Governance in Non-Profit Healthcare

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Governance in Non-Profit Healthcare

University of Maryland University College

MGMT 640

Executive Summary

Good leadership, financial management, and governance are the essentials for success in any organisation, whether the organisation is a non-profit organisation or a for-profit organisation. In non-profit healthcare the seamless interaction of all the parts makes the organisation successful as a whole. Service provided must be consistent with the goals of the organisation. Agencies and watchdogs have become even more visible seeking accountability and transparency. But how do leaders within the organisation work together to make it a success, how are they governed to achieve the goals of the organisation? In for-profit effective governance is easily recognisable, and achieved. The most important element in an organisation that operates for profit is its balance sheet, great sales and rising stock prices, profits being paid out as dividends, no mention of fraud in the company accounting, these are all excellent indicators of effective governance. In non-profits more so in healthcare, it is terribly difficult to measure or see effective governance. Also, the idea of optimum efficiency may have differing connotations for each stakeholder. Non-profits benefit from the luxury of not having to suffer agency conflicts; nevertheless they must ensure that there are measures in place that ensures transparency. Based on the five (5) overarching strategies suggested by the Sarbanes-Oxley Act of 2002, I will endeavour to prove that the Dimensions Health Corporation utilizes most if not all these strategies.

Table of Contents

Executive Summary...................................................................................................................2

1. Introduction............................................................................................................................4

1.1 Definition of a non-profit healthcare organisation...........................................................4

1.2 Structure of a non-profit healthcare organisation.............................................................4

1.3 Objectives of a non-profit healthcare organisation..........................................................5 2. Purpose.................................................................................................................................5

2.1 Governance in non-profits compared to for-profits..........................................................6

3. Conclusion.............................................................................................................................9

4. References............................................................................................................................10

Introduction

The first non-profit healthcare facility The Pennsylvania Hospital was founded in 1751; because of good governance this facility continues its operation today. Also, a century-and-a-half later, the first health care prepayment/insurance plan—Blue Cross, which was founded as a nonprofit organization by a nonprofit hospital in Texas is still very effective, and efficient. (www.nonprofithealthcare.org)

This paper will take a look at the governance of the financial practices at Dimensions Healthcare Systems. (The dimensions health home page presents a wealth of compelling and factual information on the organisation and its functions [www.dimensionshealth.org]). Even as it focuses on the importance of governance within healthcare, the importance of which cannot be overstated mainly because it is directly related to, and has an effect on human well being. Merriam Webster defines “Governance” as the way a company is controlled by the people who run it. Implicit in this...
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