Essay on FinancialEnvironments HCoe

Submitted By helenfayecoe
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Pages: 3

Financial Environment Worksheet
HCS 577
June 16, 2014
Professor Kathryn Mac Lellan
Financial Environment Worksheet

For-Profit
Not-for-Profit
Government
Examples
1. Hospital Corporation of America (HCA) Inc.
2. Tenet Healthcare Corporation
3. Community Health Systems Inc.
1. Mayo Clinic
2. Voluntary Hospitals of America (VHA) Inc.
3. Carilion Clinic Health System
1.Salem Veteran’s Administration Medical Center
2. Indian Health Service
3. Roanoke Public Health Department
Similarities
May be organized as a corporation.

Generates revenues through daily operational services.

Fair and factual reporting of revenues and expenses according the Generally Accepted Accounting Principles (GAAP) required for corporations.

All non-profit entities organized as corporations.

Generates revenues through daily operational services.

Fair and factual reporting of revenues and expenses according the Generally Accepted Accounting Principles (GAAP) required.

Generates revenues through daily operational services.

Fair and factual reporting of revenues and expenses according the Generally Accepted Accounting Principles (GAAP) required.

Has a charitable commitment to targeted population and community, generally serves underserved or indigent population.
Similarities

Has a charitable commitment to community and targeted population and community noted in mission statement.

“External reporting to third parties in health care includes: government entities (Medicare, Medicaid, etc.) and health plan payers…” (Baker & Baker, 2011, pp. 8).

Non-Profits can issue tax-exempt bonds and can accept tax-deductible contributions.

“External reporting to third parties in health care includes: government entities (Medicare, Medicaid, etc.) and health plan payers…” (Baker & Baker, 2011, pp. 8).

Same exemption guidelines as not for profit.

Differences
For-profit hospitals are able to generate funds through issuing stocks.

Financially, “the primary goal of investor-owned corporations is shareholder wealth maximization” (Gapenski, 2008, p. 51).

For-profit entities are subject to property, sales, and income taxation.
Majority of funding from Medicare, Medicaid, and managed care organizations.

Entities distribute profits to shareholders.
Non-profit hospitals do not have to pay property, sales, and income taxes.

Not owned by a particular group, but may have a multitude of stakeholders.

Primary creation incentive was for service to indigent population.

Generally have a charitable mission. Some states “passed a law that requires nonprofits to offer charity care that equals in value their tax exemptions” (Bernert & Swift, 2009, p. 4).

Entities are classified as federal or public.

Business operations follow different regulatory guidelines.

Government entities do not report to shareholders.

“They serve a critical role as teaching institutions, and are often the first choice for trauma care” (Fraze, Elixhauser, Holmquist, & Johann, 2010, p. 1).

Differences
“External reporting to third parties in health care includes: government entities (Medicare, Medicaid, etc.) and health plan payers… proprietary organizations report to stockholders, taxing district hospitals have to report to taxpayers, etc.” (Baker & Baker, 2011, pp. 8).

Organizations may have advanced…