Working for a large academic medical center in an urban community has its advantages.
However, with the great deal of competition in the area, there are many implications that
could impact the medical center. It has been rumored that there will be other health care
organizations that are looking to build within a 10-mile radius of our organization.
Business and Financial Implications:
Community (nonfederal) not-for-profit hospitals are most of the hospitals that are shorter
length of stay and open to the general public (Shi & Singh, 2019). An Academic Medical
Center has a relationship with a college/university or medical school and offers specialized
care for knotty medical problems; it also offers education to those medical students and
hires post graduate students (Shi & Singh, 2019).
In an urban community environment, there are many inner-city deprived and
disadvantaged populations due to the poorer health status of these populations, which
results in more hospital use (Shi & Singh, 2019).
Staffing: Staffing or working for an academic medical center may be more appealing and
easier to find a job due to the association with a medical school.
Programs Offered: In an academic medical center, there is a wide array of programs
offered, such as rehabilitation centers, family medicine, cardiovascular care, infant’s care,
cancer care, and neurology care, among others. According to a public opinion research
report by the AAMC in 2017, 92% of those surveyed said medical schools are doing an
excellent/good job in training and results indicated they outperformed other hospitals in 15
of the 16 attributes asked, including medical innovation, availability of treatments and
technology (Kirch, 2018). Teaching hospitals have a responsibility to incorporate the
latest technologies and medical advances into their treatment because they are training the
new providers of the future (Boston Medical Center, 2022).
In a community hospital, especially a non-profit, their programs offered may be more
limited due to the funding source. Although community hospitals (even non-profits) can
make profits, they must be returned to the hospital’s operations, not the stakeholders
(Indiana Hospital Association, n.d.)
Policies/Procedures:
All hospitals, whether community or medical centers, must have a license to practice and a
certification by the government to participate in Medicare and Medicaid Programs (Shi &
Singh, 2019). The Joint Commission also accredits most hospitals to ensure compliance
with state, federal, Medicare and Medicaid standards (Shi & Singh, 2019).
In an academic medical center there will be procedures based on various teaching
components that are not in place at a regular hospital. In turn, a non-profit hospital will
have many other procedures in regard to their non-profit status.
Financial Impact of a For-Profit Hospital
As with any competition, if another competitor is moving into the space of another, there
will be impact to that institution. For profit hospitals allocate more resources to their
marketing budgets and therefore, may begin to attract more patients, at least initially (The
George Washington University, 2021). According to Dr. David Himmelstein, he argues
that marketing expenditures are “wasteful expenditures that divert patient dollars from
things like equipment and training that could improve quality of care” (The George
Washington University, 2021). With this higher advertising budget, there could be an
impact on the number of patients going to the medical center, however, that is usually
short lived in the quality of care if not up to par at the for profit hospital.
Financial Medical Center: Financial Benefits:
There are financial benefits to being an academic medical center. Medicare Direct
Graduate Medical Education (DGME) offers payments to these teaching hospitals to
support the training of new physicians to meet the increased needs and the teaching
hospitals may offer more benefits or better salary for clinicians (Association of American
Medical Colleges (AAMC), 2022). Medicare also pays for indirect costs involved in
training residents, which is the Indirect Medical Education (IME) Payment, which is
received by teaching hospitals (CGS, 2022).
References:
For Profit vs. Nonprofit Hospital Administration. (2021, July 15).The George Washington
University.Retrieved fromhttps://healthcaremba.gwu.edu/blog/profit-vs-nonprofit-
hospital-administration/
Kirch, Darrell. (2018, July 31). What Americans think about medical schools and teaching
hospitals.Association of American Medical Colleges.Retrieved
fromhttps://www.aamc.org/news-insights/what-americans-think-about-medical-
schools-and-teaching-hospitals
Medical Education Reimbursement. (2022).CGS.Retrieved
fromhttps://www.cgsmedicare.com/parta/audit/mepr/reimbursement.html
Not for profit hospitals. (n.d.)Indiana Hospital Association.Retrieved
fromhttps://www.ihaconnect.org/iha-advocacy/Issues/Pages/Not_for_Profit.aspx
Shi, L. & Singh, D. A. (2019). Essentials of the U.S. Health Care System (5th ed.). Jones
& Bartlett Learning.Burlington, MA.
Sustaining Teaching Hospitals. (2022a).Association of American Medical
Colleges.Retrieved fromhttps://www.aamc.org/news-insights/teaching-hospital-
sustainability
What Really Happens at a Teaching Hospital? (2022).Boston Medical Center.Retrieved
fromhttps://www.bmc.org/podcasts/what-really-happens-teaching-hospital
