Regulatory Environment Analysis: Marcus Welby Healthcare Corporation

This report examines the regulatory environment within the healthcare sector, focusing on the Marcus Welby Healthcare Corporation, a non-profit organization experiencing financial challenges. The analysis explores the corporation's history, revenue sources, and the impact of Medicare, Medicaid, and private insurance on its financial performance. The report highlights the hospital's strategies to address revenue losses, including charging hospital-based physicians for departmental services, particularly in radiology and clinical laboratories. The report references key literature to provide a comprehensive understanding of the regulatory environment and its influence on healthcare organizations' financial sustainability. The report discusses how the organization is adapting to changes in the healthcare payment landscape and its implications for the hospital's financial health and operational strategies.

Running Head: REGULATORY ENVIRONMENT IN HEALTHCARE
REGULATORY ENVIRONMENT IN HEALTHCARE

REGULATORY ENVIRONMENT IN HEALTHCARE
Marcus Welby Healthcare Corporation is a non-profit, private organization was born in the
1950s as a small community hospital, but present the organization has spread out itself with 400
beds for the patients who are served day and night by approximately 2000 workers. This
organization is basically located in the outskirts of the metropolitan city of more than one million
people with other three main territory care hospitals and four small community hospitals (Ginter,
Duncan & Swayne, 2018). The three other main territory care hospitals have more than 300beds
and smaller community hospitals have more than 100 beds. As a outside counsel, it is noticed
that the Marcus Welby Healthcare Corporation has been experiencing loss of money under the
primary departments under Medicare and HMO insurance. At present Marcus Welby Healthcare
Corporation gets 38 per cent of the gross revenue from Medicare, 12 per cent from Medicaid and
40 per cent from the private insurance.
In 1950s, the founders of the Marcus Welby Healthcare Corporation have applied for a
construction loan from providing 100-bed facility (Bailit, 2017). In the 1960s as revenue from
the Medicare increased, it enabled the hospital to take loans for 100 more bed facility with better
infrastructure and better service to the patients. In the 1980s as there was a fundamental
alteration in the way the Medicare pays the hospitals, many hospitals consolidated. But Marcus
Welby decided to make widen their variations in serving the patients with a large bed capacity.
Marcus Welby used a bond issue financed through the government and doubled its bed size.
But now, Marcus Welby is experiencing loss of revenue and is thinking of charging its hospital-
based physician for running their respective departments. As influenced by Van den Broek,
Boselie & Paauwe (2018), previously according to the hospital practices, the physicians had a
good relation with the hospital and in spite of having a contract between them; the hospital never
charged any money from the physician. In fact the accounting part of the revenue of the expenses
that included billing, staffing and overhead also included the service charges and the professional
fee from the physician. But out of the good relations with Marcus Welby, the physician kept the
whole money instead of giving to the hospital.
The radiology group that utilizes the services, supplies, personnel, utilities, maintenance and
billing services and are furnished by the hospital. The same expenditure in the office-based
setting would sum up to $100,000 to $150,000 per year. Keeping in mind this aspect the hospital
would charge $25,000 from the radiology group in the first year but would gradually increase it
to $100,000 over the time period of four years (Morain, Kass & Grossmann, 2017). It is even

REGULATORY ENVIRONMENT IN HEALTHCARE
planned that the clinical laboratory under the working of the pathology group would have to pay
approximately 20 per cent for ‘specimen collection and handling charges’ only when a physician
of the Marcus Welby order a test. These strategies would help Marcus Welby to overcome its
loses in the revenue in future.

REGULATORY ENVIRONMENT IN HEALTHCARE
Reference List
Ginter, P. M., Duncan, W. J., & Swayne, L. E. (2018). The strategic management of health care
organizations. John Wiley & Sons. Retrieved on: 25 Oct 2018, from:
https://erl.ucc.edu.gh/dspace/bitstream/123456789/3016/1/%5BLinda_E._Swayne
%2C_Jack_Duncan%2C_Peter_M._Ginter%5D_St%28BookZZ.org%29.pdf
Van den Broek, J., Boselie, P., & Paauwe, J. (2018). Cooperative innovation through a talent
management pool: A qualitative study on coopetition in healthcare. European
Management Journal, 36(1), 135-144. Retrieved on: 25 Oct 2018, from:
https://parsproje.com/tarjome/modiriyat/755.pdf
Morain, S. R., Kass, N. E., & Grossmann, C. (2017). What allows a health care system to
become a learning health care system: results from interviews with health system leaders.
Learning Health Systems, 1(1), e10015. Retrieved on: 25 Oct 2018, from:
https://onlinelibrary.wiley.com/doi/pdf/10.1002/lrh2.10015
Bailit, H. L. (2017). The oral health care delivery system in 2040: executive summary. Journal of
dental education, 81(9), 1124-1129. Retrieved on: 25 Oct 2018, from:
http://www.jdentaled.org/content/jde/81/9/1124.full.pdf