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Healthcare, Coursework

Healthcare Business Basics

Healthcare Business Basics

The primary goal of corporations with for-profit status is to accrue shareholder wealth. For-profit corporations derive their financial goal from their primary goal. To achieve this goal, these corporations must sell a product or provide a specific service at a fee. The finance team members in these organizations must be ready to put in extra effort to fulfill the performance goals. Compensation structures in these corporations are mainly incentive-based. Various measures are used to maximize profits, including working for extra hours, cutting unnecessary spending, and laying off some employees. The main goal of not-for-profit corporations is to provide service to the community. Their financial goal is to ensure the financial viability of the corporation. They operate fundraising efforts with donations and corporate sponsors. Unlike for-profit corporations, they have lower financial pressure.

The financial goals of for-profits lead to a higher operational discipline; hence a high quality of care is provided. The quality of care provided by not-for-profits is lower than that provided by for-profits. Employees working in for-profit corporations are most likely to put in more effort because they have to meet a particular financial target (Nigri & Baldo, 2018). They will provide better services to fulfill the desires of their clients. The difference in financial goals between for-profit and not-for-profit corporations should not affect the quality of care provided. This is because all clients deserve to get the best care for their well-being.

Healthcare managers should understand tax laws to make financing decisions. This is particularly important to for-profit hospitals. They have to clear property taxes and sales taxes. If the managers lack this knowledge, they are likely to face financial hardships during the operation of the hospital. Taxes will also influence the ability to raise contribution capital and the availability of operating cash flows to shareholders of for-profit corporations.

The most interesting piece of information I learned is the legal forms of business. Businesses can either be proprietorships, partnerships, corporations, or hybrid businesses. It enabled me to know the ownership of each category of business and its merits and demerits. This week’s content is essential because it provides knowledge of the types of businesses and how to make financial decisions based on tax laws.

References

Nigri, G., & Baldo, M. Del. (2018). Sustainability reporting and performance measurement systems: How do small- and medium-sized benefit corporations manage integration? Sustainability (Switzerland), 10(12). https://doi.org/10.3390/su10124499

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Question 

Healthcare Business Basics

After reviewing the course materials for this week, answer the following questions in your own words. Do not quote verbatim from the text or other sources. If you use outside resources to support your response, please provide a citation.

Healthcare Business Basics

Healthcare Business Basics

  1. How does for-profit or not-for-profit status influence the practice of finance? In answering, consider the financial and organizational goals of for-profit and not-for-profit corporations.
  2. In your opinion, how might the financial goals of for-profits and not-for-profits influence the quality of care provided? And should it?
  3. Why is it important for healthcare managers to understand tax laws?
  4. Lastly, what was the most interesting piece of information you learned in this week’s lesson? Share any thoughts on the content you encountered this week.