The modern world has developed extensively especially in terms of technological development and organizational structures. With this in mind, there are improvements in the way services are delivered to clients. As a result, any organization that has endeavors of succeeding in the corporate world need to formulate certain strategies, without which it would be destined to failing in its activities. One of the challenges that healthcare organizations continue to face on a daily basis is whether they are to approach the market as for-profit organizations or non-profit organizations. This essay will therefore look at the characteristics of each type of organization by examining a research article that provides critical information on for-profit and not for-profit organizations. One of these research articles is ‘Modeling Internal Decision Making Process: An Explanation of Conflicting Empirical Results on Behavior of Nonprofit and For-Profit Hospitals’ by Kathleen Carroll and Jane Ruseski (Carroll & Ruseski, 2009).
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To begin with, for-profit healthcare facilities or organizations can be described as those organizations that have embraced a business mind in their approach in providing healthcare services. In line with, these organizations are geared towards getting profits for the services that are delivered to patients as opposed to delivering their services and later on getting their profits. In addition to this, the prices for services that these organizations provide to their clients are set in such a way that they are able to obtain their own profits. Following these arguments, for-profit healthcare organizations are more common among areas where there are affluent clients. Therefore, most of the income of for-profit healthcare organizations emanates from the profits they generate from their clients. Similarly, these organizations have refined administrative structures that enable them to meet their targets in the market. With this in mind, most of their employees are employed due to their qualification (Carroll & Ruseski, 2009).
There are various factors that impact the operations of for-profit organizations in the society. To begin with, the ability to raise finances that would enable them to provide quality services to their clients remains as one of the leading issues. Similarly, the formulation of appropriate administrative structures is also another factor that affects the operation of these organizations in the healthcare sector (Devereaux et al., 2004).
For-profit healthcare organizations have been criticized for their lack of patient interest. Instead, these organizations have focused more on getting profits by looking at the capability of patients to meet their medical costs irrespective of the patient health conditions. With this in mind, these organizations have more than often failed to attend to patients, even those in critical condition for fear that these patients cannot be able to foot their medical bills (Devereaux et al., 2004).
On the other hand, non-profit healthcare organizations are stooped towards providing their services to clients without necessarily focusing on the ability of these clients to pay for these services. This is as a result of the fact that these organizations have been formed to serve the community as opposed to getting profits from the community they are supposed to be serving. It has also been argued that most their income results from government support and tax exemptions. Additionally, it has been argued that they have a tendency of charging their affluent customers more in order to cover up the costs that could have been paid by their poor clients (Carroll & Ruseski, 2009).
There are various factors that have been found to affect the way non-profit organizations function in the society. To begin with, the issue of governance is one of the critical issues that affect directly the way these organizations function in the society. It is important for one to understand that non-profit organizations face a lot of challenges on a daily basis as opposed to for-profit organizations in the society. Some of these challenges include competition from for-profit organizations, transparency, the ever changing technology, etc (Viacava et al., 2005).
There are various options that have been proposed in order to improve the financial and operation performance of non-profit healthcare organization. To begin with, provision of an appropriate governance structure has been found as one of the most appropriate strategy that can be used to improve the financial and operations performance of these organizations. In reference to Viacava et al. (2005), poor governance is one of the major contributors of financial troubles and other problems within a particular healthcare system. With this in place, these organization would in a position to follow proper management practices that would assist them to deal with different challenges that arise on a daily basis.
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