Posted: September 20th, 2022

Explain how and why healthcare organizations are different from other for-profit and nonprofit organizations.

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Explain how and why healthcare organizations are different from other for-profit and nonprofit organizations. Then, expound upon how those differences might influence managerial decisions. First, let’s establish that healthcare is a business. “Nonprofit” does not mean “not a business.” Has these characteristics of a business: Formal organization Engaged in business functions: accounting, finance, production, sales & marketing, R&D Profit motive (in the case of private HC orgs) or excess revenue motive (in the case of nonprofit orgs) Low degree of consumerism, Producer/buyer interactions are heavily mediated, Third-party payers both moral hazard and roadblock, For-profit Nonprofit Governmental Governmental regulation (CON+), Nonprofits dominate the industry Power of professionals, Lack of price transparency, Asymmetric information, Local markets, Jargon-laden field, Life or death decisions may be involved, Uninsured and under-insured patients who must be taken care of due to EMTALA, Induced demand through marketing, Moral hazards from insurance.

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