Assignment Task

Summarizing For-Profit Healthcare Organizations

As a general rule, the primary goal of most for-profit businesses is to generate profits that can either be delivered to the company`s investors or reinvested back into the company for future benefits (Cleverley, 2017). For-profit administration must constantly balance their legal duties to the company`s owners with their duty to deliver a particular standard of healthcare services to the community they serve (Cleverley, 2017). There are many organizational and ownership forms within for-profit businesses. Publicly traded companies are for-profit businesses that deal in shares of their stock on the free market. Being publicly traded has many benefits, including the ability to raise equity by selling business stock (Cleverley, 2017). However, the Securities and Exchange Commission (SEC) imposes reporting obligations and regulates all publicly traded companies. Tax status is another major difference in for-profit healthcare services, significantly impacting finances and, consequently, the services offered (Writer, 2018).

For-profit businesses may also be privately owned, meaning that only a small number of investors own the company`s stock, which is not available to the general public. Additionally, privately held businesses have fewer SEC reporting obligations (Cleverley, 2017). This typically applies to smaller corporations since larger for-profit firms are often publicly traded. Whether publicly listed or privately held, for-profit businesses are frequently referred to as "stakeholder" businesses (Cleverley, 2017). For-profit hospital boards continue to foster a corporate environment, as they must constantly answer to their shareholders (Price, 2019). Consequently, some hospitals refuse to allocate a portion of their income for nonprofit causes, even when it is critical or requested by community members. Shareholders of large for-profit organizations often do not share the same values or concerns as locals (Price, 2019). Instead of retaining outside experts, for-profit firms that operate numerous hospitals can employ their own personnel, including in-house legal representation and expert consultants. Another advantage for large firms is the ability to educate the hospitals within their organization about best practices (Price, 2019).

A limited liability company (LLC) combines liability protection offered by a corporation with the tax benefits of a partnership. LLCs are also known as Limited Liability Partnerships (LLP) (Cleverley, 2017). The general partner`s responsibility is limited under an LLC. Provided the company`s tax distribution rules are followed, LLCs are versatile, allowing owners to allocate income and losses as they see fit (Cleverley, 2017). Compass Health, founded by Mark Cullen in Crowley, Louisiana, in 2005, is an example of an LLC. Compass Health provides comprehensive psychiatric health treatments to adults and seniors in Louisiana. Highly educated professionals oversee individualized treatment plans that incorporate psychotherapy and medication management to promote healing and wellness (Psychiatric, 2021). Compass Health operates 10 inpatient locations, 5 outpatient clinics, 12 day programs, and 11 hospital partnerships throughout Louisiana.