Explain the significance of 501 (c) (3) status for the hospital. Weigh the advantages and disadvantages of being a non-profit, tax-exempt organization given the context of the scenario.
It is evident that almost half of the American hospitals are tax-exempt and charitable organizations that are allowed not to pay income tax (Susannah, 2016). According to Susannah (2016), this was done to facilitate the provision of better healthcare at an affordable rate to most Americans and to benefit the communities at large. Studies have established that tax-exempt hospitals are worth approximately USD 12 billion and they are permitted to raise USD 5 billion in tax deductible every year. The value of tax-exempt hospitals and charitable organizations is worth more than all corporations and other businesses which are exempted from paying taxes and therefore, the hospitals and charitable organizations benefits a lot from tax exemption than any other institutions. In short the section 501 (c) (3) status allows hospitals to provide better healthcare in the United States. Prior to the act exempting specific hospitals and charitable organizations from paying income tax, tax-exempt hospitals were required to provide charity care and sign obligation as well.
However, section 501 (c) (3) status allows hospitals to raise funds and offer charity care to the communities. The hospitals are also allowed to provide community healthcare for people who cannot afford to pay and therefore, it helps tax-exempt hospitals to achieve the core mandate of hospitals. Lunder and Edward (2015) noted that organizations that are exempted from paying taxes under article 501 (c) (3) are also exempted from paying both state and local taxes and also bulk postage rates which are paid by most profitable organizations. Most hospitals usually apply to be exempted from taxes due to advantages that come with it. Nonprofit organizations which are exempted from paying taxes also enjoy the status of corporate status and therefore, most of them protect the founders and liabilities which associate with the organization (Lunder & Edward, 2015). It is, therefore, gives such an organization power to outsource funds from donors to support certain projects or programs.
Though the vast majority support section 501 (c) (3) due to its support to the hospitals. The critics argue that the standard is very vague and it is difficult to differentiate between tax-exempt and the profit driven hospitals. It makes it difficult for people who are supposed to get healthcare services from tax-exempt hospital to access them. The exemption, therefore, benefits the founders of such hospitals, not the public which it is supposed to benefit first. Non-profit organizations are also difficult and take time to register because it requires a lot of paperwork. As stated by Susannah (2016) since the non-profit organization is a legal entity, it has to comply with federal, state, and local laws so that it can be allowed to operate. Non-profit organizations also do not divide or share profits and therefore, it has no other benefits besides salaries since there are also strict rules in the way its assets are used (Susannah, 2016). Non-profit tax-exempt organizations are put under public scrutiny by different institutions such as Congress to make sure that the right services are provided as required by the law.
- Research and discuss two to three viable options the hospital may have to expand revenue given its status.
Since Sisters Charity Hospital is a tax-exempt hospital under article 501 (c) (3), it is allowed to raise funds to support various programs and projects being undertaken by the hospital. The Sister Charity Hospital is non-profit and by law, it does not share profits and mostly offers healthcare services at a reduced price and support venerable families. And therefore, the hospital can expand its revenue basket through fundraising from donors, running separate business entities, for instance, hotels, and mobilizing financial support from the state and federal government as well. According to Rosenbaum and Ross (2012), tax-exempt organizations are free to raise funds from donors and therefore, Sisters Charity Hospitals can approach various donors to seek financial support which can improve their revenue basket so that they can continue providing healthcare services to low income earners across the country.
The hospital could also mobilize finances from the local, state, and federal government to support programs that directly benefit the community. In most cases, hospitals provide charity care to low income earners and venerable members of society. Through a partnership with local, state, or federal government the Sisters Charity Hospital can get funding for community healthcare programs, treatment of chronic diseases and other healthcare areas where the government has interest to improve. It could also be viable for Sister Charity Hospital to run a project or a business entity that can generate revenue for the organization. This has been done by several charity organizations successfully and therefore, Sister Charity Hospital can employ similar tactics to increase its revenue basket.
- How is the decision to build a Trauma Center related to SCH’s non-profit mission? What are some advantages of building a Trauma Center and expanding Emergency Services? Please list at least five advantages.
