LP05 Regulatory Environment In Health Care

Questions: What issues would you want to alert the hospital board to concerning whether this is a permissible venture, and how the HMO can use its capital funds? Would these parties be advised to have the HMO pledge some portion of its revenues to pay for charity care services at MWH? Answers: Answer 1: Joint venture (JV) implies a cooperative enterprise consisting with two or more than that business entities based on a specific business activity or project. According to article, Marcus Welby Hospital (MWH) and HMO are going to form a joint venture for profit. However, they do not have any connection regarding management and personal aspect. To form a permissible venture, the hospital board can concern on this specific issue (Dheensa et al., 2017). The MWH should share profits as well as losses with HMO, based on an agreed proportion. However, it is essential for the concerned firm to keep in mind that each these two nursing homes should contribute physical, economic, managerial and intellectual resources. Through using its capital fund, HMO can participate within the specified operation process. Answer 2: In a profit venture, board members may experience penalties regarding government tax. This can happen if the board confirms a joint venture, which gives for a business transaction or compensation arrangement with insiders (Wang et al., 2015). According to state law, board members follow different types of duties related to care, loyalty. This is also applicable for HMO and MWH nursing homes. The board of this joint venture become responsible for using of charitable assets. Thus, these board members need to use these charitable assets appropriately. However, these nursing homes can offer charity from their revenue to get tax exemption (Sanders, 2018). The joint venture should be structured for provides a charitable purpose. In this context, the venture needs to be substantial. References: Dheensa, S., Carrieri, D., Kelly, S., Clarke, A., Doheny, S., Turnpenny, P., & Lucassen, A. (2017). A’joint venture’model of recontacting in clinical genomics: challenges for responsible implementation. European journal of medical genetics, 60(7), 403-409. Sanders, M. I. (2018). Joint Ventures Involving Tax-Exempt Organizations, 2018 Cumulative Supplement. Wiley. Wang, S., Gao, Y., Hodgkinson, G. P., Rousseau, D. M., & Flood, P. C. (2015). Opening the black box of CSR decision making: A policy-capturing study of charitable donation decisions in China. Journal of Business Ethics, 128(3), 665-683.

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