...History Generosity is a quality, the desire to give to others without being asked. Before even the enactment of any legislation, philanthropists helped to shape the way we organize to support the less fortunate. The history of charitable organizations in the United States originated almost at the same time as the formation of our new nation. Benjamin Franklin, was one the founders of our nations and the earliest American philanthropists. He founded the University of Pennsylvania to educate youth. The early setters formed charitable and voluntary associations to help with issues of the era like education, orphanages, and illness (Arnsberger, Ludlum, Riley & Stanton, 2008 p. 1). Young Americans were able to form charitable organizations to fill gaps in the social welfare programs. Back then, charities were mainly hospitals and orphanages support by religious groups and wealthy individuals. During the 19th century, these organizations were controlled and founded by private corporations or a person (Arnsberger, Ludlum, Riley & Stanton, 2008 p. 2). The bloom of the American industry gave birth to bigger corporations; at the same time, the increase of more formal charitable organizations. It wasn’t until the late 19th century that government began paying more attention to this new sector. The first legislation the government imposed was in1894, the Tariff Act that established a flat two percent tax to corporate income, but excluded charities. However, the Tariff Act was declared...
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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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...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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...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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...Empire Blue Cross Blue Shield: Non-profit to profit status INTRODUCTION Empire Blue Cross and Blue Shield was one of the most popular and respected insurers of last resort in the United States of America. The fact that this insurance organization was a non-profit company enabled it to offer highly subsidized health insurance covers to the New York population; this greatly benefited low income earners who could not afford to pay the hefty insurance premiums charged by other for-profit organizations in New York. However, on 26th September 1996, Empire Blue Cross and Blue Shield made an official announcement that it was planning to convert from a non-profit organization to a fully-fledged for-profit company. This meant that the huge number of New Yorkers who had obtained individual health insurance cover from Empire Blue Cross and Blue Shield would have to seek alternatives which would more or less expose them to greater health risks. (Robinson, 2003) The only subscribers who wouldn’t be affected by Empire Blue Cross and Blue Shield conversion were the 850 policy holders who had permanent disability. This marked the start of an extensive legal, community and political tussle pitting the various stakeholders who had different kinds of interests in Empire Blue Cross and Blue Shield. Experts argued that this conversion plan was a reflection...
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...organization and a for-profit health care organization of your choosing. Answer the following: Summarize the types of services provided, clientele served, and provider groups involved. Compare and contrast the strengths and weaknesses of each organization from patient, provider, administrator, and third-party payer perspectives. Provide at least 2 suggestions for each organization to minimize the identified weaknesses. Summarize which organization you would rather be part of, using rationale. Abstract There are many differences that for-profit and not-for-profit organizations have between one another. Research has been conducted on one not-for-profit organization (VA hospital) in a for-profit organization (Baptist Medical Center) and the strengths and weaknesses from a provider’s and patient’s perspective in which organization would be a better choice to be part of. Not-for-profit hospitals are recognized for their charitable intentions. Not-for-profit hospitals have a habit of being larger and also have a tendency to be training hospitals. The earnings that not-for-profit hospitals receive are reinvested to enhance the quality care that is offered at these hospitals. Their earnings are also invested into community programs, which in turn can provide little to no fee to those individuals who are considered to be low income families and also maybe uninsured for the services of these programs. The purpose of not-for-profit hospitals is to assist healthcare...
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...A Community Leader’s Guide to Hospital Finance E VA L U AT I N G H O W A H O S P I TA L G E T S A N D S P E N D S I T S M O N E Y Prepared for The Access Project by Sarah Gunther Lane, MS Elizabeth Longstreth, BA Victoria Nixon, MS Under the supervision of Nancy Kane, DBA Harvard School of Public Health The Access Project is a national healthcare initiative supported by The Robert Wood Johnson Foundation and the Annie E. Casey Foundation. It works in partnership with Brandeis University’s Heller Graduate School and the Collaborative for Community Health Development. It began its efforts in early 1998. The mission of The Access Project is to improve the health of our nation by assisting local communities in developing and sustaining efforts that improve health care and promote universal coverage, with a focus on people who are without insurance. If you have any questions or would like to learn more about our work, please contact us. The Access Project 30 Winter Street, Suite 930 Boston, MA 02108 Phone: 617-654-9911 FAX: 617-654-9922 E-mail: info@accessproject.org Web site: www.accessproject.org Catherine M. Dunham, Ed.D, National Program Director Mark Rukavina, MBA, Deputy Director for Programs and Policy Gwen Pritchard, MPA, Deputy Director for Communication and Administration © 2001 by The Access Project This publication may be reproduced or quoted with appropriate credit. Acknowledgments The Access Project would like to thank and...
