Health Care Organizations (HCOs) utilizes various forms of other business organizations to maximize its outcome. There are four major types of business organizations that the HCO utilizes; proprietorship, partnership, corporations, and hybrid forms. The following sections will describe the each of those four forms in terms of their advantages and disadvantages associated with HCO. A proprietorship is also known as sole-proprietorship is a business which is owned by a single individual. Although the proprietorship is easy to get into, in most of the state, even the smallest business in HCO needs to be registered and licensed by the state. This form of organization is easy to form with limited resources and is subject to few governmental regulations …show more content…
and pays no corporate taxes. The income of the business is treated as the personal income of the proprietor. The reason that this form of organization pays less tax than taxable corporations is that the corporate profit are taxed twice; both at corporate level and personal level. Partnership is a form of organization where two or more organization comes together to form a non-incorporated business.
This form of business is similar to proprietorship in terms of formations of the business. Earnings are treated as the personal income among the partners regardless the money was taken out of the business or retained in the business. However, there are three important limitations in these two (proprietorship and partnership) business have. a. Difficult to sell or transfer their interest in the business b. Unlimited liability- risk of bankruptcy in proprietorship, and obligations for partners to cover the liability in partnership c. Limited life of the business According to the text book, a corporation is a legal entity which separates the distinctions between owners and managers. A corporation has three main advantages: a. Unlimited life- unlike partnership and proprietorship, the life of the organization does not depends on the life of the owner who started it. b. Easy transfer of ownership- since the ownership in corporation is divided into shares of stock, the transfer of ownership is easy as it can be sold easily. c. Limited liability- as the ownership is scattered all over, it is difficult to acquire resources compare to …show more content…
proprietorship. The corporate form of organization also has some disadvantages. As mentioned in the text, corporate organizations are subject to double tax- one in the corporate level and one the personal level. This double taxation gives edge to proprietorship and partnership form of business as the earnings in those two forms are treated as personal earning and subject to income tax, rather than corporate tax. Another important disadvantage of corporate form of business is that it is hard to form a corporation because of the cost of the formations and other reporting regulations. It is also very time and resources consuming than proprietary/partnership forms. The forth forms of business is the hybrid form.
This hybrid form is different than the three traditional form of business. Some of the specialized types of partnerships have characteristics different that the standard form of partnership. In case of Limited Partnership (LP), general partners have unlimited liability, whereas limited partnership are only liable for the amount that they invested. The LP has no control on the business. In the case of Limited Liability Partnership (LLP), the partners have the joint liability for all actions of the partnership. Despite of this, all partners have limited liability regarding the professional malpractice. This is because an individual is only liable for his/her own malpractice, not of other partners. Limited Liability Company (LLC) is a hybrid form of business, which has characteristics of partnership and corporations. The members (owners) are taxed as if they were partners. This is a complex form of organization, hence setting up can be both time and resources consuming. The Professional corporation (PC) (called professional association (PA)), is unique form of business common among the physicians and healthcare professionals. In this form of business, owners have benefits of incorporation, and are liable for malpractice. This form of business are often used by private clinicians. PC has very tight restrictions so at least one member needs to be
licensed.
Partnership – “A legal entity formed by two or more co-owners to operate a business for profit.” (Longenecker, Petty, Palich, Hoy, Pg. 202) In a partnership, the advantage for the owners is the capability to reduce the workload and the financial burden, especially if each partner has management skills that enhances the business. The disadvantages of a partnership such as personal conflicts and leadership expectations, therefore this organizational form should only be chosen once all other options have been considered.
A corporate owner is an Individual or entity who owns a business entity to profit from the successful operations of the company. Generally, has decision making abilities and first right to
The current focus on new healthcare models is a reaction to long-standing concerns around quality, cost, and efficiency. Accountable Care Organizations model focus on integrated healthcare to promote accountability and improve outcomes for the health of a defined population. The goal of integrated healthcare is to ensure that patients, especially the chronically ill, get the right care at the right time, while avoiding unnecessary duplication of services and preventing medical errors (CMS, 2014). The following paper will analyze an ACO’s ability to change healthcare in the United States.
