Within AHA are 11 membership groups for specialists in different aspects of

Within aha are 11 membership groups for specialists

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Within AHA are 11 membership groups for specialists in different aspects of healthcare administration, including affiliated societies for human resources professionals in health- care and healthcare marketers. *
N OT - FOR -P ROFIT S TRATEGY Not-for-profit healthcare systems are experiencing improved operating margins, but a gap is growing between the haves and have-nots as a result of increased costs, greater market competition, and the increasing number of people without health insurance. Dr. Dennis McDermott, emeritus associate professor of marketing at the Virginia Commonwealth University School of Business, found that the amount of money not- for-profit hospitals spent on charity care was greater than the amount they received in tax benefits. (To ensure that they meet their charity obligations, the Internal Revenue Service audits not-for-profit hospitals’ levels of charity care.) He also found that the sum of money for-profit hospitals spent on community contributions and taxes combined exceeded not- for-profit hospitals’ spending on charity care by a small amount. He believes that high-cost hospital treatment for low-income patients should be shifted to lower-cost delivery systems (McDermott 2007). Supporting McDermott’s idea, Cinda Becker, former bureau chief of Modern Healthcare magazine’s New York office, believes that, to improve healthcare quality, not- for-profit healthcare organizations should adopt organizational structures and practices normally associated with for-profit organizations, including greater use of information technology (Becker 2007). A case could also be made that not-for-profit hospitals need to improve their financial performance because they do not participate in the stock market (Anonymous 2002). Not-for-profit hospital executives are challenged to link their strategic planning to the current environment to ensure the survival of the organization and, at the same time, ensure that the hospital fulfills its mission (Harrison and Sexton 2004). F OR -P ROFIT S TRATEGY While significantly smaller than the not-for-profit hospital sector, the for-profit hospital in- dustry is rapidly growing in size and market penetration. A focus on new clinical services and an increasing presence in developing communities have prompted this growth. Additionally, many for-profit hospitals are evaluating closing duplicate, unprofitable clinical services as part of the strategic planning process. G OVERNMENT H OSPITAL S TRATEGY While most government hospitals provide care to a predetermined population, they still need to participate in strategic planning to meet the changing needs of their patients and foster an organizational culture that supports change. For example, the Veterans Admin- istration operates 153 medical centers and numerous clinics that provide comprehensive care to 5.5 million veterans annually. Recognizing that the Sunbelt states are experiencing a growing veteran and retired military population, the Veterans Health Administration has C h a p t e r 2 : M i s s i o n , V i s i o n , a n d C u l t u r e 5 1

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