The number of multihospital systems has significantly increased in recent years due to increased life expectancy and limited health budgets. This has made it difficult for multihospital systems to effectively meet the needs of all. Although ethicists provide normative guidance regarding how to fairly allocate scarce medical resources, healthcare professionals still require additional information on what the general public considers to be fair. Essentially, allocation of scarce resources related to the determination of how to equitably and fairly utilize scarce medical resources, particularly in crisis care environments. Increasing demand, rising costs, wasteful spending, as well as limited resources in the hospital industry have made it necessary for multihospital systems to emphasize fair allocation of scarce medical resources. The need for optimum utilization of scarce medical resources has left hospital administrators with no other option other than to constantly try to become as efficient as possible in terms of how they allocate medical resources. The local hospital under Brad’s administration faces the challenge of allocating scarce resources for the benefit of the community it serves.
Types of Hospital Structures
Public Hospitals
Public hospitals refer to healthcare organizations that are owned by governments. They play a critical role in the healthcare safety net. They provide the much needed medical care for patients who may have limited access to care elsewhere. It is important to realize that public hospitals provide medical care for individuals across the United States. However, public hospitals face unique challenges, as they provide care to a significant proportion of patients who are uninsured, have low income, or are covered by Medicaid. Additionally, public hospitals provide a large amount of unreimbursed care. Such a hospital structure has several advantages and disadvantages. One of the advantages of public hospitals is that they cannot turn patients away. They are also a lot more affordable that for-profit hospitals and have more beds. However, these hospitals have poor patient to doctor ratios and patients wait for long before they can receive care.
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Non-Profit Hospitals
Non-profit hospitals refer to hospitals that are mostly funded by religion, charity or educational funds. Such hospitals usually do not pay federal income or state and local property taxes. This is because they benefit community. The nonprofit hospitals serve to provide some areas of healthcare that are often ignored by for-profit healthcare organizations because they do not offer profit opportunities. For instance, for-profit healthcare organizations tend to avoid such health services as trauma care and burn care. Additionally, nonprofit hospitals focus on providing healthcare for small, isolated populations such as those found n some Indian reservations. One of the advantages of non-profit hospitals is that they offer healthcare at lower costs compared to for-profit hospitals. They also utilize innovative approaches in providing care, as they are not bound by a commitment to provide shareholders a return on their investment. However, nonprofit hospitals often have limited funding opportunities, as they are not allowed to obtain capital from investors because they are prohibited from paying dividends.
For-Profit Hospitals
For-profit hospitals refer to healthcare organizations whose primary objective is to generate profits and pay dividends to investors. They have to pay property and income taxes. The taxes cut into their profit margins. The for-profit hospital boards generally maintain a business-driven culture because they are accountable to their shareholders. Such hospitals have the advantage of limitlessly investing their funds in order to raise capital. They are also capable of investing in upgrading their facilities and by costly medical equipment. However, for-profit hospitals are unwilling to give up some of their profits for charitable causes even when it is strongly desired by the community. Another disadvantage is that they provide services at higher prices compared to public or nonprofit hospitals.
Allocation of Scarce Healthcare Resources
The Brad-led hospital was making great profits and it was able to continue running its operations despite its funds being siphoned to finance other entities within the system. In a bid to ensure that other hospitals in the systems continue to run and provide care to communities, the hospital leadership sought to allocate the scarce resources equitably. The for-profit hospital was able to generate profit, given its strategic location in an affluent community ( Pozgar, 201 8 ) . The corporation’s leadership felt that other failing hospitals had to continue providing care to other communities that may not be economically privileged like the community served by the Brad-led hospital. Unlike public and non-profit hospitals, the for-profit hospitals have access to more capital resources. Additionally, for-profit healthcare organizations charge premium prices for their services and they are able to generate more capital. This positions them strategically to acquire the necessary medical resources. For-profit organizations do not serve many people due to their relatively high prices. This means that for-profit healthcare organizations serve a relatively small number of patients who may not necessarily exert pressure on their medical resources in the short run.
The situation would be different for either public or non-profit hospitals. Hospitals are constantly under pressure to ensure equitable distribution of scarce medical resources. More specifically, public and non-profit hospitals lack access to sufficient healthcare resources due to resources constraints. Unlike for-profit healthcare organizations, public and nonprofit hospitals have limited sources of funds, as their budgets are normally constrained. The hospital from which money was siphoned would discontinue operations immediately, resulting in lack of access to medical care for the local community. Therefore, there is need to develop public policy relating to priorities in terms of allocation of scarce medical resources in public hospitals. Healthcare professionals are tasked with the responsibility of allocating the scarce resources most beneficently, as well as in the most equitable and just manner ( Arbab Kash et al., 2014). Full and complete equality in the provision of vital medical services in public hospitals is an ethical imperative ( Rogowski et al., 2014). As such, there is need to create an optimal health system that focuses on providing care equitably and justly. Crippling the operations of one hospital may have negative effects on healthcare access for the communities being served by the affected hospital. Hospital governance can play a significant role in developing policies aimed at reducing cost within the existing systems. For instance, cost-effectiveness can be achieved through educating healthcare professionals to consider the economic impact of their actions, as well as focus on using the most cost-effective strategies both in diagnosis and treatment. Hospitals recognize the need to treat patients with cheaper measures without necessarily reducing the quality of care services. The nonprofit hospitals also face the challenge of allocating scarce medical resources. Essentially, efficiency of resource allocation can be judged based on under-provision of basic, cost-effective services, excess capacity, and overprovision of unnecessary services in healthcare settings. Therefore, nonprofit hospitals have to prioritize medical care services by focusing on vital medical services. It is clear that public and nonprofit hospitals suffer from inadequate resources necessary for providing sufficient medical services to all individuals seeking care.
Brad’s Dilemma
There are significant ethical issues surrounding Brad’s dilemma regarding cash flow to other entities in the corporation. The siphoning of funds from the local hospital to fund other failing hospitals in the system presents a serious ethical issue ( Pozgar, 201 8 ). . The community served by the local hospital may eventually lack access to healthcare services due to cash flows to other entities. It would be unethical to fund the operations of other entities at the expense of the local hospital. The lack of supplies and funds for local capital projects may adversely impact the local community’s access to healthcare. On the other hand, sharing the funds of the local hospital with other failing hospitals in the system can help distribute healthcare services to other communities, leading to equitable distribution of medical care. The fact that the local hospital is located in an affluent community means that the community can afford medical care in other healthcare organizations, unlike for other communities. Thus, Brad’s dilemma presents significant ethical issues that need to be addressed by hospital governance. Basically, hospital governance should help in ensuring equitable and just distribution of medical resources.
References
Rogowski, W. H., Grosse, S. D., Schmidtke, J., & Marckmann, G. (2014). Criteria for fairly allocating scarce health-care resources to genetic tests: which matter most?. European Journal of Human Genetics , 22 (1), 25.
Arbab Kash, B., Spaulding, A., D. Gamm, L., & E. Johnson, C. (2014). Healthcare strategic management and the resource based view. Journal of Strategy and Management , 7 (3), 251-264.
Pozgar, G. D. (201 8 ). Legal and ethical issues for health professionals . Jones & Bartlett Publishers.
