As advance in medical and treatment increase
As advance in medical and treatment increase, the cost of healthcare also increases. In recent years, people have become more and more interested in obtaining health coverage for themselves and their families. Furthermore, health insurance was established to help individuals and families pay for the cost of healthcare goods and services. Additionally, it helps ensure that individuals and families are still financially secure in the event of an unexpected disease, illness, or injury which may be expensive ( Healthcare Inc., 2015). Additionally, those who have access to health insurance are more likely to have access to preventative care and treatment.
Furthermore, health insurance is essential because one cannot predict how much their medical bills will add up to. Because the cost of healthcare tends to fluctuate, your medical bills may also vary. In those years or months where medical expenses are high, healthcare coverage will assist in mainstreaming an individual’s finances. Individuals should obtain healthcare coverage before they or their family members become ill. There is a relationship between having healthcare coverage and receiving better care and treatment. Research proves that individuals who have healthcare coverage are more likely to have a regular primary care physician and have little to no problems receiving the care they need when they need it (Urban Institute, 2007).
Nonetheless, healthcare insurance provides a wide range of benefits for consumers. Additionally, those individuals who lack coverage, tend to be sicker than those that do. Also they are less likely to receive care and treatment on a regular basis, this often times limits their ability to identify disease and illness as well as limits their prevention options (American Heart Association, 2016). Most individuals who do not have access to healthcare coverage tend to rely on methods such as ” home remedies” and other invasive forms of medical care. Using these types of techniques often do not help the individual detect, maintain, or cure their ailment. Thus causing more physical harm than good to an individual. Obviously this causes and effect on the person, but their family and friends can also suffer if their illness or disease goes unchecked. It is critical for individuals to understand the importance of healthcare coverage.
This report will outline if it is in the best interest of 20 doctors to open a new medical group. The facility will be within 30 miles of a downtown center of a city. This particular city has a population of roughly 500,000 people. The doctors are hoping to spend around 100 million dollars on this expenditure. The report will also describe the population and demographics for this purchase. Furthermore, this report will describe which ownership type is right for this type of organization. Lastly, it will cover the financial, legal, and alternative healthcare models which can be used in this type of purchase.
Population and Demographics
The population for this expenditure is 500,000. Those living in this area are middle class Americans. This means that a large number of this population is working and may have health care coverage. Additionally, the downtown center of the city is close to a number of businesses, which can be used as an advertising opportunity for the new organization. Additionally, there are limited numbers of healthcare entities in this area, which means that there is little to no competition for the organization. Which means that the organization has the opportunity to be the leading medical group in this particular area. Also, there would be an opportunity to create a lasting impression on this community.
There are a variety of ownership types that healthcare providers and organizations can use to help them determine how their organization will operate. However, there are four main ownership types utilized in the United States healthcare industry. The most common type of ownership is sole proprietorship. Furthermore, with this type of ownership the organizations owners just have to register their name to secure a local license, and then they are ready for business. Additionally, an organization that operates as a sole proprietor is typically owned by one individual. Another type of ownership is a Limited Liability Company (LLC). An LLC can have one or multiple members depending on the size of the organization. Additionally, the LLC must file with the state and have what is called Articles of Formation (Nitham, 2015). Organizations can also file ownership as a C corporation, which is taxed separately from its owners. Generally, most for-profit businesses are categorized as a C corporation. Lastly, an organization can also be an S corporations which in many instances has been described as a pass-through entity for taxes. This type of corporation pass income, debt, deductions, and credit through its shareholders (Pomerleau, 2015).
In this case, these 20 doctors may want to look at a limited liability corporation (LLC). The main reasoning behind this decision is that this type organization can have multiple owners, and in this case 20 different doctors would be the owners of this new healthcare organization. Additionally, if the new organization was to operate under a LLC owners would incur debt and loss separate from their personal finances. For example, if the organization were to be sued the owners personal assets ( i.e., property, bank accounts, etc.) are protected. Moreover, the 20 doctors would elude tax at a organizational level. Establishing an limited liability company would help a new organization create credibility among consumers, employees, and even vendors. Additionally, an LLC corporation can also help this organization establish partners or financial supports. In conclusion, if the owners of this organization were to go the route of limited liability corporation they would incur fewer annual requirements from the state.
