Study Document
Healthcare Management Explaining the Differences Capstone Project
Pages:3 (842 words)
Sources:3
Subject:Health
Topic:Healthcare Management
Document Type:Capstone Project
Document:#77920733
A not-for-profit hospital must also provide an assessment of how they are continually upgrading their training and services departments, and show through financial analysis and reporting how the funds set aside for these areas is actually used as well (Greaney, 2006). Not only is the auditing and compliance requirements significantly different between for-profit and not-for-profit hospitals, the visibility and reporting into key technology investments to benefit a hospitals' performance is also reported as well. Of all areas of difference however the most significant is in the area of how each charges for services from a market and competitive valuation standpoint (Zaleski, Esposto, 2007). This area of pricing is what separates for-profits in terms of their ability to quickly raise prices if needed, in addition to changing pricing strategies quickly. This often results in for-profit hospitals having a very expensive financial operations and financial reporting function, with specialists on the hospital accounting and finance department payrolls who specialize in taxes, compliance to section 501(c)(3) and in the case of larger for-profit financial intuitions, tax attorneys (Zaleski, Esposto, 2007). For the non-profits the same level of compliance and reporting is necessary from an income and salary reporting level to maintain section 501(c)(3) and Form 990 status with the IRS (Carlson, 2010). Non-profits must also be in compliance to section 4958 in the event they pay excess salaries or compensation relative to industry benchmarks and the audit-based levels the IRS has determined through continual evaluation of section 501(c)(3) corporations.
Challenges Not-for-Profit Hospitals Face
The most significant challenge not-for-profit hospitals face is the rapidly escalating cost of medical care, including suppliers, salaries and medicines, followed by the need for reporting and compliance to government requirements. Not-for-profit hospitals are often the ones that need training and support the most yet only can provide it based on having training and development budgets approved by their foundations. The challenge to stay continually current on the latest technologies is a significant one, with this area also being the most critical for retaining talented staff members as well (Greaney, 2006). All of these factors make not-for-profit hospitals very challenging to operate from a financial and compliance standpoint today.
References
Carlson, J.. (2010, January). Not-for-profits: more scrutiny. Modern Healthcare, 40(1), 28.
Thomas L. Greaney. (2006). Antitrust and Hospital Mergers: Does the Nonprofit Form Affect Competitive Substance? Journal of Health Politics, Policy and Law, 31(3), 511.
Speizman, R.. (2009, February). tax-exempt status for hospitals: where have we been -- and where are we going?…
Sample Source(s) Used
References
Carlson, J.. (2010, January). Not-for-profits: more scrutiny. Modern Healthcare, 40(1), 28.
Thomas L. Greaney. (2006). Antitrust and Hospital Mergers: Does the Nonprofit Form Affect Competitive Substance? Journal of Health Politics, Policy and Law, 31(3), 511.
Speizman, R.. (2009, February). tax-exempt status for hospitals: where have we been -- and where are we going? Healthcare Financial Management, 63(2), 62-6.
Peter a Zaleski, & Alfredo G. Esposto. (2007). The Response to Market Power: Non-Profit Hospitals vs. for-Profit Hospitals. Atlantic Economic Journal, 35(3), 315-325.
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