Not Profit Driven Hospitals Spare More Than $ 24 Billion

The report provides a good data compilation, but provides little insight into the meaning of the data. Although the report provides little analysis, tax-exempt hospitals have provided significant amounts of financial assistance and other community benefits. [What remains to be seen, however, is whether insurance expansions under the ACA thereby decreasing pool of uninsured patients will cause these numbers to decrease in the future. Tax-exempt hospitals could further struggle to justify tax-exempt status.]

In 2012, the ACA found an excessive amount of readmissions of patients that were hospitalized within 30 days for the same medical conditions. This factor viewed under the ACA as a quality issue and CMS implemented value-based incentive payments based on performance in a set of quality measures. The plan is to implement a pay for performance (P4P) in formulas used by Medicare to reimbursement providers. “The objective is to link reimbursement to quality and efficiency as an incentive to improve the quality of health care, as well as reduce system-wide costs” (Shi and Singh, 2015). In addition to the P4P, nonprofit hospitals also focus on continual improvement, data and cost containment throughout the organization (Adamopoulos,

Hospitals should be encouraged to participate because improving hospital care is likely to be essential to success (McClellan et al, 2010). Accountable care organizations can be implemented through different payment models. These could include opportunities to share in demonstrated savings within a fee-for-service environment, in which providers took on no new financial risk. They could also include limited or substantial capitation arrangements, in which payments were unrelated to the volume of services provided, to the intensity of service use, or to the frequency of face-to-face meetings, and in which providers took on some financial risk for poor-quality results or failure to control costs (McClellan et al,

According to the American Hospital Association the cost of equipment, services, and information services has risen drastically. A huge problem for hospitals now is that there has been an enormous increase in patients who have Medicare or Medicaid. The Hospital Association states that “60% of all admissions. Neither program fully reimburses the cost of hospital care.” Not only is the hospital not getting paid the full amount through the health insurance, but they have also seen a jump in people who do not have insurance and cannot pay for their hospital expenses this averages out to about six percent of hospital expenses. Hospitals must assume these costs as a part of their charity pay. These costs are then calculated and increase the costs of health care for people who pay for it, in order to cover these costs.

As discussed previously, the Affordable Care Act of 2010 passed by the legislation, drastically changed the entire healthcare economy. In fact, ever since the ACA was passed it was required by law for hospitals to increase the amount of attention given to the individuals of the community in order to meet their needs. Also, the ACA allowed close to 10 million individuals to have health insurance through Medicaid and private health insurances, which has a high impact on all the hospitals, such as Yale New Haven. For example, since millions of Americans can now afford health insurance, there is a large influx of patients who can go to hospitals and are able to afford the overall cost. The non-profit hospital of Yale New Haven is benefiting in

“The U.S. spends nearly twice as much money per capita on health care as other developed nations, yet the metrics show that Americans end up with worse care and poorer health.” (Hill) The rising cost of healthcare has pushed some non-profits to become for-profit organizations.

A study done in 2001 found that diseases like obesity and heart disease were higher among patients in public hospitals than in for-profit hospital (Huang 2). This shows that private facilities are often better than public hospitals and emphasizes the idea that the best health care is for those who pay the most money for it. Additionally, private hospitals have a greater and often faster access to the current medical technology giving their patients the best treatment currently possible (Collins 8). On another note private hospitals are operated in more of a business like manner and therefore do not accept everyone if they feel like they cannot pay (Huang 1). As a result for profit hospitals receive more financial gain and are able to attract finer doctors because of the salaries offered. It was hoped that private hospitals and public hospital would be equal institutions but because private hospitals have a greater access to money and resources they are usually better than public hospitals.

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

Financing health services in the United States is very important and involves an excessive amount of health institutions and activities. Health services are supported by several methods to create revenue that most hospital, clinics, and treatment centers use for daily operational costs (World Health Organization, 2006). These methods are: general taxation of the state, county, or township/municipality, Medicare or Medicaid or other socialized health insurance plans, voluntary and private health insurance and lastly, donations to health charities accepted from non-profit organizations, donations

MD Anderson had operating profits of $531 million in FY 2010. This represented a profit margin of 26% on revenues of $2.05 billion. Stamford hospital is midsized nonprofit hospital located in Stamford, CT. It has revenues of nearly half a billion dollars. In fact, its revenues exceeded all money paid to the city of Stamford in taxes and fees. The hospital is a bigger business than its host city. Although the true cost of healthcare is difficult to calculate, many other hospitals throughout the United States are generating record profits and revenues. These profits and revenues are under heavy criticism because non-profit hospitals often outperform their for-profit counterparts. Many believe that unfair medical billing practices and skyrocketing prices contribute to these record profits at the expense of economically strapped patients. Non-profit entities enjoy tax-free status on the profits they generate. These profits are used by hospitals to expand their practices and buy out competitor hospitals, laboratories and other medically related cash generating businesses. Anti-trust laws must be enforced effectively to prevent these non-profit hospital systems from becoming monopolies within a geographic area and preventing healthy competition.

Apart from the Affordable Care Act, there has been increased government and court involvement in the determination of how healthcare issues are run, like the recent denial of the nonprofit tax exemption status to some hospitals in Chicago (Bergen 2). These hospitals, which include the Northwestern Memorial Hospital and the Prentice Women’s Hospital, are known to provide important healthcare services to patients who cannot afford to pay the expensive costs in private hospitals (Bergen 2). These unfavorable healthcare policies among others are bound to be more frequent and the resultant problems may promote the emergence of other bigger ones unless immediate action is taken.

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.

Governmental agencies such as JCAHO monitor the care of the patients from a nursing perspective. Quality of care affects the amount of reimbursement for care given to the hospital (Baernholdt, Jennings, Merwin, & Thornlow, 2010). The neighboring community often times depends on the hospital to meet their needs. The amount of people in a certain location may influence when and where the hospital is built. Competition from other nearby hospitals may be another consideration that influences types of care given in the hospital. External forces can add to the strength of the hospital by providing support and monetary compensation. A hospital, however can be weakened when certain rules are not followed, and the hospital receives a fine.

Hospitals and health systems in the U.S. are experiencing a remarkable transformation in their business models directed from numerous influences that are projected to ultimately turn the industry around. Pressures include providers troubled with the quantity of services they are responsible for, to providers who concentrate on presenting high-cost services that give emphasis to sustaining healthy populations (Dunn & Becker, 2013).