Question.3291 - You are currently working at a large academic medical center in an urban community. For the last several weeks, you have heard that other health care organizations are looking to build within a 10-mile radius of your organization. Your CEO has asked you to research the other organizations and how their services are similar to and different from what you currently offer.Discuss the following questions: What are some business and financial implications of the differences between community not-for-profit hospitals and large academic medical centers that may affect staffing, programs offered, and policies and procedures? What financial impacts could result if a for-profit organization was built within your community? What are some of the financial benefits of being an academic facility rather than a not-for-profit facility?
Answer Below:
Large academic medical centers and community not-for-profit hospitals have very different economic and financial structures, which can affect staffing, services offered, and rules and procedures. Community not-for-profit hospitals operate on tight budgets mostly supported by donations, government grants, and patient money. They frequently concentrate on offering basic healthcare services suited to the local community's requirements. Compared to university medical facilities, this funding structure usually concentrates on vital services and cost-effective care, with staffing being less specialized. On the other hand, large academic medical centers receive funds from linked institutions, grants for research, and patient care, among other sources of income. These days, academic health centers, or AHCs, are important players in the creation, application, and assessment of medical technology; in advising other organizations engaged in medical innovation; and in training future and present practitioners(Anderson et al., 1994). These facilities require a varied and highly skilled workforce because they can provide a greater range of specialized programs, state-of-the-art research, and advanced medical training. Academic medical facilities have twin missions of patient care, education, and research, reflected in their policies and procedures. This leads to stricter criteria for innovation and compliance. A for-profit company joining the community could have a big financial impact. Profitability and efficiency are given first priority in for-profit hospitals, which frequently results in aggressive marketing tactics and may even tempt patients away from academic and non-profit facilities by providing specialized services or competitive pricing. This change may lead to lower patient numbers and income for already-existing hospitals, requiring them to modify their financial strategies such as by implementing cost-cutting measures or looking for new sources of income. There are various financial advantages to being an academic facility instead of a not-for-profit establishment. Government grants and private research funds are two major sources of money that academic medical centers frequently get. These monies can support various research projects and clinical trials, stimulating innovation and drawing in top medical expertise. University affiliations can also offer access to a wider range of resources, including money for infrastructure development instructional programs, and financial stability. The charitable backing and fundraising abilities bolstered by their prominence might further strengthen academic centers' financial position. These benefits improve academic medical institutions' overall financial health by allowing them to provide state-of-the-art care and draw patients looking for specialized attention. Anderson, G., Steinberg, E., & Heyssel, R. (1994). The pivotal role of the academic health center. Health Affairs, 13(3), 146-158.More Articles From Operation Management
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