Nonprofit Vs. Non-Profit Entities In Healthcare Organizations

In He and Mellor’s article, cuts in the Medicare payments would increase the amount of care provided to the uninsured by for-profit hospitals (He and Mellor, 2016). In the article, “How Much Do Hospitals Cost Shift?” Frakt explains that nonprofit and for-profit hospitals are in competition with each other. Nonprofit hospitals encourage for-profit hospitals to enhance trustworthiness and quality. For-profit hospitals persuade nonprofit hospitals to cut costs and become more efficient (Frakt,

7. Community Health Needs Assessment. The IRS requires non-profit hospitals conduct a Community Health Needs Assessment every three years and then adopt and implement a plan to meet the community's health. The development of a free clinic requires such a study and "clearly demonstrates that the hospital taken action on the results," says Mr. Greeley.

According to Daft the main difference is that for-profit organizations’ bottom line is to earn money, while non-profit will focus on social impact (p.13). Therefore, the key stakeholders’ expectations would be within the increase profit and market position of their organization. In contrast, regarding the non-profit organization the expectations are parallel to diversity of the stakeholders. For instance in the case of the Salvation Army, the volunteers, customers, donors, and government agencies, will have different expectations of the organization, while the leadership would balance those expectations to achieve the non-profit goals.

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.

Nonprofit hospitals have become a common characteristic of the hospital sector because they can be found across the country because of their presence in almost every corner, they never decline to provide treatment, and offer several community-based health programs. On the contrary, the for-profit health facilities are regarded as the corporate model of health care services as they seek to make profit first. They enjoy huge capital that enables them to develop state-of-the-art facilities and purchase the latest clinical technologies.

The role of finance in Health Care Systems, Inc. as a regional not-for-profit hospital relates to both the accounting and financial management aspects of the business. Facets of both accounting and financial management are intertwined with maximizing productivity by way of managing and analyzing financial operations to ensure resources are being utilized properly (Gapensiki, 2013). The divulgence of financial reports to managers and investors will aid in the development of plans and budgets for future growth, assess acceptable levels of financial risk, manage contracts appropriately and make decisions related to capital investments allowing the organization to expand service offerings thereby demonstrating greater value in the community. Operating as a not-for-profit entity requires that the hospital operate exclusively in the interest of the public for a charitable purpose. Through understanding who the primary third party payers

The debate over non-profit versus for-profit healthcare organization has been ongoing, does one provide better care than the other? Do the operations of for profit perform better than the non-profit organizations? Are the criticisms about for-profit organization validated and is there proof? The goal is to examine those questions as well as offer options to improve the financial and operational performance of non-profit and for-profit organizations criticisms.

Next, we studied the financial structures of health care organizations. Specifically, we examined the structure of nonprofit healthcare organizations. I remember spending a good amount of time debating whether or not nonprofits should maintain their tax exempt status. As someone who had spent their entire professional career working for a nonprofit organization, I often viewed myself as the sole champion for these organizations. In sessions and on the discussion boards, I advocated that nonprofit healthcare organizations in most situation function as a safe net of the community and that the level of community benefits these organizations provide do justify the lost revenue for state and federal agencies.

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

http://www.cnn.com/US/9907/13/patients.rights/index.html Zelman, W. N., McCue, M. J., Glick, N. D., & Thomas, M. S. (2014). Financial management of

Stakeholders play a critical role in the management and decision-making process of an organization. An example of a stakeholder includes employees, managers, patients, vendors, suppliers, the community, creditors, customers and the government (Daft, 2013). Also, Daft (2013) says, “Stakeholders are groups “within or outside of the organization that has a stake in the organization’s performance” (p. 23). There are a few differences surrounding stakeholder expectations between non-profit and for-profit organizations. The differences in nonprofit organizations and for-profit business organizations are the direction of activities for the end goal (Daft, 2013). Although it is very difficult to measure the impact that a nonprofit has on society, community, or a particular group as opposed to evaluating an income statement from a for-pro-profit organization. The same level of attention should be paid to stakeholder for nonprofit organizations as stakeholders of for-profit organizations.

Paradise Hospital, Inc. is a for-profit hospital. As the facility’s new hospital administrator, you have been tasked with improving the service value of the hospital. The administration has not done this process since the hospital began operating in the year 1995. The investors are not familiar with the value proposition strategies of hospitals in the current day America.

Though they are not entirely comprehensive tools, a great deal can be learned about a hospital or other healthcare organization for-profit or not-for-profit from an examination of their annual financial documents (Finkler & Ward, 2006). The balance sheet and statement of revenue and expense can both yield valuable clues even in the absence of other evidence about changes that might be occurring in the organization, a definition of the type and degree of certain problems that it might be facing, and potential opportunities for improvement in performance that might exist (Finkler & Ward, 2006). Comparing two or more years' worth of financial information yields even more valuable insights, tracking movement in the hospital or other organization's ability to finance its activities and thus continue providing services at the same level, quantity, and scope as current operation.

“Hospitals can be non-profit, for-profit, and government-owned and/or operated” (Baker & Baker, 2006). There are different terms for each classification in how to report and handle the finances but the basics are the same for any type of business. Business finances require the following basic fundamentals: creating “budgets, understanding capital expenditure, loan acquisition, and financial fees” (Baker & Baker, 2006). Government owned and operated hospitals offer unprofitable services; which

The hospital industry consist of privately and publicly owned and operated hospitals and medical facilities. The financial backgrounds of these assorted categories of organizations are sizeable and contrasted. Therefore, industry ratios are to be considered and evaluated from a greater proportion in order to identify with the financial data involving the industry as a whole (Dunn & Becker, 2013). Based on analysis and evaluation of the financial ratios gained from Nasdaq and Google Finance, it is apparent that the hospital industry is gradually rising and supports increase in profitability. These ratios are divided into several categories: Growth rates, financial strength, valuation, profitability, efficiency, dividends, and management effectiveness.