Healthcare Management Healthcare Clinic Analysis

Healthcare Management

Healthcare Clinic Analysis

The healthcare clinic that is the basis of this analysis is a not-for-profit as it has revenues over $500,000 a year and files a Form 990 with the Internal Revenue Services each year. In compliance to Form 990 requirements, this clinic also provides a Conflict of Interest Policy, Whistleblower Policy and lists the CEO's salary and how it is determined (through donations). In addition to these supporting factors of their Form 990 filing, the clinic also does not compensate its board of directors, has tis financial statement auditing quarterly and has an audit committee comprised of local CPAs who donate their time to serve. In response to the more stringent reporting requirements that the IRS defined for 990-based organizations, the inclusion of salary levels and their calculations are included in nearly every not-for-profit tax filing today (Carlson, 2010). The tax-exempt status for the clinic has been maintained by not only meeting the requirements of the Form 990 but also having the majority of revenues be from donations and a foundation affiliated with a local hospital. The audit trail of revenues within the clinic's financial records is published on the intranet site and also available through the foundation. This level of transparency is critical to keep in compliance to the more stringent reporting requirements of the IRS (Speizman, 2009).

Analysis of Revenues

The majority of revenues (36%) are from the series of charitable organizations that together comprise the foundation supporting the hospital this clinic is associated with. There are on average 22% of revenues from clinic fees and special treatment programs, 28% from insurance subsidies for treating geriatric patients on Medicare and Medicaid and 14% from government programs that pay all medical costs for lower-income patients, primarily children of immigrants. These revenue sources fluctuate significantly over the year, often requiring a rationing of budget for critical supplies. The clinic's budget is one that fluctuations on a quarterly basis depending on funding from the foundation donors and how quickly Medicare, Medicaid and insurance companies reimburse for treatments given. The facility has never had excess revenue and routinely operates unprofitably, continually seeking funding from the foundation to keep the staffing levels up and hire new doctors in the areas of specialization including pediatrics and orthopedics. The most challenging revenue stream is that of the insurance companies, many of which have completely different processes for approving treatment vs. paying for it. At least 50% of the office staff's time is spent going through arbitration calls with insurance companies to make sure the clinic is paid on claims. The foundation also audits the financial records quarterly and will also interview doctors who go through re-certification to see what they need to continue treatment. The hospital that is affiliated to the clinic is also a not-for-profit, as it also files a Form 990 with the IRS. The hospital however gets the majority of the foundation's financial resources and has created entire treatment centers that are named for key donors who are both individuals and corporations. The clinic benefits from these key philanthropists indirectly as well. The costs of the clinic are also reported monthly and posted on the intranet site.