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...James Wiley & Sons, Inc., Hoboken, NJ, USA, 2008 Table of Contents Executive Summary/Abstract 4 Author’s purpose for writing this book 5 Main themes of the book 6 Principal supporting arguments for each theme 6 Evaluation 11 Conclusion 13 Final comments 14 References 15 Executive Summary The purpose of this book is to shed light on the Health Care crisis and what the key components are that has the U.S. in this situation. Rooney and Perrin explain how the lack of laws capping medical prices creates a domino effect that causes insurance premiums to rise and cause the consumers to pay more. They go on to explain how charitable and non-profit organizations abide by an unwritten rule and that is to avoid the uninsured at all costs. And if they do provide medical service to that individual they will charge them 3-4 times the regular price ironically making the uninsured they’re most profitable client. Rooney and Perrin provide qualitative solutions for specific problems that are contributing to this overall health-care crisis. They introduce a reformed Health Care Savings Account (HSA) in combination with their own plan known as Fair Care a plan that would cover all Americans. The authors demonstrate the financing mechanism for this plan to work without any new taxes coming into play. In essence the plan would be funded by using money that is already...
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...Abstract This paper examines how nonprofit organizations respond to incentives to manage their publicly available financial information. Prior research identifies two operating ratios donors commonly use to evaluate the efficiency and effectiveness of nonprofits (i.e., the program service ratio, defined as the fraction of total expenses committed to advancing the charitable mission of the organization, and the fundraising ratio, defined as the ratio of fundraising expenses to donations revenue). Nonprofit managers have an incentive to over-report the expenses classified as program services and under-report the expenses classified as administrative and fundraising in order to improve these ratios. We examine whether nonprofits respond to these incentives, and we find evidence consistent with opportunistic cost shifting to improve the program service and fundraising ratios. Additional analysis finds that smaller nonprofits that are more reliant on donations revenue manipulate their operating ratios to a greater extent. JEL classification: M4; L3 Key words: Nonprofit organizations, earnings management, disclosure, hospitals. ______________________________________________________________________________ *Corresponding author. Tel.: (319) 335-0841; fax (319) ; email: robert_yetman@uiowa.edu 1 We thank Ashiq Ali, Ramji Balakrishnan, Leslie Eldenburg, Lil Mills, Shiva Sivaramakrishnan, and workshop participants at the University of Arizona and Texas A&M University for their helpful...
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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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...Profit Versus Not-for-Profit Hospitals In Partial Fulfillment of the Requirements for Health Services Systems HSM 541 Blaise X. Schmidt DeVry University Keller Graduate School of Management September 2012 1.0 Purpose The purpose of this paper is to conduct a comparative analysis between for-profit hospitals and not-for-profit hospital. It will discuss the characteristics of each as well as factors affecting the operations of both systems. Additionally, it discusses potential areas of improvement and some of the challenges associated with each relative to finance and operations. 2.0 Comparing Not-for-Profit and For-Profit Hospitals Not-for-profit hospitals are organized under the Section 501 (c)(3) of the Internal Revenue Service (IRS) tax code, and as such, are exempt from federal and state taxes and generally from local property and other taxes. Not-for-profit hospitals also have access to tax-exempt bond financing and have tax-deductible status for gifts and contributions (Barton, 2010). For-profit hospitals do not have this luxury. Public or private hospitals can be classified as non-profit. Non-profits include a majority of the hospitals in the US. The two types of hospitals differ mainly in regulatory rules. Not-for-profit hospitals do not need to pay property, sales, or income taxes. For-profit hospitals do. Despite these differences, the two types of ownerships have been becoming more and more similar and many hospitals...
