...in the Webliography to find a research article(s) (no older than 2001) related to nonprofit versus for-profit healthcare and organizations. Analyze the characteristics of each type of organization and the factors that impact operations. Discuss options to improve the financial and operational performance of nonprofit organizations and the criticisms leveled at for-profit healthcare organizations. Define: characteristics a feature or quality belonging typically to a person, place, or thing and serving to identify it. Define: Analyze examine methodically and in detail the constitution or structure of (something, esp. information), typically for purposes of explanation and interpretation. Characterists: accepting patients community benefits monetary payments "More important, most doctors in a for-profit practice own that business and have complete decision-making autonomy. Doctors in nonprofit settings have no stake in the practice, and major decisions must be okayed by a board of directors." (school) "To be sure, the very nature of hospital payrolls means fewer benefits for physicians. Doctors in private practice can sock away as much as $30,000 annually in a tax-deferred SEP-IRA, or similar plan. But contributions to a nonprofit hospital's plan are capped at $10,000. That's because a private practice can skew its benefits to favor the high earners. In a hospital, with hundreds of employees clamoring for slices of the benefits pie, it's illegal to carve...
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...Non-Profit versus For-Profit Healthcare and Organizations In analyzing the characteristics in relation to nonprofit versus for-profit healthcare and organizations I found an interesting article from the Congressional Budget Office [CBO] (2006), which breaks down the ownership types of hospitals nationally. Based on 4,518 community hospitals, 58 percent are non-profit, 18 percent are for profit, and the remaining 24 percent are government owned hospitals. Non-profit hospitals were established for charitable purposes and tend to be larger, and are more likely to be teaching hospitals. They also are responsible and accountable to the communities they serve. They are governed by leaders of the communities they serve. Earnings received from the non-profit hospitals are reinvested to improve quality and care provided at the hospitals, and also invested in community programs, such as providing no fee or discounted fees to the uninsured and low income for health care services. Non-Profit healthcare organizations mission is to serve communities by providing healthcare without regard for a patient’s ability to pay. For-profit hospitals are legally responsible to their owners and stockholders and performance is based on profitability and the return on equity to its shareholders. Profits from earnings can be distributed to owners and stockholders. There are also tax treatment differences for the for-profit and non-profit hospitals. (CBO, 2006) The non-profit...
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...Profit vs. Non Profit Healthcare Organizations Prepared By: Milton Flores Table of Contents I. Introduction……………………………………………………………………………………………………………………………………3 II. Definition of Non Profit Health Care Organization………………………………………………………………………….4 III. Definition of Profit Health Care Organization…………………………………………………………………………………4 IV. Issues facing Non Profit and Profit Health Care Organizations……………………………………………………….5 V. Options to improve operations……………………………………………………………………………………………………….6 I. Introduction The debate on whether all healthcare institution should be non-profit rises many issues and they have been heavily debated. The best way to examine this to analyze if non-profit hospitals are in fact better that for profit hospitals and whether there is enough evidence data to support policies dictating ownership. Hospitals in the United States are the largest health care organization in this country. Private hospitals may either be classified as non-profit or for-profit institutions. The majority of the hospitals within the United States are non-profit. The main difference between non-profit and for-profit hospitals is the regulatory rules. Non-profit hospitals are not required to pay property, sales, or income tax. The reason that non-profit hospitals and other organizations were established was with the intention of servicing the needs of the poor. This is the reason that not-for-profit health care and hospitals are exempt from taxes, it was due to the...
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... University of Phoenix HCS/577 Charlotte Igo July 30, 2012 The Health care financial environment is the most common for- profit, not-for-profit, and also the government funding. In this paper, it will be identified that one entity of these health care financial environments. Also it will describe the financial structure of the financial environment. Along with identifying the policies unique to each of the financial environment, and also to identify the financial management practices prevalent in the financial environment. Then it will be explained why the effective financial management is more difficult in health care than in other industries. First we will talk about is the Health Management Associates, Inc. that was founded in 1977. The Health Management Associates was founded to own, also leased and then managed the hospitals throughout the United States. As of the HMA, they operate about fifty nine hospitals in fifteen states with approximately eighty eight hundred licensed beds. Company employs around thirty two thousands associates and hosts a total medical staff of approximately eight thousands physicians. HMA is a for profit organization, with that the profit organization is with the three key features of investor-owned corporations. The owners aka known as the stockholders of the business are well defined and they exercise control of the firm by voting for directors. ...