Sisters Charity Hospital is a non -profit organization which addresses the need for better medical services in low income neighborhoods and based on the statistic from the hospital it has been providing treatment for several trauma cases. Trauma affects the well-being of a community and since SCH has been receiving several cases, there is a need to construct a trauma to address cases related to trauma. The construction of a trauma center will help the hospital provide better medical service to affected patients. However, the construction of trauma relates to the mission of SCH’s non-profit mission in the sense that the center shall offer trauma treatment at affordable rate compared to other hospitals. The construction of a trauma center will allow Sisters Charity Hospital to provide affordable, competent, and efficient medical services to patients. It will also make sure that the hospital is able to provide accessible emergency medical services to patients suffering from trauma.
Building a trauma center has several advantages and it is evident that Sister Charity Hospital shall improve its service delivery to trauma patients and it will also be able to handle emergency cases without experiencing congestion in the hospital. However, the hospital will increase its revenue since the hospital would be receiving several trauma patients therefore, building a trauma center is more business and it means more money to Sisters Charity Hospital. The hospital is likely to get government subsidies and funds since; the state and federal governments usually finance or provide certain funds to hospitals to offer trauma treatment for a community. A world-class trauma center attracts experienced and skilled surgeons and therefore, Sister Charity Hospital is likely to get more surgeons and increase the number of recruits which will help in improving service delivery to the people.
According to Rosenbaum and Ross (2012), trauma centers can help in building relationships between the community and the institution. The building trauma center is likely to improve the relationship between the SCH and the community and this can make SCH become the proffered hospital for a community and this can increase its revenue (Rosenbaum & Ross, 2012). The fact is hospitals are business entities and the more the patient the more the income therefore, having good relations can help the hospital to improve its revenue. The hospital is also likely to become more attractive to doctors and hence it will receive more trauma patients or cases which will definitely help in generating more revenue for the organization. The construction of a trauma center will also help in fundraising for the hospitals since donors would be interested in supporting activities of the hospital, especially the trauma center. Most importantly, construction of trauma centers is likely to increase surgeon satisfaction and help with surgeon recruitment as well. It is because the surgeons can help in calling for emergency service and surgeons can also bring their patients for treatment. It will also improve overall service and programs which are being offered by the hospitals and this will make Sisters Charity Hospital become one of the best and preferred hospitals located within a community setup.
- What is the basic premise of the EMTALA law? What are the legal and regulatory consequences of failing to comply with the EMTALA? How does complying with the EMTALA affect the quality of patient care?
The Emergency Medical Treatment & Labor Act (EMTALA) was enacted to make sure that everyone has access to emergency medical attention or service regardless of the ability of the person to pay. According to West (2013), the Act was passed to make sure that every American is provided with emergency medical attention. Hospitals are required to provide emergency medical examinations and treatment (West, 2013). The hospitals are required to provide necessary medical treatment to stabilize patients with EMCs. However, if the hospital is unable to stabilize a patient, an immediate transfer should be initiated to make sure that better emergency healthcare is provided to everyone. As stated by West (2013) the requirement of EMTALA is applied to Medicare or health workers working within hospitals and CAHs, with licenses.
The law provides a stiff penalty for any healthcare worker or Medicare who fails to comply with the EMTALA agreement. Hospitals or Medicare provider which fails to comply with EMTALA can be deregistered and therefore, the government can terminate the hospital or physicians’ Medicare provider agreement therefore, it is difficult to find that hospitals are violating EMTALA law. The hospital can also be fined up to USD 50,000 for the violation of the law. In some cases, hospitals can be sued for injury and pain caused due to failure to provide emergency medical attention to an individual (Hyman & Studdert, 2014). And therefore, violating EMTALA can cause both financial and public relation damage to an organization and therefore, hospitals usually comply with the Act. However, inadequate service provisions such as screening are not considered a violation of EMTALA law.
Complying with EMTALA improves the image of a hospital and therefore, it can receive several people seeking medical attention hence increasing the hospital’s revenue. It is because most emergency related causes are paid for by other organizations. According to the American College of Emergency Phtsicians (2018), EMTALA-related medical expenses are paid by American Medical Association (AMA), and insurance companies and therefore, hospital which handle EMTALA cases are likely to benefit from more revenue. It is important to note that complying with EMTALA improve the quality of patient care since Medicare providers take much time to conduct serious examination and screening to make sure that all conditions are properly addressed. It has made Emergency medical care efficient and effective because affected patients or individuals do not take a longer time at the casualty area or emergency room before medical treatment is offered (American College of Emergency Physicians, 2018). It is, therefore, an essential law that has transformed the way emergency services are offered to the public.
