Should non-profit organizations, health care in particular, be allowed to make a profit? For purposes of this discussion, profit is defined as surplus of revenues over expenses.
Write a paper (800 -1,250 words) on the concept of governance within a health care organization. Address the following:
1) Corporate structure and how it impacts the effectiveness of governance.
2) Various roles of governance within the organizations and how they should interact within a team setting.
3) Concerns to consider when developing and strengthening a team culture. For example:
a) Team members working independently or at cross-purposes.
b) “Turf battles” that can slow or impede the accomplishment of project purposes.
c) The tone of meetings and interactions that can be seen as negative, manipulative, directive, and/or secretive.
d) Failure to properly apply governance concepts.
e) A discussion of the Sarbanes-Oxley Act and its impact on governance and senior management.
4) Prepare this assignment according to the APA guidelines found in the APA Style Guide, located in the Student Success Center. An abstract is not required.
5) This assignment uses a grading rubric. Instructors will be using the rubric to grade the assignment; therefore, students should review the rubric prior to beginning the assignment to become familiar with the assignment criteria and expectations for successful completion of the assignment.
RUBRIC:
40.0 %Address the Concept of Governance Within a Health Care Organization (Demonstrates thorough knowledge of governance within health care organizations. Clearly defines the impact of corporate structure, and the roles and interactions within team settings. Addresses concerns to consider when developing and strengthening a team culture.)
30.0 %Integrates Information From Outside Resources Into the Body of Paper (Supports main points with references, examples, and full explanations of how they apply. Thoughtfully, analyzes, evaluates, and describes major points of the criteria.)
7.0 %Assignment Development and Purpose (Thesis and/or main claim are comprehensive. The essence of the paper is contained within the thesis. Thesis statement makes the purpose of the paper clear.)
8.0 %Argument Logic and Construction (Clear and convincing argument presents a persuasive claim in a distinctive and compelling manner. All sources are authoritative.)
5.0 %Mechanics of Writing (Includes spelling, punctuation, grammar, and language use.) (Writer is clearly in command of standard, written, academic English.)
5.0 %Paper Format (Use of appropriate style for the major and assignment.) (All format elements are correct.)
5.0 %Research Citations (In-text citations for paraphrasing and direct quotes, and reference page listing and
formatting, as appropriate to assignment and style.) (In-text citations and a reference page are complete and correct. The documentation of cited sources is free of error.)
LECTURE NOTES:
Introduction
Over time, the role of Governance has evolved and changed. In the past, governance committees and overseers were made up of dedicated individuals who were more concerned with the social image the institution conveyed to the community at large. In the case of Catholic hospitals, the corporation’s board consisted largely of nuns and other religious leaders. The Chief Executive Officers (CEO) was not necessarily a member of the Governance Board. He or she could be invited to address the Board on a given subject, but were not often involved with governance-related decisions. In non-Catholic institutions, the Governance Board was made up of largely lay individuals with various business backgrounds and community representation. Organizational power was disproportionately distributed, with the Governance Board having the greatest portion. Various internal committees would provide occasional operational updates to governance.
Types of Hospitals
The type of hospital influences the role of governance and organizational dynamics, as well as whether or not the team concept is reasonably applicable. The United States has several types of hospitals, both private and government-owned hospitals under independent management.
• Community Hospitals: The majority of all U. S. hospitals are classified as community hospitals. Most community hospitals are non-federal, short-stay facilities. Its services are available to the general public. Included in community hospitals are hospitals operated by local and state governments that serve the general public. Hospitals such as Veterans Affairs Hospitals (VA), prison infirmaries, and college and university infirmaries are excluded as community hospitals because their services are not available for the general public. Also excluded from designation as community hospitals are long-stay hospitals such as psychiatric facilities, tuberculosis hospitals, and other chronic disease hospitals.
• Public Hospitals: Public hospitals are generally financed and operated by agencies of federal, state or local city and county governments, and most are open to the general public. They are nonprofit facilities and admit many patients who cannot afford to pay for medical care. Public hospitals not open to the general public are for the treatment of general medical conditions, such as mental illness and tuberculosis.
• Drew Medical Center, presently renamed Martin Luther King Care center, is a Los Angeles County public facility that serves the inner-city public of Watts, Compton, and South Los Angeles, California. At one time, the United States Military field doctors and medics took part of their medical training at Drew to specifically experience and treat the plethora of gunshot wounds, stabbings and other severe and traumatic injuries– the same type of injuries they would encounter in battlefield situations.
• Private Nonprofit Hospitals: Private, nonprofit hospitals are also known as voluntary hospitals. These hospitals are operated by philanthropic foundations. A well-known and respected example of such a facility is the Danny Thomas St. Jude’s Children Hospital in Memphis, Tennessee. Others in this category are religious-owned hospitals, such as Catholic and Protestant denominations. Jewish philanthropic hospitals were established so that Jewish patients could observe their dietary laws and provide training and employment for Jewish physicians, who at one time were excluded from many educational and medical institutions. It is important to point out that private nonprofit hospitals do not discriminate or prevent public access; they are, however, sensitive to the specific spiritual and dietary needs of the sponsoring denominations (Raffel and Raffel, 1994, pp. 131-132.)