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... Tradeoff Theory in For-Profit Firms. According to the static tradeoff theory of capital structure, what are the main pros and cons associated with debt financing? Based on this, when would you recommend that a firm take on a large amount of leverage? (In other words, what kind of firm characteristics are more conducive to high leverage?) When would you recommend low leverage? The main pros of debt financing are Tax shield – debt payments are a tax deductible expense The main disadvantage of debt is that it is risky. There is a risk of bankruptcy and bankruptcy can be filled with expensive costs and fees. Small or high growth firms should not use as much leverage but rather should finance more through equity. These high growth firms may not be able to get debt or debt will come at a higher price because of the risk inherent in the high growth and the lack of collateral. However, some small firms may see their opportunity as so great that they may want to hold their equity so they do not have to share profits with stockholders. Large firms and firms that will have low or no growth and have unutilized debt capacity should finance through debt and use little or no equity. If firms with little growth issue equity, it could signal to the market that the stock is overpriced and the future does not look so bright. Additionally, firms that are large will have smaller costs of debt than smaller firms For-Profit vs. Non-Profit Hospitals. What are some pros and cons...
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...ASSIGNMENT: 3 ORGANIZATION OF A HEALTH CARE FACILITY HEALTH CARE POLICY LAW AND ETHICS AUGUST 10TH. 2013 Your reputation as a renowned administrator to successfully lead mergers and acquisitions of hospitals precedes you, and you have been hired to create and open a new specialty health care business. This is a clinic with physicians who specialize in the following areas: dermatology, gynecology, heart disease, respiratory disease, surgery, and gastroenterology. It is located in an exclusive neighborhood. 1. Determine whether you would incorporate and state the advantages and disadvantages of doing so. The first order of business is to analyze the demographics of the neighborhood and its residents. Incorporating so many specialties in an exclusive neighborhood can bring about several challenges such as an influx of a variety of individuals from all walks of life. In addition, there could be a traffic nightmare with having so many specialties in a neighborhood such as women with children, old and young adults. The advantages of incorporating multiple specialties in a new clinic would be financially rewarding for the owners. The reason for the financial rewards would be that if one specialty does not do well, then the other would offset any deficits incurred. Another advantage of group practice from the perspective of the provider include shared operation of the practice, joint ownership of facilities and equipment, centralized administrative...
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...The U.S. Healthcare System Non-Profit Versus For-Profit The U. S. healthcare system is generally made up of two classifications. Hospitals may either be classified as non-profit or for-profit institutions. The majority of the hospitals within the United States are considered non-profit. The definition of a non-profit hospital is that its purpose is to serve the healthcare needs of the community. The reason that non-profit hospitals and other organizations were established was with the intention of servicing the needs of all communities. Over time there missions and values changed to have a primary focus on the indigent population. Most are/were well rooted in religion or were created by religious sponsors while others were formed by the humanitarians, nurses, and doctors. One of the distinct differences between non-profit and for-profit hospitals is the rules and regulations, particularly tax status. Non-profit hospitals are not required to pay property, sales, or income tax. It has been suggested that due to the fact the organizations were providing specific social services to the community, they were to be exempt from paying certain taxes. As of April 2012, non-profit hospitals had to begin to abide by four new mandates: * Community Health Needs Assessment * Must have written financial assistance and emergency medical care policy and procedures * Necessary medical care and emergency services must be at the minimum charge/cost. * Be in compliance...
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...CJ Macintosh March 21, 2011 Shriners Hospital Healthcare Delivery System Imagine a child experiences a traumatic event such as a house fire sustaining life-threatening injuries or develops a musculoskeletal disorder and may not walk again. Where would one go with a child such as this? A child that would need an individualized care plan catered to meet his or her needs without financially crippling their family and incorporating them in the healing process. A place of such magnitude and offers multidisciplinary services does exist and that place is Shriners Hospital for Children. Shriners Hospital, founded in 1922, aims to achieve optimum health for its patients by helping each child become healthy and independent. Through its broad range of medical and rehabilitative services, it accomplishes this goal through treatments, surgeries, and therapies in orthotics, prosthetics, occupational, and recreational. To deliver exceptional care, its healthcare delivery structure and the many factors that affect it contributes to its weaknesses and strengths as a non-profit healthcare provider. The following addresses Shriners Hospital healthcare delivery system, the economic, licensing, and regulating factors, trends affecting the industry, and pricing dynamics it encounters. Health Care Delivery Structure Health care delivery structure is the system through which a healthcare organization provides health care services that met the heath needs of the targeted population...
