MHC 6305 Equity and Financing and Securities My questions is When given the fina

Question

MHC 6305 Equity and Financing and Securities My questions is When given the financial and operational burdens of healthcare organizations large or small why would an healthcare organization manager change from their form of business entity from private non profit to public for profit? MHC 6305 Equity and Financing and Securities My questions is When given the financial and operational burdens of healthcare organizations large or small why would an healthcare organization manager change from their form of business entity from private non profit to public for profit?

Explanation / Answer

Generally, a manager of an healthcare organisation would choose to move from a private non profit to public for profit because of the following reasons:-

1) Once a healthcare organization goes public, it can bring its public issuse and can receive more capital.

2) Non-profit organization has to function as per the regulatory requirements and there are eyes of SEC and other audit committes on the functioning of non-profit organization.

3) Although for profits are taxed, they have a lot less burden from the regulators than the non-profit entity.

4) For-profits are also more responsive to changes in service profitability than the non-profit entity.

5) For-profits may distribute accounting profits to shareholders, nonprofit hospitals enjoy income and property tax exemptions.

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