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1.

Describe the external and internal factors that influence the executive teams decision making

and specify which might be most instrumental in making the decision to become a for-profit entity. Why do you think so? External factors that would influence an executive team would be what neighborhood is this hospital going to operate in? Is this neighborhood made up of people who mainly have insurance or is the individuals heavily dependent on governmental programs. Internal factor decision making would have to rely on the factors of the shareholders and what are their expectation for compensation. Therefore, most accounting for the hospital would have some profits funneled back to the shareholders. In turn, the hospital can pick and choose which services to offer by which services are going to provide the most profits. Other factor for the executive team is to find out what is important to the hospital because for-profits may distribute accounting profits to shareholders, whereas government and nonprofit hospitals enjoy income and property tax exemptions (Horwitz, 2005). The executive team also must examine the goals for the hospital and evaluate how ownership affects the central activity of hospitals: medical care provision (Horwitz, 2005). Also in decision-making organizations have to look at the advantages and disadvantages of non-profit vs. profit. The disadvantages of non-profit organizations are: loss of control, compliance paperwork and limited functions. Non-profits loss the control of their organizations because the organization is no longer owned by its founders (Score, 2002). When a for-profit organization decides to sell off assets and move on they can do so without any laws standing in their way. However, with a non-profit organization, the organization belongs to
the public at large. If it dissolves, its assets must be given to another nonprofit organization with a purpose similar to yours. If its assets are misapplied or used for private benefit by the officers, they can be seized (Score, 2002). The second disadvantage is the amount of paperwork the non-profit organization will have to endure under the law. Moreover, there are deadlines for virtually every filing. Keeping ahead of the paperwork wave requires discipline, commitment and a sense of humor. Nonprofits are also limited which means the organization can only perform certain functions listed under the law. Some of the advantages of non-profit organizations are: limited liability, tax exemptions and zoning freedom. Limited liability is something that would be important for a hospital due to the nature of the service the organization provides. In 1924, the United States supreme court decided that for the purposes of tax exempt status, the destination of the funds, rather than the source, was the key determinant. So if the funds you received were used (again) for the good of society, you could be exempted. If you qualify as a 501(c)3, this eliminates your federal and state income taxes, sales and use tax. Many non profits do not pay property taxes on real estate they own (Score, 2002). Moreover, under non-profits the organization has zoning freedom meaning the organization can go into any neighborhood without being turned down due to zoning issues. My thought process behind being an

for-profit organization would have to solely be decided by what is necessary for my staff. Moreover, do we want to be limited in or services or how we service our patients. Do we want to have freedom to make our own decisions regarding insurance and cost? http://content.healthaffairs.org/content/24/3/790.full

Score. 2002. For Profit versus Non-Profit. Retrieved on 7/19/2011 from http://www.scoreknox.org/library/versus.htm

2. Data needs to be collected in order to make informed decisions. Create an overview of the marketing data that needs to be collected and how you collect it. Data collection is classified into three catagories. The catagories are: observational, experimental and survey research. In oberservational research consumers are either observed by another individual or through a mechanical device such as a camera (Berkowitz, 2011). Observational data can be obtained by video cameras used to scan peoples eye movement in order to, analyze what the consumer likes and dislikes. Organizations can also hire on mystery shoppers or observers to observe the admissions process of a hospital. Moreover, the observer will choose a particular patient and monitor and track the visit to the hospital from admission to discharge. The second data collection method is carry out through experimental research. Experimental research is where factors are manipulated to determine a causal relationship (Berkowitz, 2011). The advantage of experimental research is that it can measure the actual effects of one variable, such as the effect that the size of an advertisement has on message retention (Berkowitz, 2011). The only problem with experimental research is that it is real hard to measure the outcomes in the real world therefore, this type of marketing is rarely used in healthcare marketing. The last data collection method is survey research. In survey research data is collection in a multitude of ways through telephone interviews, personal interviews, focus groups and mail surveys.