Marketing Matrix For Profit And Not-For-Profit Healthcare

Marketing Matrix For Profit And Not For Profit Health Care Organizat

Marketing Matrix: For-Profit and Not-For-Profit Health Care Organizations Contrast between For-profit and not-for profit healthcare organizations Aspect of Comparison For-profit health care organization Not-for profit health care organization Level of centralization For profit healthcare is majorly decentralized and decisions are made by individuals under the authority of directors and other employees in the managerial positions. The implementation of policies is not subject to the approval of those in senior managerial positions (Eiland, 2015). There is lack of uniformity in policies implemented in various subsidiaries of for-profit healthcare organizations. There is a high centralization of decision making in which subsidiary hospitals are not permitted to formulate policies affecting their activities without the approval of agencies such as regulatory bodies, government departments, or healthcare secretaries. There is consistency of policies affecting practices in all not-for profit organizations. Levels of Access to capital markets There is low chance of access to capital market due to restrictions and barriers to private firms that operate for-profit healthcare organizations. The operators of for-profit health care organizations have to comply with a number of terms and conditions before accessing loans, grants, or bonds for improvement of their services (Paul III, Godby, Saldanha, Valle & Coustasse, 2016). The likelihood or the ability to access the capital markets funds is high due to few restrictions. Most not-for profit organizations also get loans and grants at subsidized interest rates (Shugarman, Nicosia & Schuster, 2007). A significant amount of funds for operation are provided by the government. Strategic marketing differences The marketing activities focus on improving the welfare of the organizations such as high returns on investments, increase in the number of patients who seek their services, and increased market share. The strategic marketing activities are aimed at achieving a competitive advantage over other health care providers in a region. Marketing is done using private funds. The strategic marketing activities are focused on increasing public health quality such as by increasing accessibility to healthcare services. Marketing is usually done using public funds. Quality Attributes The quality of services is usually high due to the need to increase competitiveness and comply with the quality standards expected of a health care organization (Shugarman, Nicosia & Schuster, 2007). The quality of services is also high because most organizations aim at achieving customer satisfaction and retention. The quality of services is usually not high when compared with for-profit health care services because of lack of profit drive and lack of accountability. Most employees of not-for profit health care services provide their services with the objective of improving access to health care services without necessarily improving the quality of treatment, medication, or patient education services (Eiland, 2015). Management of pricing and volume The pricing is usually high and patients have to incur high cost to access services such as careening, treatment, and medications. The high cost of treatment is due to the fact that for-profit health care organizations incur high cost of operation such as taxes and licensing fees which has an impact on their profitability (Paul III et al., 2016). The management of volume is achieved by the expansion of a medical facility or increasing the number of staffs. The pricing is comparatively low and most services are provided free of charge. The payments for staffs are usually high and most employees feel satisfied with their earnings. The management of volume is achieved by increasing funding for the construction of more healthcare facilities.

Paper For Above instruction

In the healthcare industry, organizational structure and strategic marketing differ significantly between for-profit and not-for-profit entities. Understanding these differences is essential for stakeholders, policymakers, and healthcare professionals who aim to optimize healthcare delivery and organizational performance.

Organizational Structure: Centralization and Capital Access

One of the most prominent distinctions lies in the level of centralization of decision-making. For-profit healthcare organizations tend to be decentralized, where decisions are made by individuals such as managers or departmental heads within the framework provided by upper management (Eiland, 2015). This decentralization facilitates flexibility and rapid response to market changes but can lead to policy inconsistency across subsidiaries. Conversely, not-for-profit healthcare organizations often exhibit high centralization, with policies and practices uniformly implemented to align with organizational missions and regulatory standards. These entities face fewer restrictions in accessing capital, often benefiting from government grants, subsidies, and low-interest loans, whereas for-profit entities usually encounter barriers imposed by financial institutions due to their profit-driven nature (Shugarman, Nicosia & Schuster, 2007).

Strategic Marketing and Goals

The strategic marketing efforts of for-profit organizations focus primarily on financial metrics such as increasing return on investments, expanding patient volumes, and gaining market share (Paul III et al., 2016). These marketing strategies leverage private funds to attract paying patients and enhance profitability, emphasizing service quality that emphasizes competitiveness. In contrast, not-for-profit organizations prioritize public health outcomes, aiming to improve access and affordability of healthcare services. Their marketing campaigns often highlight community benefits, accessibility, and quality of patient care, frequently utilizing public funds to sustain operations and outreach programs (Shugarman, Nicosia & Schuster, 2007).

Quality Attributes and Service Delivery

Quality assurance is a critical aspect of healthcare organizations, with both types striving to meet or exceed standards. For-profits generally invest in high-quality services to attract and retain customers, driven by the necessity to remain competitive. They often incorporate rigorous quality control measures and patient satisfaction metrics. Not-for-profit organizations also aim for high-quality services but may face resource constraints, which can affect service quality, especially when profit motives are absent (Eiland, 2015). Many employees in not-for-profit health settings focus on access and community health objectives rather than solely on clinical excellence.

Pricing and Volume Management

The pricing strategies differ markedly; for-profit providers typically set higher prices for their services, justified by operational costs such as taxes, licensing, and profit margins. Patients often bear the financial burden through higher out-of-pocket expenses (Paul III et al., 2016). Volume management in for-profit settings involves expanding infrastructure or staffing to increase capacity. On the other hand, not-for-profits tend to offer services at lower costs or free of charge, focusing on increasing accessibility and service volume by seeking additional funding from governmental sources. These organizations often expand by securing grants or increasing funding for new facilities, aiming to serve larger populations.

Implications for Healthcare Policy and Management

The distinctions between these organizational types have vital implications for healthcare policy. For-profit entities may prioritize financial sustainability, which can sometimes conflict with public health goals, whereas not-for-profits are inherently aligned with community health missions but may struggle with resource limitations. Effective management requires balancing financial viability with service quality and accessibility, accounting for each organization's unique strategic focus.

Conclusion

Overall, the contrasting organizational structures and strategic orientations of for-profit and not-for-profit healthcare organizations influence their decision-making, marketing strategies, service quality, and access to funding. Recognizing these differences enables healthcare managers and policymakers to craft practices and policies that leverage organizational strengths and mitigate weaknesses, ultimately enhancing healthcare delivery outcomes.

References

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• Paul III, D. P., Godby, T., Saldanha, S., Valle, J., & Coustasse, A. (2016). Quality of care and profitability in not-for-profit versus for-profit nursing homes.
• Shugarman, L. R., Nicosia, N., & Schuster, C. R. (2007). Comparing For-Profit and Not-for- Profit Health Care Providers.
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