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Strategic assignment analysing for-profit ownership of the healthcare system


Task: Provide a summary analysis comparing not-for-profit and for-profit health systems. What are the benefits and risks of each model? Is there evidence of the superiority of either system? Does your home state allow for-profit ownership of hospitals? Conclude your strategic assignmentsummary with a recommendation for Selfless Health. Should it accept the takeover? Why or why not?


Selfless Health is the Integrated Healthcare Delivery System, and it includes three nos. of community hospitals, an academic medical centre, a care facility on a long-term basis and home healthcare agency services. The strategic assignmentfocused on analysing the comparison between the not-for-profit and for-profit healthcare systems and the benefits and risks associated with each model of the healthcare system. The strategic assignment also discussed the acceptance level of For-profit ownership of hospitals in the United States. The strategic assignment also suggested recommendations for Selfless Health to take over the for-profit ownership of the healthcare system to offer better healthcare facilities to people.

Benefits and Risks of Not-For Profit and For-Profit Healthcare system discussed in the strategic assignment
Benefits of Not-For Profit Healthcare system:

The primary purpose of the not-for-profit healthcare system is to provide effective and quality healthcare services to the community. They make huge investments in their healthcare facilities, and they also work with other healthcare community partners to address the healthcare needs of the community (Ssennyonjo et al., 2018). It is found in the strategic assignmentthat not-for-profit hospitals are qualified as charities, and they are not required to pay sales tax, property tax, or federal or state income tax. They are accountable for distributing the additional capital back to the hospital's surrounding communities. Healthcare policymakers regularly scrutinise non-profit hospitals to evaluate the quality of the healthcare facilities offered by the not-for-profit hospital and justify the general tax exemptions facility received by the not-for-profit hospital. They are influential in boosting health equity and improving healthcare services according to the population's healthcare needs (Jeurissen et al., 2021). They are well suited for improving the population's health as the anchor institutions and trusted clinical healthcare service providers in the local communities. Goode, Owen, Page & Gatewood (2019) mentioned in the strategic assignmentthat they qualify their healthcare services as a community benefit. They are greatly focused on a high level of community engagement, and they are committed to advancing community health. They offer free stabilising healthcare services to all people who seek healthcare needs. They charge a lower price rate than for-profit hospitals (Goode, Owen, Page & Gatewood, 2019). They are better able to plan for their long-term future. They are also liable for collecting feedback from their nearest community to understand the exact cause of healthcare issues. They are also liable for offering a wide range of healthcare services to the community without focusing on generating money from their services (Artiga& Hinton, 2019). There has no incentive and extra upcharge costs for patients to acquire the healthcare services.

Risks of Not-for Profit Healthcare system mentioned in the strategic assignment:
Not-for-profit hospitals have faced more administrative hurdles and the issue of bureaucracy. Patient who has an issue with their healthcare services need to go through many hoops to get the exact solution for an issue. According to Hinton (2020), Complexity in the healthcare policies sometimes confuses patients who have a low education level and don’t have the ability to understand the billing process and complicated paperwork. Sometimes patients may not find the latest technology and modern healthcare services at not-for-profit hospitals (Hinton, 2020). It is found in the strategic assignmentnot-for-profit hospitals may not have the appropriate financial resources to invest in the modern and newest medical equipment. They attract people who basically need charity care and offer care to people who don’t have health insurance facilities (Verulava, Jorbenadze&Dangadze, 2018). It increases the waiting time for the patients to acquire the effective healthcare facility.

Benefits of For-Profit Healthcare system:
For-Profit Hospitals boards maintain a business-driven culture, and they are liable for giving the profit percentage of the total income to the shareholders of the healthcare organisation. Aeschbacher&Addor (2018) stated that they are owned by and accountable to the healthcare organisation’s investors, and they ultimately receive huge profits in the form of increased equity and dividends. Engagement of the shareholders increases the ability of For-Profit organisations to invest their financial resources to upgrade their healthcare facilities, purchase costly medical and healthcare equipment and take the necessary actions to upgrade the technology systems (Aeschbacher&Addor, 2018). It is analysed in the strategic assignmentthat it improves the ability of hospitals to provide the best healthcare services most efficiently. They also utilised their own resources like specialised in-house consultants and legal counsel to offer the best healthcare services to the community and people without hiring outside professionals. They can employ their own lobbyists and policy professionals to promote their healthcare agendas (Stall et al., 2020). They also don’t have the restrictions and limitations to advocate legal laws to keep the organisation profitable. They are liable for paying the property and income taxes to raise the capital of the organisation.

Risks of For-Profit Healthcare system mentioned in the strategic assignment:
Earning profit from the individual patient is the top priority of the For-Profit Healthcare organisation. They treat the healthcare service as a commodity rather than considering it as the people's right. Their high-cost pricing range of healthcare services exacerbates the problem of accessing the appropriate healthcare services by all (Ssennyonjo et al., 2018). It is found in the strategic assignmentthat they constitute unfair competition against not-for-profit healthcare organisations. They charge incentives to upcharge the patients for non-essential services. According to Wiederhold (2020), the organisational controls adversely affect the patient and physician relationship, and it creates conflicts of interest that diminish the quality of the healthcare and erode the trust of the patient and trust of the public in their medical profession (Wiederhold, 2020). It also undermines the education facility of medical healthcare services that creates an impact on the skills and knowledge of the healthcare professionals.