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...are for-profit, not-for-profit, and government owned. In the following paragraphs, I will identify one entity from each of the three categories of ownership and describe the financial structure in their financial environment. I will identify the policies unique to each financial environment as well as financial management practices prevalent in the financial environment. I will also explain why effective financial management is more difficult in health care than in other industries. Entities Piedmont Medical Center is a for-profit acute care hospital located in Rock Hill, South Carolina. It is an entity with the Tenet Healthcare Corporation that offers a broad range of surgical and diagnostic services that include advanced heart and stroke care, women and children services, and a 24-hour emergency room. It has received recognition for its cardiac care, cancer care, diabetes management, orthopedic care, stroke care, and surgical care. (Piedmont Medical Center, 2014). Greenville Memorial Hospital is a not-for-profit acute care hospital also located in Greenville, South Carolina. It is an academic teaching hospital with a 24-hour emergency room that provides inpatient and outpatient services for the immediate community as well as a referral center for the diagnosis and treatment of heart, cancer, reproductive, and endocrine disorders. It has a children’s hospital, a heart institute, and a cancer treatment center connected to the main building (Greenville Memorial Hospital, 2014)...
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...Hospitals have always been a big part of communities around the world. The constant changes in environment, society, and people’s beliefes have led to different roles of hospitals. Although this is a very broad topic, this paper aims to briefly discuss the role of hospitals in the past, present, and future time. In ancient cultures, hospitals were not healthcare institutes as we know them today. The earliest documented institutes provided cure to sick people in temples. Sick people would go to house of worships to get cure for their disease. Furthermore, religious leaders also acted as healthcare providers (Wolper, 2010). As time progressed, hospital became a separate institute, but they were still controlled by religious leaders. These hospitals were viewed as a place for severely ill, house of poor, and place for pilgrims (Wolper, 2010). As structure of hospital started to develop further, in the medieval Islamic world, hospitals became a place were ill people were welcomed and cared for with qualified staff. During the modern era as science started to develop and scientist became more familiar with the human anatomy and physiology, modern hospitals started to appear in Europe. These hospitals were staffed with physicians and surgeons and served only people with medical needs (Wolper, 2010). Moving forward, current hospitals are technological advanced buildings that are staffed with well educated nurses, physicians, and surgeons. Although there are many hospitals that are...
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...I. What is a Non-Profit Organization? A. The basic definition of a non-profit organization is not established for the purpose of making a profit; not entered into for money: a non-profit organization (dictionary.com). In a society where everything costs, how can it be that an organization can exist that is not established for the purpose of making a profit? What is their purpose? By answering these questions, one will gain an understanding of what a non-profit organization is as well as the history of how non-profit organizations came into existence. B. Digging a little deeper, the premise of a non-profit organization is that a non-profit organization is an organization which exists for educational and charitable reasons, and from which its shareholders or trustees do not benefit financially from. Any money earned must be retained by the organization, and used for its own expenses, operations, and programs. Many non-profit organizations also seek tax exempt status, and may also be exempt from local taxes including sales taxes or property taxes. (investorwords.com). Bottom line, their purpose of existence is for the greater good of the community by the services they offer. A few well-known non-profit organizations are Kaiser Permanente, Easter Seals, Habitat for Humanity, the Red Cross, and United Way. Although many of the aforementioned organizations have a different look and feel, they all share the same unique key characteristics of a non-profit organization. C. Some of...
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...NONPROFIT, FOR-PROFIT, AND GOVERNMENT HOSPITALS Uncompensated Care and Other Community Benefits Statement of David M. Walker Comptroller General of the United States GAO-05-743T May 26, 2005 Highlights Highlights of GAO-05-743T, a testimony before the Committee on Ways and Means, House of Representatives Accountability Integrity Reliability NONPROFIT, FOR-PROFIT, AND GOVERNMENT HOSPITALS Uncompensated Care and Other Community Benefits Why GAO Did This Study Before 1969, IRS required hospitals to provide charity care to qualify for tax-exempt status. Since then, however, IRS has not specifically required such care, as long as the hospital provides benefits to the community in other ways. Seeking a better understanding of the benefits provided by nonprofit hospitals, this Committee requested that GAO examine whether nonprofit hospitals provide levels of uncompensated care and other community benefits that are different from other hospitals. This statement focuses on, by ownership group, hospitals’ (1) provision of uncompensated care, which consists of charity care and bad debt, and (2) reporting of other community benefits. The hospital ownership groups were (nonfederal) government, nonprofit, and for-profit. To compare the three hospital ownership groups, GAO obtained 2003 data from five geographically diverse states with substantial representation of the three ownership groups in each state. GAO analyzed cost data from two perspectives—each hospital group’s percentage...
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