The expenditure is set to cost 100 million dollars. When opening a new organization there are a variety of topics that need to be considered. These topics include funding, which relates to how the organization will obtain the funds for day-to-day operations. For instance, will the organization chose to participate in a governmentally funded program, or will the owners pull together funds to finance the organization. Within the first months organizations may lose more money than they put in. Meaning that the organization may need to give itself a few months or even year (s) to break-even. The beginning stages of opening an organization can be the hardest. Furthermore, the organization may also want to decide what goods and services will be offered by the organization (World Health Organization, 2014). For instance, would the organization be providing preventative services, or would it be looking into providing speciality services. Also, the organization may also want to determine what type of insurance options it would like to accept. Additionally, the organization may want to determine how it will purchase the necessary equipment and supplies. Will they lease or buy the equipment or supplies needed for day-to-day operations. Additionally, the organization may want to determine what pharmaceutical companies they want to partner with.
When opening a new organization it is essential to have a plan. The plan should outline key topics to organizational success. The topics should range from finances to services and goods. When an organizations successfully plans for its opening it ensures that they will be able to run properly. In other words, this could be the difference between success and failure. Therefore, the organization may want to ensure proper strategic and financial planning.
When opening a healthcare organization the law is extremely important. Therefore, it is essential for healthcare organizations to make sure that they are following local, federal, and state laws. Because these laws were developed to protect patients and organizations alike. Organizations must ensure that they are in compliance with laws such as the Health Insurance Portability and Accountability Act (HIPAA). This particular section of healthcare law ensures that patient health information is protected. Additionally, it outlines the importance and standards that healthcare organizations must follow to ensure the privacy of patient health information. Also, organizations must make sure that they are in compliance with the Patient Protection and Affordable Care Act, also known as the Affordable Care Act. This particular law outlines the importance of healthcare coverage, and offers insurance options for the American people.
Alternative Healthcare Models
There are a variety of alternative healthcare models. For instance Accountable Care Organizations ( ACOs), which are based around the coordination of care. This means that all those involved in patient care to communicate and share records with one another to provide comprehensive and complete patient records and care plans. The goal of coordinated care is to improve costs and savings through improving health outcomes and provide safe and effective care promptly. These organizations came about after the Affordable Care Act and were created to decrease the cost of care and treatment for Medicare and Medicaid patients.
Furthermore, to receive reimbursement from Medicare and Medicaid, accountable care organizations must accept 5,000 or more Medicare patients. Accountable care organization have expanded in recent years, particularly with the addition of patients who are not insured by Medicare. Furthermore, ACOs provide care for roughly 2 million Medicare and Medicaid patients and approximately 15 million patients who are not protected by Medicare and Medicaid. According to research, shows that about 14% of the nation’s population is receiving care through an accountable care organization, and the number will grow in recent years ( World Health Organization, 2014).. Additionally, these types of organizations receive financial support from the government if they keep their cost low, they must also meet specific criteria to achieve cost savings from the Medicare and Medicaid programs.
Additionally, those organizations which are classified as accountable care organizations may also participate in the Bundled Payments for Care Improvement Initiative (BPCI) which is creating an alternative way of compensating healthcare entities. Bundled payments pertain to reimbursements for episodes of care. In years to come, the bundled payment method may be the payment method for all accountable care organizations. Those that are classified as accountable care organizations and participants in the BPCI program will be monitoring and evaluating patients who are using healthcare data to assess their health outcomes.
Another alternative healthcare model is the patient-centered medical home (PCMH). In many ways, these organizations are similar to accountable care organizations because they are built on physician networks, sharing medical records, and coordinating patient care. Instead of emergency care or hospital treatment, these organizations are centered on primary and preventative care providers who have discovered ways to contract with other organizations for services. The PCMH model may be useful because they help to foster a productive relationship between patients and their providers ( World Health Organization, 2014). .This type of organizations is based on small or independently owned medical practices.
In conclusion, it would be in the best interest of 20 doctors to open a healthcare organization with 30 miles of the downtown city. One plus is that there is a population of approximately 500,000 people. Additionally, there is little to no competition for a new healthcare organization in this area. Which means that this new organization has the opportunity to be the leading provider of care in this area. Ownership is also important for this organization because it is new and there are 20 different organizations who are looking to participate in the development of this organization. A limited liability corporation would be best for this type of organization. Due to the number of participants it its establishment and the fact that it protects the owners from incurring debt or loss related to the organization.
Also it would be beneficial for the organization to determine what type of services it wishes to offer, as well as how it will obtain funding for its day-to-day operations. The organization may also want to determine how it will obtain equipment and supplies for the organization. Will it lease or buy the equipment, or will it partner with vendors. Additionally, the organization may also want to determine what type of insurance will be accepted at this organization. Also, will the organization be apart of a government program. Such as an accountable care organizations, or a patient-centered medical home.