Evidence of Superiority ofNot-For Profit (NFP) Healthcare system in thestrategic assignment
The flexible framework of the NFP healthcare system influences them to invest in serving the community. During the Covid-19 crisis, NFP hospitals focused on equal health access to increase the access to healthcare facilities among people. It is found in the strategic assignmentthat they also focused on offering effective healthcare services to people who suffered from social isolation and food insecurity issues. They also take action to offer services for stress management and remove the issue of health disparities. They always focus on offering high-quality clinical care and support to charitable institutions to support the local communities. For example, Allina Health Organisation frames community health workers as the "Sweet Spot" and utilises the health system resources to meet the community's needs. They identified and collected information regarding healthcare issues across the different regions in which areas the hospital works, and they developed system-wide effective initiatives for giving the best healthcare services to meet healthcare needs. They recently developed Health-Powered Kids, which is an online tool for addressing obesity in childhood; Change to Chill, an in-person program and web-based online platform for improving the mental health and wellness of teenagers and The Hello4Health Program for addressing the issue of social isolation for the senior people. It is found in the strategic assignmentthat they organised the community-driven process and also worked with the community members and local organisations to empower the local residents and develop the healthcare action team in the community to serve quality healthcare services. They have more flexibility in handling health issues in the community. The Government used the not-profit hospitals for teaching and giving training to specialists, new physicians, healthcare professionals and nurse practitioners. As per the strategic assignment findings,it helps the healthcare professional to know about the wide range of diseases and critical healthcare conditions of patients to improve their healthcare skills and knowledge.

Evidence of Superiority of For-Profit (FP) Healthcare system:
For-Profit healthcare organisations offer modern-technology-based healthcare services to people. In the business world, the involvement of the For-Profit organisation increases the competition level, and it drives entrepreneurs and healthcare service providers to innovate new products and healthcare facilities and services to serve the best healthcare services. The pressure of competition addressed in the strategic assignmentpushes healthcare service providers to lower operating costs and improve the efficiency of the healthcare service to serve prompt healthcare services to the consumers. Moreover, the increasing number of FP healthcare organisations creates huge job opportunities for eligible and knowledgeable local residential people that improve the quality of life of the local community and strengthen the local economy. For-Profit organisations have the ability to invest in purchasing the latest model of medical equipment to provide advanced healthcare services to people. The increasing number of For-Profit organisations in the country increases the access to equity capital, which leads to enhanced debt capital access. As per the strategic assignmentfindings, it helps in meeting the capital requirements of the healthcare sector, and it reduces the need for governmental intervention to raise capital through taxes. Moreover, the construction and acquisition activities of For-Profit Organisations also enhanced the availability of healthcare services for people who have the ability to pay for healthcare services. It also improves the quality of healthcare services by healthcare providers. For example, Methodist Hospital offers exceptional care for cancer, emergency services, orthopaedics, gynaecology services and other acute care facilities for their community and people.

Allowance of For-Profit Ownership of Hospitals in United States:
It has been evident in the strategic assignmentthat 24% of total community hospitals in the US are FP Healthcare Organisations, and 57% of total hospitals are NFP Hospitals. Hospitals in Colorado, United States, continue to rank most profitable in the entire nation. It makes the state one of the most profitable and expensive for hospital care, according to the report of the Health Care Policy and Financing Department (Samuelson, 2017). The increasing number of FP Hospitals increases the hospital profits that uses in building reserves, capital investment and expanding the market share. The higher profits from the FP Hospitals expanded due to higher reimbursements from Health First Colorado, a Medicaid Program of Colorado and the expansion of the Health Care Coverage Facility. The continued increasing trend of high profits of hospitals leads to the health care cost of Colorado consuming more of Coloradans’ dollars and the total budget of the state. In 2020 it is found in the strategic assignment, the hospitals in Colorado earned a profit margin of 9.3% in comparison to 12% in 2019 despite the pandemic and revenue volatility. The profit margin level of Colorado Hospitals is the highest in the nation as lawmakers of Colorado move to cap the costs of Healthcare (Hinton, 2020). However, the Government and healthcare authority of Colorado are now focusing on influencing the profit and non-profit hospitals to control their price. Per-patient payment in hospitals decreased by 4.4% from 2018 to 2019, and Costs to provide healthcare services also decreased by 2.7% (Samuelson, 2017). Currently, hospitals are now committed to offering affordable pricing strategies to offer healthcare services to people and improve the efficiency of a healthcare facility. It is evident in the strategic assignmentthat Colorado, United States, allows the FP ownership of hospitals. It is evident that hospitals generate more than $2.8 Trillion of the total economic activity in the US, and also hospitals provide more than 5.7 million employment opportunities to Americans (Samuelson, 2017). Moreover, Hospitals spend more than $852 billion amount on goods and services (Samuelson, 2017).

