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HealthCare Assignment

Question

Consider the following scenario: You are currently working at a large academic medical center in an urban community in the United States. For the last several weeks, you have heard that other health care organizations are looking to build within a 10-mile radius of your organization. Your CEO has asked you to research the other organizations and how their services are similar and different to what your organization currently offers.

Discuss the following questions (ANSWER ALL OF THEM!):

1. What are some of the business and financial implications that may affect staffing, programs offered, and policies and procedures at community not-for-profit hospitals and large academic medical centers? 2. How do those business and financial implications differ between the two organizations?
3. What financial impact could occur if a for-profit-organization builds within your community?
4. What are some financial benefits of being an academic facility?

Answer

Provider Organizations

Question 1

Community not-for-profit hospitals and large academic medical centers are mainly dependent on the high fees that they charge for the provision of medical services. The revenues collected are used to run hospitals. Academic medical centers are involved in three main activities that include training of physicians, medical research, as well as providing medical care, mostly tertiary care. The prices of academic medical centers are therefore high (Fox & Wasserman, 1993). For this reason, competition from other health care organizations can lead to reduced revenues leading to staff cuts and change of policies. For example, due to competition, Harvard University decided to own no hospitals or run clinical practice. The competition led to its change of policy. Reduced revenue affects the running of not only care services but also research and training of physicians. The academic medical centers might, therefore, be rendered incapable of attracting a lot of professional physicians. As for community not-for-profit hospitals, competition affects its operations due to lack of revenue stream. They provide tertiary medical services at a fee that helps in running the hospital. The presence of other health care organizations leads to reduced patients because they are attracted to advanced services offered at a reduced cost. Increased health plans have led patients to prefer efficiency in other healthcare organizations as opposed to academic medical centers and community hospitals.

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Question 2

Business and financial implications in community not-for profit hospitals differ from academic medical centers in various ways. Due to the academic medical centers’ dependence on the high fee that they charge their patients, revenue streams can go down, thus affecting operations (Morrison, 2013). However, community hospitals tend to offer fair costs for tertiary care. The structuring of health plans means that more patients will prefer to seek care in other healthcare institutions due to efficiency. Nevertheless, community hospitals still get patients due to their rural locations and their strong clientele base. Community hospitals are affected in terms of business because they provide tertiary care while academic medical centers are affected due to their focus on research as opposed to efficiency. They concentrate on using new technologies and teaching the learner physicians. Community hospitals on the other hand only focus of provision of basic healthcare hence are not affected much by change of business practices.

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Question 3

There will be reduced revenue streams if for-profit hospitals are built in my community. People will prefer to go to the for-profit hospital because of its efficiency and availability of professional personnel (Aaron, 2000). The earnings of the hospitals from the fees charged on patients will thus go down. Besides, most patients have health plans through the government schemes hence find it affordable to go to the for-profit hospitals. For-profit hospitals focus on efficient service that will draw a lot of patients compared to the community hospital.

Question 4

Being an academic facility is beneficial mainly because of the varied income sources manifested. The academic facilities earn their money through student fees as well as the clinical fees charged on patients. They are also subject to grants from donors or government for purposes of conducting research. Lastly, academic hospitals often get some funding from government for the training physicians to take care of their health insurance, and this adds to their income potential.

References

Aaron, H. J. (2000). The Plight of Academic Medical Centers. Brookings. Retrieved from https://www.brookings.edu/research/the-plight-of-academic-medical-centers/

Fox, P.D. & Wasserman, J. (1993). Academic Medical Centers and Managed Care: Uneasy Partners. Health Affairs, 12(1): 85-93.

Morrison, I. (2013). The Future of Medical Academic Centers. Hospitals and Health Networks.  Retrieved from http://www.hhnmag.com/articles/6387-the-future-of-academic-medical-centers

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