Non-profit Hospital Management Strategies - Assignment Example

Hospital Management Table of Contents Hospital Management Table of Contents Analysis of the Non-profit hospitals vs the for-profit hospitals in terms of their success and growth 3 Analysis of problem/issues/improvement data of non-profit hospitals in comparison to the for-profit hospitals 3 Solution proposal 6 Bibliography 9 Analysis of the Non-profit hospitals vs the for-profit hospitals in terms of their success and growth Analysis of problem/issues/improvement data of non-profit hospitals in comparison to the for-profit hospitals Non profits hospitals are mainly established to serve the poorer section of the society. They are mainly run as charitable organizations which are aided by government or big corporate houses as a pert of their corporate social responsibility initiative. They are guided by the principle of community welfare rather than profit intentions. Their intention was to provide free hospitality to everybody without charging any fee for the services rendered. But with the changing business scenario and the wave of reforms hitting the health care sector, it is becoming increasingly difficult for hospitals to thrive as non-profit organizations. Though non profit organizations enjoy several benefits, one being that they enjoy exemption from paying several taxes such as ‘the local property taxes’ and various ‘corporate taxes’, but with service quality becoming one of the major criteria of sustaining within the industry, it has become one of the absolute necessities of the non profit organizations to redesign their objectives and reorganize their management structure. To survive within the competitive health care industry, the non-profit hospital needs the leadership and guidance of a proper management body which will be able to interpret the necessary changes which the organization needs to adopt and consequently adopt strategies to implement the same within the organization. To operate smoothly, non profit organizations which in the early days depended on the charities made by government and large corporate bodies are now facing an acute dearth of proper funds. This is posing as one of the major constraints challenging the sustainability of the organizations. Without availability of proper funds, it is not possible for the organizations to maintain the infrastructural requirements necessary for ensuring that proper treatment of patients be done without facing any problems or lack of sophisticated medical equipments. Moreover, being in a service industry, the non-profit organizations needs to understand that they can sustain and grow in the industry if they are able to provide superior quality of service. This would attract the patients to get their treatment from these organizations otherwise they would hover elsewhere where the treatment is done more sophistically and with the help of advanced equipments. Profit organizations run more successfully than the non profit organizations because they run the hospitals with the intention for generating revenue and making money as any other businesses are run. For-profit hospitals are owned by specific group of people and have well structured management system which takes decision to ensure that the hospital is able to attract increased number of patients. They have investors who invest in the business which helps the hospital authorities to improve their infrastructure and procure sophisticated medical equipments to provide better modes of treatment to their patients. Moreover, they are able to hire competent doctors and are able to offer attractive salary packages which the non-profit hospitals are able to do. To attract patients and to gain their confidence, Profit based hospitals ensure that the exterior and interior of the hospital remains perfectly organized and very hygienic. This would increase the confidence levels of the patients towards the services rendered by the hospital authorities. They will feel that their patients would be taken well care off without any willful negligence whatsoever. They will feel that they are being served worth the price of admitting their patients in the hospitals. This helps the for-profits hospitals in strengthening their market goodwill and helps in building customer loyalty. This also helps them in increasing the revenues generated with the passage of time which again helps them in offering better improved levels of service. Moreover, these organizations ensure that they provide their employees lucrative salary packages along with benefits. This helps them in retaining their workforce and motivating them to improve their levels of service rendered. On the other hand, non-profit organizations suffer from an increasing challenge that they are not able to retain their workforce. This is because they are not able to offer them huge salary, perks and benefits as offered by the profit based organizations. This leads to employee grievances which stir employee dissatisfaction and as a result people start quitting the jobs of these organizations. These organizations are not able to offer career development opportunities to the employees and as a result they feel stagnated and frustrated. This lowers their morale and the keenness to give their best to the organization leading to high attrition levels. Non-profit organizations lack the approach that is required to maintain their competitive edge in the market. So, to survive in the industry they are feeling an increasing need to transform into profit organizations or building a hybrid between profit and non-profit organizations. Therefore, an ardent need is felt by these non-profit organizations to develop a strong framework which would help them in strategically planning their operations. These organizations lack quality monitoring systems which have been implemented by profit making hospitals to ensure that they adhere with the quality standards outlined by the industry as a whole. Accreditation from quality control boards is essential to earn the trust and confidence of the patients and it also enhances the goodwill of the organization. To grow in the industry, the non-profit organizations need to change their basic focus from being drive with the main objective of providing free hospitality and care to being a customer centric entity. To operate successfully, these organizations needs to adopt a strategic approach in which the employees are able to play a vital role in decision making and the total organizational change should be brought by focusing on the areas of employee engagement , employee empowerment and employee involvement. Profit organizations differ from their non profit counterparts in their management strategy. A profit centric hospital has an aggressive approach as far as the marketing and pricing strategies are concerned. Moreover, they maintain strict compliance with the necessary details needed to ensure a sound financial management of the organization. But non–profit hospitals do not adopt promotional strategies which would help the organization to attract more patients and high class doctors. This makes them unable to strengthen their competitive edge in the market. Being established with the non-profit motive, these organizations are not able to retain their talented workforce as they are not able to offer a host of benefits along with huge pay packages. So, they