The corporation’s business is carried out by its management, under the direction of the Board of Directors. The Board, and each committee of the Board, has complete access to management. Also, the Board and committee member’s has access to independent advisors as each considers necessary or appropriate. Mallor, Barnes, Bowers, & Langvardt (2010) state that the Board of Directors also, issues shares, Adopts articles of merger or sha...
members’ ability to share the burden of being “on call” to cover patients during non business
Based on the facts in case study three, a limited liability company, LLC is the recommended business entity for Arcadia Sports. The justification for this choice is that Jeb has the resources to start the business and Josh has the expertise to run the day to day operations. Jeb has no desire to be involved in the day to day operations of Arcadia Sports. Also, the two have decided to split the profits. Forming a LLC will protect Jeb from any liabilities that arise during the operating of Arcadia Sports and allow him to enjoy equal profits. Members of a LLC are not personally liable to third parties for debts, obligations and liabilities beyond their capital contribution (Cheeseman, 2015).
Through this organization hospitals and small group practices can be provided with better reimbursements, efficient claim management and better delivery of care by negotiating with the payors and obtaining better health plan contracts. PHOs serve a messenger role between the providers and payors by submitting the fee schedules to the network physicians and enabling efforts to have contracting terms between the providers and payors. Traditionally, the contracts were between the hospitals and payors or small group practices and payors with PHOs as a third party or messenger, but with the emerging trend of clinical integration between the physicians and hospitals PHO enables both the parties involved in the contact agreement which provides better bargaining leverage in negotiation as the collaboration will lead to controlling hospital costs and improving the quality. With the current Medicare and Medicaid payment models involving bundled payments, global payments and episode based payments along with clinical integration between the physicians and hospitals, this Physician – hospital organization arrangement reduces the adversarial or confrontational risk involved by making contracts less complex and reducing the costs by greater cohesion and cooperation between the both parties compared to traditional PHO independent contractual agreements with the insurance companies and payors. Most important concern with the PHO service model is the potential of antitrust liability in the establishing fee schedule and contracting as price fixing arrangements in between the competitors is considered offensive and with the clinical integration between the physicians and hospitals can resolve such issue. Under these arrangements, ownership and governance of the PHO is given emphasis enabling that both the
A sole proprietor is an individual carrying on business alone without having registered a single member company. Unlike companies, there are fewer controls on the setting up of sole proprietorships and they usually governed by the general law of contract. A sole proprietor unlike other business forms, can use business funds in any manner due to their high level of autonomy. It is an adequate structure for a single person with capital but not for large-scale investment.
What is the broader implication of managed care for health care services is how healthcare providers control health care cost and quality care. With all the competition to pick from and the rising cost of health care the consumers’ needs to look at all options available. The keys to manage care are the types of organizations and insurance options that include health (HMO’s) maintenance organizations, provider organizations PPO’ and POSS. The health insurance industry is big on wellness and prevention as part of managed care.
There are many different types of business structures, but if you own and operate a business that it is a sole
Health care sector generally has three types of hospitals like not for profit, for profit and hospitals run by governments. Not for profit organizations typically are the largest groups and are those organizations which are ran for public benefits and does not look for any profit. They charge very minimum and most are free of charge. "They are service oriented and try to give best treatment for those who cannot afford it. These hospitals are owned by nonprofit corporations that specialize in managing hospitals and health systems" (Williams & Torrens, 2008).
most sole proprietorships operate on a small scale, the main factor that distinguishes a sole proprietorship is the sole responsibility of ownership and decisions.
The definition of a sole proprietorship is essentially a business that is run by one person and owned by that person as well. Specifically, a sole proprietorship is separated from the other business entities because of the specific the legal dynamics between the business and the owner of the business. Moreover, because of this factor, sole proprietorships are usually easy to both form, maintain as well as dissolve if need be. In a New York Times article, the authors expressed that small businesses are typically sole proprietorships and as such, this is why it was selected as the business entity (1). Furthermore, the aforementioned reasons allowed for a rather rapid decision on the basis that with this entity, there is an ability of the owner to run it how they see fit.
Shareholders have right to vote (usually one vote per share owned) on matter such as election of Directors , Fundamental Transactions , Proxy Rules etc.; sell their share at any times to generate profit as well as the right to share in distributions of the company's income, the right to purchase new shares issued by the company, and the right to a company's assets during a liquidation of the company .
A sole trader is the person who run own business as self-employed, who keep all business profits after they have paid tax on them. This doesn’t mean you have to work alone, you can employ staff but you will be responsible for any business losses or makes. One advantages having this type of business it’s easy to set up and maintain the business. Another advantages you own all business profits and assets. Also you over control the management and direction of your business. Disadvantages of this business as self-employed often find it difficult to raise finance to find of the business. Another disadvantages may be limited amount of time stay away from the business less holidays. Nearly the same, if sole trader become sick or have an accident the business may stop operating. Also you will need to put money aside to pay tax; otherwise, you might have cash flow problems at tax time (Government,