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...between the for-profit, not-for-profit, and government financial environments can be substantial because for-profit, not-for-profit, and governmental entities use different financial structure, policies, and unique management practices. According to Gapenski (2008), hospitals are classified by ownership as private not-for-profit, investor owned, and governmental. The statistical data show approximately 60 percents of all hospitals are private not-for-profit hospitals, approximately 25 percents consisted of governmental hospitals, and approximately 15 percents are investor owned hospitals. Main difference between not-for-profit and for-profit hospitals are not-for-profit hospitals received numerous tax benefits such as tax exemption from federal, state, and local government income taxes because hospital serves as a charitable purpose and provide benefits to the community in general. The hospital sector in the United States includes three different types of ownership forms. Not-for-profit hospitals are the most common type but for-profit and government hospitals also play substantial roles. Arnold Palmer Hospital for Children is not-for-profit hospital dedicated to the providing a shelter of hope and healing to the children. According to Orlando Health (2011), “Arnold Palmer Hospital is a 158-bed pediatric hospital located in Orlando, Florida.” Orlando Health is dedicated to offering community services by providing high quality health care. Arnold Palmer Hospital for Children...
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...Veteran Affairs Compared to for-Profit Medical health care and Organizations Veteran Affairs versus For-Profit Medical health care and Organizations In assessing you will in regards to not for profit versus for-profit healthcare and companies I found an interesting article from the Congressional Budget Office [CBO] (2006), which smashes down the possession types of medical centers nationwide. Depending on 4,518 group medical centers, 58 % are Veteran Affairs, 18 % are for revenue, and the staying 24 % are government owned medical centers. Veteran Affairs medical centers were established for Veteran Affairs requirements and tend to be larger, and are more likely to be training medical centers. They also are responsible and responsible to the areas they offer. They are controlled by commanders of the areas they offer. Earnings obtained from the Veteran Affairs medical centers are reinvested to improve quality and health care provided at the medical centers, and also spent in group programs, such as offering no fee or reduced fees to the without insurance and low income for medical health care services. Veteran Affairs healthcare companies objective is to offer areas by offering healthcare without respect for a individual's ability to pay. For-profit medical centers are lawfully responsible to their entrepreneurs and stockholders and performance is centered...
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...Deborah Bennett 01/22/2013 HCA 240 Instructor Moiz Lalani Electronic Medical Records from a Business Perspective In this paper we shall analyze how Electronic Medical Records (EMR) impacts health care organizations from a business perspective, as well as how it may impact profit organizations (versus non-profit organizations) differently. In addition we shall discuss perspectives and responsibilities of the financial management staff, and the basic rules and regulations involved with EMR in which the health care financial management of the organization must address. Starting around 1991 the Institute of Medicine (IOM), known to be the leading innovators concerning medical advances, started encouraging those in the health care delivery system to see the future and accept it, by beginning preparation for instituting electronic medical records. Expounding on the many advantages EMRs would allow facilities and physicians alike; such as, providing for more efficiency, through instant access of a patient’s health history (including all labs, tests and meds prescribed by all doctors for the patient) that is stored on the computer and can be accessed throughout the country, and eventually the world. In turn this would also provide for more effective and less redundant care, and with certain software installed for guiding diagnosis and medicine interactions, could also promote error free treatment and care, avoiding life-threatening episodes in this regard (Haupt, 2011)...
