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Organization of a Health Care Facility:
An understanding of the term incorporation is required so as to be able to make the decision of whether to incorporate the health care facility or not. Incorporation can therefore be defined as the process in which a legal entity separate from its owners is created called a corporation. If the health care facility is to be incorporated it would then be referred to as a corporation. This means that it would be recognized as a legal person. Due to the fact that the facility is highly specialized with highly qualified physicians its operations would be on a large scale and therefore would necessitate the incorporation of the facility (Keir, 2008).
Advantages of Incorporation
Incorporation has many advantages since the organization now stands as a legal person and it therefore has an independent corporate existence. This means that the facility is not the members and physicians involved in it, and the physicians and other employees are not the company. This in turn means that the corporation can sue and be sued without directly involving the members.
Another advantage is that as a corporation the facility will enjoy limited liabilities. Since the company is a separate legal entity, it has its own business operations which may lead to large debts. The debts incurred are not charged to the individuals but to the facility.
Upon incorporation the facility will enjoy what is referred to as perpetual succession. From the word perpetual we understand that the business will not end or die, unlike sole proprietorship or partnerships. The facility will therefore have the capacity to continue operating regardless of how many members join and leave in the capacity of physicians.
In the event that the facility acquires property, the assets will not be charged on any one of the members or the physicians but to the facility itself. It will therefore hold and enjoy property in its own name. This also means that no person can claim ownership of the facilities property and equipment.
A great benefit of the incorporation is the management of the corporation. Incorporation will attract professional managers to run the facility and this will help in the creation of a good name and image for the health care facility.
Disadvantages of incorporation
Incorporation is a process that takes time and money. In the process a lot of expenses are incurred and due to the formalities which must be adhered to, it may take time to incorporate the facility. Again, the formalities are not just limited to the formation but also to the running of the facility.
The corporation will have to pay taxes whereas the individuals in the corporation are also charged taxes on their dividends. One of the legal requirements in forming a corporation is the compliance with the Corporation Act which requires the corporations to gazette or make known its performance seasonally on a consistent way. There must also be the regular filing of reports and tax returns.
Another disadvantage is the fact that the corporations are restricted to specific kinds of activities which they state in their formation process.
Feasibility of a profit or nonprofit organizational status for the facility.
A profit organizational status would mean that the facility would be run with profit as its priority and that the profits it makes would be the major reason for its existence. This means that the policies to be implemented will be biased towards making money for the facility rather than on the services rendered.
On the other hand the nonprofit organizational status also known as the non-commercial status shows that the facility uses the surpluses in revenue to achieve its main goal which in this case would mean offering better medical services and having the necessary equipment for the activities in the facility (Holland & Ritvo 2008). Amongst the advantages of the nonprofit organizational status is the fact that there are no taxes charged to this kind of facility. The tax exemption means that the facility will save what it could have paid as state or county taxes.
The facility will also have the capacity to receive all the money that it receives as donations and grants from other financial institutions and well-wishers and donors. Some of the other marginal benefits of running a nonprofit organization status are enjoying cheaper rates of advertising and also access to free radio and television announcements. More often than not, nonprofit organizational models attract the favor and respect of the community around especially if the organization betters the lives of the members of the community. For a health service facility, such an atmosphere would boost its performance as far as offering health services is concerned.
The following is a contract structure that can be used by the health facility to help in the hiring of medical staff for the facility. The contract is to clearly stipulate the facilities expectations and obligations. The contract will therefore have the following structure;
Any contract being a legal document should very clearly identify in writing the parties involved i the formation of the contract. This means that legal status of the facility should also be set forth, for example if it is a contract between a physician and the facility it should be known that it is a nonprofit corporation. The nonprofit status has to be mentioned.
Secondly in the part of the contract that states the duties and the responsibilities of the physicians to be employed into the facility. It should therefore clearly stipulate the terms of the employment whether it is part time employment or full time employment.
The contract should also ensure that the supplies required to perform certain medical services are provided and made available to the physicians who would use them. They should be made aware that they are not expected to provide certain facilities to the facility since it is a corporation with the capacity to record assets under its name. Any violation of the clause in the contract pertaining to the acquisition of equipment and machinery will attract either heavy penalties or loss of employment. In the event that an equipment is required but is .............
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