• Private, For-Profit Hospitals: Sometime referred to as investor-owned hospitals, for-profit hospitals are owned by individuals, partnerships, or corporations and operated for the financial benefit of the entity that owns the institution. Accordingly, a major goal of a for-profit organization is to provide a return on investment to its shareholders.
• Other Types of Hospitals. Specialty hospitals admit only certain types of patients with specific illnesses or conditions. Some of the focuses of these types of health care facilities traditionally include tuberculosis, psychiatric, rehabilitation, and children’s hospital. Specialty hospitals are, for the most part, non-profit institutions.
The Role of Profit
As a matter of discussion, consider that many people assume that non-profit organizations do not make a profit. Should non-profit organizations, health care in particular, be allowed to make a profit? For purposes of this discussion, profit is defined as surplus of revenues over expenses. Defined by Merriam-Webster (2010), it is “the excess of returns over expenditure in a transaction or series of transactions” (profit, 2010).
Consider that no business can survive if it continually spends more than it takes in; thus, for-profit or nonprofit, any organization must make profit; how those profits are distributed differentiates between the for-profit and nonprofit organization.
An example of a for-profit hospital transforming from being a financially failing enterprise to one making a profit occurred in the 1980s. A physician-owned, 200-bed hospital located in the inner city of Los Angeles determined that it could not sustain its operations over a long period of time. A new CEO was brought in to improve the hospital’s viability. It was discovered that the hospital was failing due to a lack of the modern technology necessary to treat certain diseases. The lack of technology caused reduced revenues, which prohibited the acquisition of the necessary technology. The new CEO negotiated a referral affiliation with the university medical center that permitted the treatment of its patients at the university. The university’s modern technology also gave a boost to the reputation and image of the hospital. Some of the additional organizational adjustments made included hiring a team of young dynamic physicians; replacing minor but significant staff; and reinforcing the Board with improved, more effective membership. The number of patients admitted improved tremendously when community citizens recognized the capacity for improved medical care. (Basic story as related by B. Dickens, personal communication, June, 2010) As an aside, physician-owned hospitals are disappearing due to conflict of interests.
Over the past several decades, many hospitals not able to deliver the highest quality of care because they lacked the ability to purchase expensive, state-of-the-art technology have been acquired by large investor health care organizations.
As noted earlier, whether for-profit or nonprofit, the organization must make a profit. The Internal Revenue Code, Section 501(c) (3) grants tax-exempt status to not-for-profit health care organizations. They are exempt from federal, state, and local taxes such as income, sales, and property taxes. The exemptions are conditioned upon not-for-profit corporations that:
• Provide some defined public good;
• Have board members that are not compensated for their services; and
• Provide tangible evidence of the benefits to the community in exchange for the tax relief received.
Teams in Governance Effectiveness
Among the roles and responsibilities of teams in enhancing governance effectiveness, senior leadership is must sufficiently communicate change in a timely manner. In managing how change is to be communicated, a strategy must be developed with the understanding that communication is a dynamic process that must be performed prior to, during, and after the proposed change is implemented. Communication of change is most effective when accomplished by and through a team and its members. Members of the team should include representation by the governance board as well as senior management, middle management, and other relevant stakeholders. For example, the heads of the affected departments or functions should be necessary parts of the team. Senior executives should be leaders: The Head of Nursing should communicate to all nursing and related nursing staff; the Chief of Medical Staff should communicate to all medical and related staff; and the Head of Housekeeping should communicate to his staff. Where and when appropriate, a team for press releases should communicate to the community via methods such as television, radio, newspaper, and Internet.
The hospital organization is different than most other business organizations in a number of ways; yet, as with other business industries, it is responsible to its stakeholders. Hospital stakeholders may include, but are not limited to, the government, accreditation agencies, the community, and insurers. In the case of for-profit hospitals, the list also includes stockholders, partners, and investors in the hospitals. Most physicians belong to a group separate from the Governance Board, and as a group may operate parallel to the administrative structure. They wield much power, and may present conflicts between themselves and the CEO. It is an interesting dichotomy, but most often the nursing staff, pharmacists, diagnostic technicians, dieticians, and others are administratively accountable to the CEO yet professionally accountable to the physicians group. In extreme disputes and conflicts, where do their loyalties lie?
Conclusion
The CEO must provide the leadership to satisfy various stakeholders, community, and medical staff. He or she does so by clearly communicating the mission and employing participative management teams, which demands that all stakeholders become productive contributors.
References
profit. (2010). In Merriam-Webster Online Dictionary. Retrieved August 26, 2010, from https://www.merriam-webster.com/dictionary/profit
Raffel, M. W., and Raffel, N. K. (1994). The U.S. health system: Origins and functions (4th ed.). Albany, NY: Delmar Publishers.
PLACE THIS ORDER OR A SIMILAR ORDER WITH NURSING TERM PAPERS TODAY AND GET AN AMAZING DISCOUNT
