LP5.3 Assignment: Economic Credentialing Complete the Problem beginning on page
ID: 367529 • Letter: L
Question
LP5.3 Assignment: Economic Credentialing Complete the Problem beginning on page 463 of your text titled “Problem: Economic Credentialing” in a one to two page paper. Submit the completed assignment to your instructor. See page 369 for a general description of Marcus Welby Hospital. You are the lawyer for Marcus Welby Community Hospital. The administrator approaches you about how to amend the bylaws so that the hospital can get rid of doctors who are costing the hospital too much money under Medicare and HMO insurance. The administrator is concerned about which removal actions can be defended in court and which bylaw amendments are politically feasible with physicians. Advise the administrator on each of these options: • Amend the Hospital Bylaws to give the hospital board authority to remove doctors from the medical staff for any reason, regardless of the medical staff's own recommendations, as long as the medical staff is first consulted. • Amend the Medical Staff Bylaws to declare that an additional criterion for medical staff membership is to practice an efficient style of medicine that avoids wasting medical resources or providing unnecessary care. • Forget about amending any bylaws. Instead, go after physicians who are economic losers based on their general medical competence and their unwillingness to be cooperative. • Keep but supplant the entire medical staff structure by limiting who can practice in each department through one-year renewable contracts with the 200 best doctors out of the present 300. Note that the assignment asks you to comment on each of the options, not just one. You may comment on one option being better than another for some reason, but be sure to comment on all the options. Support your advice with material from the text. Submit this assignment to your instructor via the dropbox “LP5.3 Assignment: Economic Credentialing.” This assignment is worth 30 points.
Explanation / Answer
Solution:-
Advantages of non proft HMOs are as follows
They are tax exempt.
They offer better care and quality of service than a for-profit HMO. Their income and assets are supposed to be used for only charitable purposes. They have a voluntary board of trustees who have no claim on the assets of the organization. Hence they are known to contribute to the society in a greater degree.
They have a greater ability to raise capital since they have the support of various organizations which lends them higher credibility in the market.
However Non profit HMOs have a lower operational flexibility.
For-profit organizations have higher flexibility in operating with joint ventures. This is because they are not subject to the private inurement and private benefit rules. They have greater operational flexibility as compared to nonprofit HMOs. They are also more attractive to third party suitors which enables them to command increased market prices in the transactions. They function more efficiently. However, their income is taxable and theie efforts are directed at profit making and increasing shareholder wealth due to which the quality of service provided by them is lower.
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