-for-profit San Antonio community hospitals and the San Antonio Military Medical Center. We will also compare the financial structure, polices unique to each financial environment and their management practices. Finally we will explain why financial management is more difficult in health care compared to other organizations.
Financial Structures The government financial structure makes up almost 25 percent of the health care organizations in the United States. These hospitals are divided into federal and public hospitals. The San Antonio Military Medical Center (SAMMC) is one of the federal hospitals in the United States. The San Antonio Military Medical Center is considered the Army’s most modernized health care organization. This organization is the Army’s only Level 1 Trauma Cent in the United States (US Army Medical Department, 2014). This federal hospital has approximately 450 inpatient beds of which 48 of them form the Intensive Care Unit. The health care organization has 12 operating rooms, four dental rooms, and five oral surgery rooms. This health care organization plays a critical role in the military health care system because it provides health care to all the Wounded Warriors and is also the only Department of Defense Burn Center in the United States (US Army Medical Department, 2014). The San Antonio Military Medical Center is a government organization; as a result of this it doesn’t have stockholders. The Department of Defense controls the financial aspect of the organization. The federal government funds this organization as a result the organization is affected when the federal budget is made. Based on the approval of the federal budget will determine the types of services that the organization will be able to provide. The financial structure of this government organization must generate some sort of revenue in order to pay for the operational expenses generated. The second financial structure that will be described will be the not-for-profit. Not-for-profit organizations are granted tax-exemption status by the Internal Revenue Code under Section 501(c)(3). Not-for profit organizations receive multiple benefits like tax exemptions for both federal and state income taxes as result of their charitable mission, community services and contributions. The Mayo Clinic is a not-for-profit health care system that has three major campuses within in the United States (Mayo Clinic, 2014). The Mayo Clinic is the largest integrated nonprofit health care system that employees over 3,000 physicians, scientist and over 50,000 health care staff. The Mayo Clinic has become the worldwide leader in medical care, research and education. All donations are accounted for and are reported to the federal government. Final financial structure is the for profit financial environment. The Houston Methodist hospital is considered to be the largest for-profit organization in the United States. This organization has nine acute hospitals and it provides services to over 86,000 inpatients and over 366,000 outpatients. It has more than 2,600 physicians and more that 9,000 medical staff (Houston Methodist, 2014). The stockholders of this organization are clearly defined and they are responsible for the control of the organization. All residual earning generated by the organization belongs to the stockholders. The profitability aspect of the organization falls on the management department of the organization. For-profit organization must pay local, state and federal taxes (Gapenski, 2008).
Unique Policies
There are many unique policies for each and one of these financial environments. Government operated health care organizations are primarily funded by the state or the federal government. Some of these health care organizations have the primary mission of providing health care services to low income, uninsured patients. The San Antonio Military Medical Center provides health care to all Department of Defense employees, their dependents and military service members. Government financial environments are not required to have charity programs because they are mandated to provide charity services by law. The San Antonio Military Medical Center organization has to account for their financial statements and whenever expenses to operate the organization increase, the revenue is affected.
Non-for-profit health care organizations like the Mayo Clinic don’t have shareholders. The board of trustee controls the organization as well as the residual earnings of the organization. The Mayo Clinic is mandated to provide a determine amount of free health care services. These services are provided to patients that are uninsured or cannot pay for health care services. The Mayo has a Charity Care policy that provides financial assistance to those that cannot afford to pay for health care (Mayo Clinic, 2014).
For profit health care organizations like Houston Methodist hospital has stockholders that are defined and who control the organization. Stockholder exercise their control by electing directors. They own all the residual earnings when the other organization like not for profit organization it is controlled by the trustees. Another unique policy in a for-profit health care organization is that they are not required to have charity programs. For-profit organization are required to provide emergency health care services to every patient seen at the emergency room regardless of being insured or not. For profit organizations have to pay taxes.
Financial Practices The financial practices of every health care organization impact greatly on the organization practices. If the Houston Methodist hospital fails to make any revenue the health care organization will be affected as a whole. The revenue made is responsible for allowing the organization to make payroll and pay bills. The Houston Methodist hospital keeps the patient responsible for paying the bill when the insurance company doesn’t pay the medical claim. Both
Not-for-profit and government organizations are somewhat similar but different at the same time. The Mayo Clinic is a privately own health care organization that is ran by charity and donations. The San Antonio Military Medical Center is operated by the federal government and is required to report to the Department of Defense.
Effective Management Difficulties
Effective management is more difficult in health care compared to other industries because the majority of the payments for services are paid by a third party agency instead of the patient. It is critical that health care managers understand the method of payment is because this will affect the financial decision they will have to make. Health care financial manager need to understand on how to contain cost, determine what type of financial strategies is needed, and how these strategies will impact services are provided.

Conclusion
We can clearly state that, for-profit, not-for-profit, and government health care organization has one primary goal and that is to provide the best health care service to the people. Financial structures are different from organization to organization; ever organization has to abide by a set of rules established by the state they operate and any other regulatory agency. The health care industry in the United States has an obligation to treat everyone needing health care services without turning them away. But this doesn’t mean that the organization cannot make you accountable for the payment of your debt.
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References
Finkle, S.A., & Ward, D.M. (2006). Accounting fundamentals for health care management. Retrieved from The University of Phoenix eBook Collection database
Gapenski, L. C. (2008) Healthcare finance: An introduction to accounting and financial management. (4th ed.). Chicago, IL: Association of University Programs in Health Administration.
Houston Methodist. (2014). Houston Methodist Leading Medicine. Retrieved from http://www.houstonmethodist.org/
Mayo Clinic. (2014). About Mayo Clinic. Retrieved from http://www.mayoclinic.org/about- mayo-clinic.
US Army Medical Department. (2014). San Antonito Military Medical Center. Retrieved from http://www.bamc.amedd.army.mil/sammc.asp.