HCM621-0804A-01 Ethics, Policy, and Law in Health Care Management - Phase 1 Discussion Board 2 - Essay Example

Running head: Ethics For-profit versus non-profit ethics in healthcare Here Your and School Here Monday, October 06, 2008 This author discusses a change in status from for-profit to private non-profit children’s hospital in the health care industry. There are advantages and disadvantages to both – is one more ethical than the other? Can a for-profit organization, such as Rosewood Children’s Hospital, switch to private non-profit and adjust to the regulatory controls and changes? New trends also indicate the best path to follow.

For-profitA for-profit hospital will not require accreditation from the Joint Commission on Accreditation of Health care Organizations (JCAHO) but the state laws must be followed, to maintain medical records, patient rights and responsibilities, contracts. JCAHO is an independent, nonprofit organization and they carry out quality assessments at 5,000 US hospitals and 6,000 US health care facilities every three years. (AmericanHospital.com, 2008) It would be in the invested owner’s best interest to attain accreditation regardless because any reimbursement from government entities such as Medicare or Medicaid will still require regulation of care.

It also gives a certain feeling of trust to know that the hospital has passed stringent rules on healthcare. The for-profit corporation is liable for any fiscal or legal issues, and not an individual. As a for-profit organization, the hospitals best interests are usually managed by board of directors and act in the interest of shareholders (if stocks are issued) or the invested owners. A big advantage of for-profit health care is their ability to respond to the demands of patients and employers.

“…a large, nonprofit, staff-model health plan grew rapidly in southern California in the late 1960s and early 1970s as a result of affordable prices, its leaders froze enrollment for several years because of limited capacity. A competitively driven, for-profit, publicly traded organization would have found new capital and expanded its capacity to meet the needs of consumers.” (Hasan, 1996).Taking care of patients in private practice without the risk of influence from a government entity allows doctors and hospital partners design and manage the best quality delivery system they can assemble.

Interestingly enough a for-profit hospital can receive Medicare subsidies (with proper accreditation), increasing their ability to profit. But the disadvantage to the for-profit is deeper scrutiny from the public and media for corporate financial scandals. Another disadvantage is that to retain quality medical care (i.e. trained doctors) the total costs are higher. (Woolhandler, Himmelstein, 1999). “…studies have shown that for-profit hospitals are 3 to 11 percent more expensive than not-for-profit hospitals…” (Woolhandler, Himmelsetin 1999).

Additionally, if continued trend of health insurance opt – outs (employer elects not to provide insurance benefits) are any indication, potential patients will be buying health insurance independently out of pocket. As the provider has to charge more and more from the rising costs from malpractice insurance, lawsuits, complex medical equipment for diagnostic testing the patient will pay. (Kulak, 2005). If the patient has to pay more and if the current economy crises are any indication – the patient, or the consumer, will be shopping elsewhere for cheaper healthcare.

Private non-profit“We provide such support by assessing the impact of the Medicaid expansions over the 1983-1996 period on the incidence of avoidable hospitalizations. We find that expanded public insurance eligibility leads to a significant decline in avoidable hospitalization: over this period Medicaid eligibility expansions were associated with a 22% decline in avoidable hospitalization. But we also find that there is a countervailing and larger impact in terms of increased access to hospital care for newly eligible children, so that there is an overall 10% rise in child hospitalizations due to the expansions.

The expansions have mixed implications for treatment intensity, but appear to be associated with a significant shift in the types of hospitals at which children are treated, with fewer children treated in public hospitals and more in for-profit facilities.” (Dafny and Gruber, 2000). The need for social responsibility to reduce the avoidable hospitalizations could be met with the change to non-profit. However at the same time administrative costs will go up to employ the number of people and legal assistance to ensure that a high quality of healthcare is maintained.

A board of trustees, and increased need for volunteers, to fill in where paid staff might have been hired from for-profit, are part of the changes. The trustees of a board are not paid and are usually chosen from the local communitys business and professional people. To manage the hospital, the trustees appoint a paid administrator. A private non-profit organization may be exempt from holding public meetings and publishing records to the public.One change that will come about with a private non-profit organization is the need to raise donations – fundraising!

Seeking donations both private and public would require additional staff – to handle the onerous task of raising funds. A private non-profit organization is not necessarily tax exempt. The hospital would need to file separately for tax exemption with the IRS and that would require additional legal assistance and administration costs. However, “lost tax revenues from not-for-profit hospitals should be considered a hidden cost to society.” (Woolhandler, Himmelstein 1999). A private non-profit hospital can certainly make a profit – these profits simply would be used in infrastructure improvements or the purchase technologically advanced equipment, as opposed to paying the profits to shareholder or owners.

ConclusionIt would seem that both profit and non-profit health care stand to benefit the patient, a key to the principles of health care, but in different ways. For-profit treats the hospital and its patients as a commodity something that does not seem to fit in well with the traditional Hippocratic Oath and community preconceived expectations (social responsibility). “A fiscal conundrum constrains altruism on the part of not-for-profit hospitals: No money, no mission. With for-profit hospitals, the money is the mission; form follows profit.

” (Woolhandler, Himmelstein 1999). Conversely, both the for-profit and private non-profit follow another trend enjoyed by society: a distrust of socialized medicine by Americans. As a rule, Americans don’t like the government making critical health-care decisions for them and with good reason. (Kulak, 2005). Competing interests such as businesses in health care, insurance companies, health maintenance organizations, physicians, other practitioners, and medical schools all have a play in the decision.

Resources(2008). Hospital Locator - choosing a health care provider in the U.S.A. Retrieved October 19, 2008, from AmericanHospitals.com Web site: http://www.americanhospitals.com/hospitals/hospitalsequal.htm#facilitiesDafny, Leemore S. and Gruber, Jonathan. (February 2000). Does Public Insurance Improve the Efficiency of Medical Care? Medicaid Expansions and Child Hospitalizations NBER Working Paper No. W7555 retrieved on 10/15/2008, from http://ssrn.com/abstract=214912Hasan, Malik M. (April 18, 1996).

Lets End the Nonprofit Charade. The New England Journal of Medicine, Volume 334:1055-1057 , Retrieved 10/13/2008, from http://content.nejm.org/cgi/content/full/334/16/1055?ijkey=db027e2a581ff2ea286cf5a6db38cf7bc68a5206&keytype2=tf_ipsecshaKulak, Daryl (July 07, 2005). Top 10 Trends in Healthcare. Ezine Articles, Retrieved Oct 16, 2008, from http://ezinearticles.com/?Top-10-Trends-in-Healthcare&id=4949Nonprofit Organizations. (2002). In Encyclopedia of Small Business, 2nd ed., (2002) [Web]. Retrieved 10/15/2008, from http://findarticles.

com/p/articles/mi_gx5201/is_2002/ai_n19121412Woolhandler, Steffie and Himmelstein, David U. (03/13/1997). Costs of Care and Administration at For-Profit and Other Hospitals in the United States. The New England Journal of Medicine, 336:769-774, Retrieved 10/16/2008, from http://content.nejm.org/cgi/content/full/336/11/769Woolhandler, Steffie, and Himmelstein, David U. (1999) When Money is the Mission -- The High Costs of Investor-Owned Care The New England Journal of Medicine, Volume 341: 444-446, Retrieved 10/13/2008, from http://content.nejm.org/cgi/content/full/341/6/444?

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