- Do you agree with the community? How does the hospital’s “case mix” factor into your decision? Do you believe that SCH could meet community needs with a Trauma Center at a lower level (Level II or III)? Why or why not?
The improvement of ED and adding of a Level 1 trauma center are essential for the provision of efficient Medicare attention to patients and therefore, I agree with the community for putting pressure on SCH to improve its infrastructure. A small Trauma center cannot offer best services to all genders and since it has been registered that the community has experienced several cases of trauma, it would for the benefit of the hospital and the community to improve the Trauma Center so that it can provide treatment to all genders and simultaneously. It is evident that the improvement of trauma center to level 1 will bring several surgeons to the facility or the hospital and therefore, the burden of booking and calling for surgeons to handle various trauma cases would automatically reduce. The SCH cannot meet the need of the community with only a Trauma Center at a lower level. This is because a lower level Trauma center does not attract the best surgeons, since it cannot satisfy the needs of surgeons and therefore, experienced and skilled surgeons would not be willing to station at the facility.
- In order to fulfill the mandate to improve emergency department services and expand its ability to treat more serious emergency trauma victims, SCH has initiated a feasibility study to decide how to respond. The study will explore:
In order to establish a well-functioning Level 1 Trauma Center, a hospital is required to have a commitment to the institution of governing and medical staff so that they can be able to manage and maintain an orthopedic center. The hospital must have enough staffs to handle trauma cases. It is required that a hospital must have physicians who are qualified to handle trauma cases. The hospital is also required to have operational equipment and operating room as well. It is, therefore, important to note that SCH has complied with major requirements to open and operate the Level I Trauma Center. It is necessary for a hospital to have a well-established emergency center to comply with the EMTALA act which can allow it to offer emergency medical services to the public. The SCH emergency center should be large and has well-qualified professional so that it can be able to offer medical services to the public without any delay.
However, for SCH to establish a Level 1 Trauma Center it is necessary for the hospital to construct a facility or a center which shall be used for the treatment of trauma cases. It is also important to employ professional physicians and surgeons so that the required manpower is available so that when the hospital inspection is carried out, the important things which are needed are available. The hospital should also have a well-maintained health system and modern equipment which can facilitate the operation of the Trauma Center. The Trauma Center must have spine Surgeons and Neurosurgeons so that all cases of trauma can be effectively handled by the hospital. It would be best for SCH to pursue these requirements since they are a must before a license is issued for any hospital to offer trauma treatment. It is also because they facilitate the operation of the trauma center and therefore, they will make sure that trauma patients are given the best service. The trauma center must also have its own budget, medical staff, and license must also be issued before the trauma center is allowed to function. And therefore, a license is also needed, certificate of healthcare providers such as physicians, doctors, nurses, and other individuals who shall be involved.
American College of Emergency Physicians. (2018). Emergency Medical Treatment And Labor
Act. https://www.acep.org/news-media-top-banner/emtala/#sm.0001tax8x15pefhnzdx24gq2eyrct , 2-38.
Hyman, D., & Studdert, D. (2014). Emergency Medical Treatment and Labor Act: What Every
Physician Should Know About the Federal Antidumping Law. Journal.publications.chestnet.org , 112-182.
Lunder, E. K., & Edward, C. L. (2015). 501(c)(3) Hospitals and the Community. Prepared for
Members and Committees of Congress , 2-38.
Rosenbaum, S., & Ross, M. (2012). Tax-Exempt Hospitals and the Patient Protection and
Affordable Care Act: Implications for Public Health Policy and Practice. Public Health care , 2-34.
Susannah, C. T. (2016). Tax-Exempt Hospitals and Their Communities. Columbia Journal of
Tax Law , 2-38.
West, J. (2013). Emergency Medical Treatment and Labor Act (EMTALA) Update. Promoting
Patient Safety through EMTALA Compliance , 12-45.