Recommendations for Selfless Health:
Selfless Health as per the strategic assignment findings, should accept the takeover approach by a Massive Mega-Capital firm to acquire the health system. The involvement of the MMC Firm would help the Selfless Hospital invest in the hospital's development and procurement. It would help the hospital to install more upgraded and advanced technological equipment in the healthcare services to make it more innovative and efficient for the community and people (Wang, Kung & Byrd, 2018).

The findings of the strategic assignmentwould help Selfless Health to invest in Research and Development process, and they should invest their financial resources in the research and development process to innovate new products and new healthcare services for people. It would help in improving the overall healthcare services of the hospital.

It would help the hospital to increase the investment in training and academic purpose. They should improve the training and teaching session through their academic medical centre to provide proper skills and knowledge to medical professionals and medical students. They should also organise periodic training and teaching session for existing medical staff, healthcare professionals, nurse practitioners, and health caregivers to enhance their skills and knowledge to improve the efficiency of healthcare services (Verulava, Jorbenadze&Dangadze, 2018). It is found in the strategic assignment that it would help the hospital to improve their long-term care facility services and home health agency services for their patient. It would help the hospital to provide more affordable and appropriate insurance plans for their patients to acquire healthcare services easily. It would help the hospital to increase its investment in installing new software-supported programs and mobile apps to provide remote healthcare services to patients. It would help the caregivers to influence the community people to install mobile apps and other software-supported programs to acquire 24*7 hours of medical services to people (Fursova, 2019). It would help the Selfless Hospital to improve the services of community hospitals by giving inpatient and outpatient services, surgery, day care services, diagnostic, primary care and outreach services. It is found in the strategic assignment that it would help the hospital to improve its healthcare services to the local community. It would help the hospital to provide home health services to their patient, including skilled nursing care, physical and mental therapy, occupational therapy, personal healthcare-related services and durable healthcare equipment services to patients. It would improve the efficiency of the overall community and other healthcare services for the state's people.

The strategic assignment concluded that Selfless Health should continue its healthcare services for the public with an affordable pricing range of healthcare services after acquisition. However, acquisition between MMC and selfless hospital would help the hospital to improve their services better than other hospitals to provide more efficient and valuable services to the community and local people. It would help selfless health to install more advanced technology and mobile apps to enhance healthcare services for all.

Aeschbacher, R., &Addor, V. (2018). Institutional effects on nurses’ working conditions: a multi-group comparison of public and private non-profit and for-profit healthcare employers in Switzerland. Human resources for health, 16(1), 1-10. Artiga, S., & Hinton, E. (2019). Beyond health care: the role of social determinants in promoting health and health equity. Health, 20(10), 1-13.

Fursova, Y. (2019). Common Health: The Role of Non-Profit Organizations in Supporting Community Action for Health Equity and Justice.
Goode, J. V., Owen, J., Page, A., & Gatewood, S. (2019). Community-based pharmacy practice innovation and the role of the community-based pharmacist practitioner in the United States. Pharmacy, 7(3), 106.
Hinton, J. B. (2020). Fit for purpose? Clarifying the critical role of profit for sustainability. Journal of political ecology, 27(1), 236-262.
Jeurissen, P. P., Kruse, F. M., Busse, R., Himmelstein, D. U., Mossialos, E., &Woolhandler, S. (2021). For-profit hospitals have thrived because of generous public reimbursement schemes, not greater efficiency: a multi-country case study. International Journal of Health Services, 51(1), 67-89.

Samuelson, K., (2017). The role of hospitals in community and Economic Development. (2017, May 04). Retrieved October 18, 2022, from
Ssennyonjo, A., Namakula, J., Kasyaba, R., Orach, S., Bennett, S., &Ssengooba, F. (2018). Government resource contributions to the private-not-for-profit sector in Uganda: evolution, adaptations and implications for universal health coverage. International journal for equity in health, 17(1), 1-12.
Ssennyonjo, A., Namakula, J., Kasyaba, R., Orach, S., Bennett, S., &Ssengooba, F. (2018). Government resource contributions to the private-not-for-profit sector in Uganda: evolution, adaptations and implications for universal health coverage. International journal for equity in health, 17(1), 1-12.
Stall, N. M., Jones, A., Brown, K. A., Rochon, P. A., & Costa, A. P. (2020). For-profit long-term care homes and the risk of COVID-19 outbreaks and resident deaths. Cmaj, 192(33), E946-E955.
Verulava, T., Jorbenadze, R., &Dangadze, B. (2018). The role of non-profit organizations in healthcare system: World practice and Georgia. Georgian Med News, 274(1), 178-182.
Wang, Y., Kung, L., & Byrd, T. A. (2018). Big data analytics: Understanding its capabilities and potential benefits for healthcare organizations. Technological forecasting and social change, 126, 3-13.
Wiederhold, B. K. (2020). Using social media to our advantage: Alleviating anxiety during a pandemic. Cyberpsychology, Behavior, and Social Networking, 23(4), 197-198.


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