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...specialists for their time on call to many specialists choosing to be exclusively office-based and not participating in emergency room call at all. Differences in Organizations In a situation such as specialist shortages, for-profit and not-for-profit organizations in the general hospital setting do not have many differences. A large scale not-for-profit healthcare system may have the funds to pay stipends to specialists to take call at their facilities. A small stand-alone for-profit hospital may not have the funds to pay such stipends. “…study cites financial and legal disincentives that might make specialists reluctant to stay on-call. These include lack of payment due to the high number of uninsured patients using emergency departments and legal liabilities that lead to high insurance premiums for specialists,” (Robert Wood Johnson Foundation, 2011). The study above proves that the issues relating to the shortages are not a for-profit or not-for-profit issue but physician specific issues. How an organization chooses to deal with this physician issue is ultimately based on their financial picture and if they have the funds to offer a stipend or negotiate contracts with the specialists. For those facilities (for-profit or not-for-profit) that cannot afford to pay stipends to their specialists to take call or negotiate a contract and do not have 24/7 specialist coverage, the...
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...The financial structures of health care entities non-profit, for-profit and government are different with funding, ownership, and type of services rendered. Financial managers, financial markets, and investors are the essential components that make up the financial world within a healthcare organization. Financial managers basically rely on investors to supply money through the financial markets when determining whether to use debt or use equity financing. To understand the full benefit of the financial resources, it is important to understand the overall financial structure. In other words how it is set up. In this paper, I will try to compare the financial environment of for-profit Pruitt Health Clinic, not-for-profit Phoebe Memorial Hospital, and VA Clinics. (to the best of my ability) In the health care sector entities regardless of their status (for-profit, not-for-profit, or government owned) should have the same common goal of providing quality healthcare to the residents of its community. Health care organizations are very different compared to other business when it comes to finances. The financial structure is described as the way funds are financed and the balance sheet shows what the organization looks like at a particular point in time. For example Phoebe Putney Memorial Hospital will compare fiscal year to another fiscal year to decide what needs to stay, go or be “tweaked”. Some organizations have a method to reading the spread sheet as well. PPMH for...
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...Simulation Review Craig W. Pasanen HSC/405 April 16, 2013 Todd Brown Phase 1: Capital Shortage Elijah Heart Center (EHC) is a 140 bed facility that specializes in cardiac care, located in New York. It has fallen on hard times even though patient volume and profits are increasing quickly, however the profit margin is falling. The Chief Executive Office of ECH would like to reduce cost by $900,000 in one year. The author of this paper would recommend a few possible way of making this happen. The first step taken was to reduce agency staff personnel. Staffing agencies were created to provide health-care providers with talented health-care professionals to fill their demanding and challenging openings ("White Coat Medical Staffing", 2013). The main reason this was chosen was due to salary. Agency worker’s salaries are often twice that of a regular staff member. This move alone saved ECH over 2.4 million dollars in salaries and benefit for the agency workers. The second cost cutting step was to changing the skill mix; this was achieved by hiring nursing assistants at an average salary of $26,609 a year versus a registered nurse who makes $69,123 ("Salary.com", 2013). This resulted in an overall saving of 1.4 million dollars. So just by adjusting the staff ECH was able to save roughly 3.8 million dollars. In order to fund the changes it was decided that a loan needed to be secured. Loan options were presented and the decision was made to pick...
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...2-1 CHAPTER 2 Healthcare Business Basics Concept of a business Legal forms of business For-profit versus not-for-profit ownership Organizational goals Financial goals Taxes 2-2 Concept of a Business A business is an entity that raises money in the capital markets, invests these funds in assets (land, buildings, equipment, inventories, and so on), uses these assets to create products or services, and sells these products or services to sustain itself. A pure charity is different. Why? 2-3 Legal Forms of Business There are four major categories of business organization (legal forms of business): Proprietorship (sole proprietorship) Partnership Corporation Hybrid forms How much does the organizational form influence the practice of healthcare finance? 2-4 Proprietorships and Partnerships Advantages: Ease of formation Subject to few regulations No corporate income taxes Disadvantages: Limited life Difficult to transfer ownership Unlimited liability Difficult to raise capital 2-5 Corporation Advantages: Unlimited life Easy transfer of ownership Limited liability Ease of raising capital Disadvantages: Cost of formation and reporting Double (or triple) taxation for investor-owned corporations 2-6 Hybrid Forms of Organization Limited partnership (LP) General partners have control Limited partners are liable only for their initial contribution Not commonly used by healthcare providers Limited...
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