Leadership Strategy Issues in Nonprofit Hospitals - Essay Example

? Leadership Strategy Issues in Nonprofit Hospitals (College Leadership Strategy Issues in Nonprofit Hospitals Introduction Non-profit hospital is a kind of charitable firm which has the characteristics of an organized non-profit corporation. Majority of non-profit hospitals in the United States are affiliated with a religious denomination and generally follow conventional means of offering medical care services. Non-profit hospitals are considerably different from government owned public hospitals and private for-profit organizations with regard to their features and functions. As The Attorney General’s Community Benefits Guidelines (n.d.) points out, the non-profit hospitals have the fiduciary obligation to extend their services to concerned communities on the account of individuals’ tax-exempt status. The governing board and senior management are responsible for framing various organizational strategies which would enable the non-profit hospitals to dispose their duties and responsibilities effectively. In contrast, an inefficient strategic management may adversely affect the basic values of such organizations. Therefore, the non-profit hospitals must oversee the development and implementation of the community benefits plan. To be more specific, they must also design the method to be followed, resources to be accumulated, and the mechanism to be deployed for periodical monitoring. Significance of mission in leadership strategy To begin with, since non-profit hospitals are also separate legal entities, they can also deal with revenues and expenses; and the assets of such hospitals are publicly held. Since these organizations operate on a charitable basis, they may get various sources of public finance including donations and others. Hence, officials dealing with finance department tend to misuse such organizations’ funds which in turn would affect the basic objective of the non-profit hospitals. Although, a well organized audit work may assess the arithmetical accuracy of hospital’s financial statements, generally non-profit organizations do not give much emphasis on a detailed audit method. In order to eliminate such threats, there must be an efficient and genuine management that would regularly deal with different managerial functions. The Attorney General’s Community Benefits Guidelines oblige the non-profit hospitals to serve the health and social needs of the community they serve (Community benefits guidelines for hospitals and HMOs, 2007). These guidelines insist that hospitals must collaborate with community representatives in order to identify their needs and to plan appropriate prevention programs. Fletcher Allen health care community benefits strategic plan (2010) suggests that the major mission of a non-profit hospital is to deliver the proposed community benefits plans effectively to the communities it serves. So as to implement this mission efficiently, usually hospital management designates a community benefits team that comprises of a number of hospital leaders and different operational group representatives. This process requires efficient strategic leadership skills because an ineffective grouping may largely minimize the result of the community benefits plan. The management must also ensure the service of social workers and health educators to reach the respective communities easily. While implementing the proposed program, it is necessary for the firm to monitor the efficacy of the program at various phases, because it would help the management to identify the weaker areas. Hence, it is advisable for the hospital management to designate a community benefits manager who is responsible for closely watching the operational efficacy of the program. Importance of financial management in leadership In order to implement the community benefits plan efficiently, the hospital must adequately deal with financial management. It is obvious that these organizations carry out their operations on non-profitable basis, and therefore, they would not have a stable source of income. In the opinion of Walker (2005), most of the financial requirements of the non-profit organizations are funded by governmental authorities, public organizations, and other charitable concerns. Therefore, the hospital management must conduct a needs assessment program in order to estimate the total financial requirements before launching its community benefits plan. In the view of Royse, Thyer, and Padgett (2010, p.59), the needs assessment program may help the management to identify different strengths and weaknesses in the strategic leadership also (p.59). This process would assist the organization to compare the institutions’ mission statement with the features of the proposed program and thereby they can formulate best fitted policies to bridge the gap between those two. An evaluation of both individual projects and the program as a whole would benefit non-profit organizations to ensure the compatibility and economic viability of the formulated program. For instance, the community benefits leadership team may self-analyze its operations and compare it with the ultimate mission of the organization. It would help the community benefits team to make necessary modifications in their function and thereby contribute to the capability of the total program. It is often observed that financial management in non-profit hospital cannot effectively meet the central elements of the organizational mission. According to King and Avery (1999), inefficient application of money sources would seriously impinge on the basic goals of the project as this inefficiency would cause scarcity of finance. Significance of budget in leadership strategy As discussed earlier, budget is the main factor that manages all financial requirements of the proposed project at various phases. Wason (2004, p.65) argues that the estimation of financial needs will certainly aid the organization to formulate a budget for the specific project. The budget estimates approximate revenues and expenses for each stage of project development and implementation. While formulating the budget, it is recommendable for the management to take previous project revenues and expenses also into account. After the completion of the budgeting, the management has to find out additional financial sources if the prepared budget requires any. An effective budget formulation and working capital accumulation will greatly contribute to the success of the proposed community benefits plan. However, the budget may not be cent percent accurate in all cases due to various internal and external factors. For instance, external factors like degree of adverse climate changes and thereby intensity of diseases can play a crucial role in determining the authenticity of the budget. Likewise, accuracy of managerial forecast is an internal factor that can vary the level of effectiveness of the budget. This failure in budget would raise severe difficulties to management and sometimes it can impede the community benefits plan. Conclusion The above discussion reveals that leadership strategy issues affect the non-profit hospitals more than any other internal or external factors. Evidently, leadership strategy issues in non-profit hospitals arise mainly associated with their mission, financial management, and budgetary control activities as they are the essential elements of effective leadership. However, an efficient organizational management may minimize the leadership strategy issues to a great extent. The study also suggests that initiating a community benefits leadership team would greatly assist the hospital management to vie with all possible strategic issues. References Community Benefits Guidelines Nonprofit Acute Care Hospitals. (n.d.). “The Attorney General’s community benefits guidelines for nonprofit hospitals”. Office of Attorney General Martha Coakley. Retrieved from http://www.mass.gov/Cago/docs/healthcare/hospital_guidelines.pdf Community benefits guidelines for hospitals and HMOs. (2007). Attorney General Martha Coakley. Retrieved from http://www.cbsys.ago.state.ma.us/healthcare/hccbguides.asp “Fletcher Allen health care community benefits strategic plan serving our community and our region”. (March 2010). Community Benefits Strategic Plan. Retrieved from http://www.nonprofithealthcare.org/resources/CB-Plan-FletcherAllen.pdf King, J. G & Avery, J. E. (April 1999). Evaluating the sale of a nonprofit health system to a For-profit hospital management company: The legacy experience. HSR: Health Services Research. Retrieved from http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1088987/pdf/hsresearch00016-0110.pdf Royse, D, Thyer, B & Padgett, D. (2009). Program Evaluation: An Introduction. USA: Wadsworth: Cengage Learning. Walker, D.M. (May 2005). ‘Nonprofit, for-profit, and government hospitals: uncompensated care and other community benefits’. United States Government Accountability Office. Retrieved from http://www.gao.gov/new.items/d05743t.pdf Wason, S. D. (2004). 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