often are found to face a dearth of skilled employees who can help the organization to carry on with its operations smoothly. So, to remain competitive in the industry, these non-profit organizations needs to undergo an overall organizational restructuring which would encompass redesign of the HR policies and adoption of suitable marketing strategies in order to build their position in the market. Moreover, a huge infrastructural development needs to be done and a constant source of finance needs to be searched which would help these hospitals to revamp its operations. Solution proposal To emerge as competitive units, these not profit organizations needs to adopt the management strategies of the profit making hospitals which would help them in surviving within the industry building their niche in the market. The non-profit hospitals should undergo a thorough SWOT analysis which would help them in understanding the threats and the opportunities that the market offers. This would help them in framing appropriate strategies by which they can build on those opportunities. It would help them to identify their competitors and gain an overview of their position in the market. This organization needs to primarily underline their long term objectives and their vision and mission statement which would help them to frame suitable strategies according to the need of the situation. This would help them to track the direction which would lead to their growth and prosperity within the industry. The non-profit organizations needs to emphasize on cost effectiveness and must ensure that the income generated must not become less than the costs incurred. If such a thing happens, then the organization would not be able to run profitably and ensure a steady growth momentum as they will face a lack of funds to carry on with the other functions effectively. So, these non-profit hospitals need to adopt suitable financial budgeting techniques so that it can control the flow of funds and minimize the chances of misutilisation of funds. These non profit hospitals needs to become investor owned centres which would ensure smooth flow of funds. This would help these non-profit hospitals to strengthen their infrastructural capabilities and this would help them in building their brand image in the long term. To provide suitable treatment to patients, hospitals need sophisticated medical equipments which are largely lacking in these non-profit hospitals as they are mainly run by charity. But to ensure that they are able to treat their patients properly, these hospitals need to ensure that modern medical equipments are available for the same. Moreover, the paramedical staffs and the nurses need to be trained accordingly so that they are able to deliver superior quality of services within a shorter span of time which is needed at the time of treating critical patients. To retain the employees for a longer span of time, the employees need to be informed about the career development opportunities that the organization intends to provide to the employees. Moreover, the organization needs to offer its employees suitable incentives to increase their morale. The organization also needs to build a congenial work atmosphere and a team culture which would motivate the employees to give their best to the organization. Organizational restructuring can be brought about in these organizations by forming joint ventures and entering into mergers. This would help the entities to join forces and would enable them to optimally utilize the resources available which will in turn maximize the probability of generating greater profits. So, it’s apparent that this non-profit hospitals in order to survive within the competitive industry requires a full fledged organizational restructuring which will lead to the revamping of all its business operations. This would make these organizations capable of sustaining in the long run. The nonprofit organizations need to build employee loyalty by adopting measures which would enable these organizations to ensure enhanced levels of employee engagement and involvement. This would enhance their morale and subsequently reduce the chances of higher levels of attrition. To emerge as strong entity in an industry, an organization needs to understand that it must adopt measures by which it can retain its workforce for a longer span. So, these non-profit organizations should not only redesign their compensation structure but would also make it a point to imbibe non-financial motivators within the work environment. Providing financial incentives cannot retain a workforce for a longer span, so to grow and sustain within the industry the companies should devise policies by which they are able to enhance the morale of the employees and build within them a sense of belongingness to the organizational objectives. Proper training methods should be identified and training on how to handle modern medical equipments should be made known to the employees. The career path of the employees should be framed and they should be informed about their possible growth within the organization. Otherwise these organizations would not be able to prosper and ensure higher growth in the long term. To grow in the competitive health care industry, these non-profit organizations needs to follow the strategies adopted by profit hospitals and reorganize their management policies accordingly. Though these non-profits hospitals were build to serve the society at large but with changing business scenario and more and more new competitors coming into the market, these non-profit organizations need to revamp their operation .this will enable to strengthen their existing organizational capability and would lead to an overall organizational development. So, it’s of utmost necessity and the need of the hour for these non-profit hospitals to understand the immediate changes that need to incorporate to strengthen their competitive edge in the market. This would also help them in attracting increased number if patients and would lead to their overall growth in the long term. Bibliography Gray B.H., (1993). The Profit Motive and Patient Care: The Changing Accountability of Doctors and Hospitals. Harvard University Press. Powell W. W., (2006). The Nonprofit Sector: A Research Handbook. Yale University Press Johnson N., (1995). Private markets in health and welfare: an international perspective. Berg Publishers Rorem C. R., (1940). Non-profit hospital service plans: historical and critical analysis of group hospitalization, a non-profit, non-political application of the principle of insurance to the purchase of hospital care. Commission on hospital service, American hospital association, 1940 Miller R. D. and Hutton R. C., (2004). Problems in Health Care Law. Jones & Bartlett Publishers. Cutler D. M., (2000). The changing hospital industry: comparing not-for-profit and for-profit institutions. University of Chicago Press Gray B.H., (1986). For-profit enterprise in health care. National Academies Press Johnson E. A., (1986). Hospitals under fire: strategies for survival. Aspen Publishers, Weisbrod B. A., (2000). To Profit Or Not to Profit: The Commercial Transformation of the Nonprofit Sector. Cambridge University Press Drucker F. P. (1990). Managing the non-profit organization: practices and principles. 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