Case: Interwest Healthcare

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Case: Interwest Healthcare Corporation Managerial Economics Name of institution Student Name Here Dr. James Larriviere March 10, 2013 Introduction Interwest is a 10 hospital, nonprofit healthcare organization. According to Investopedia (2013), nonprofit organizations are tax exempt and must meet specific criteria to maintain this status. They are responsible for disclosing evidence of meeting the criteria to the federal government and often to the public. Although Interwest is not trying to make a profit it has a need and responsibility to sustain itself and its nonprofit status. According to Griffin (n.d.), some of the benefits of having a nonprofit designation include being exempted from federal taxes, permission to solicit donations, and liability protection for the corporation in some states for cases of negligence or injury. The primary costs of having nonprofit designation are in paying for services to ensure the company is following all nonprofit legislation including how its income is being used. Many nonprofit organizations rely upon government grants and philanthropic donations to meet financial obligations. If the Interwest’s reports continue to look inaccurate, the company risks losing its nonprofit designation including its tax exempt status, losing philanthropic donations due to public mistrust and losing federal grant money. This case will look at the potential sources of the problem, the data that should be analyzed, recommendations to increase data accuracy and how a consultant might address and improve the situation from an economist’s view of behavior. Background The Interwest Healthcare Corporation case in Managerial Economics and Organizational Architecture (2009) represents the challenges faced by Cynthia Manzoni, Chief Operating Officer and Vijay Singh, Chief Financial Officer (p. 38). Singh’s concerns were related
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