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Health care is a business, albeit a special one. Like every other business, it needs good management to keep it running smoothly, especially during times of change. The term "health services manager" encompasses individuals in many different positions who plan, organize, coordinate, and supervise the delivery of health care. Health services managers include both generalistsadministrators who manage or help to manage an entire facilityand health specialistsmanagers in charge of specific clinical departments or services found only in the health industry
The structure and financing of health care is changing rapidly. Future health services managers must be prepared to deal with evolving integrated health care delivery systems, restructuring of work, and an increased focus on preventive care.
The top administrator or chief executive officer (CEO) and the assistant administrators without specific titles are health care generalists, who set the overall direction of the organization. They concentrate on such areas as community outreach, planning, marketing, human resources, finance,, and complying with government regulations. Their range of knowledge is broad, including developments in the clinical departments as well as in the business arena. They often speak before civic groups, promote public participation in health programs, and coordinate the activities of the organization with those of government or community agencies. CEO's make long-term institutional plans by assessing the need for services, personnel, facilities, and equipment and recommending changes such as opening a home health service. CEO's need leadership ability as well as technical skills to provide quality health care while, at the same time, satisfying demand for financial viability, cost containment, and public and professional accountability.
Larger facilities typically have several assistant administrators to aid the top administrator and to handle day-to-day decisions. They may direct activities in clinical areas such as nursing, surgery, therapy, food service, and medical records; or the activities in nonhealth areas such as finance, housekeeping, human resources, and information management. (Because the nonhealth departments are not directly related to health care, these managers are not included in this statement. For information about them, see the statements on managerial occupations elsewhere in the Handbook). In smaller facilities, top administrators may handle more of the details of day-to-day operations. For example, many nursing home administrators directly manage personnel, finance, operations, and admissions.
Clinical managers have more narrowly defined responsibilities than generalists and have training and/or experience in a specific clinical area. For example, directors of physical therapy are experienced physical therapists, and most medical records administrators have a bachelor's degree in medical records administration. These managers establish and implement policies, objectives, and procedures for their departments; evaluate personnel and work; develop reports and budgets; and coordinate activities with other managers.
In group practices, managers work closely with the physician owners. While an office manager may handle business affairs in small medical groups, leaving policy decisions to the physicians themselves, larger groups generally employ a full-time administrator to advise on business strategies and coordinate day-to-day business.
A small group of 10 or 15 physicians might employ a single administrator to oversee personnel matters, billing and collection, budgeting, planning, equipment outlays, and patient flow. A large practice of 40 or 50 physicians may have a chief administrator and several assistants, each responsible for different areas.
Health services managers in health maintenance organizations (HMO's) and other managed caresettings perform functions similar to those in large group practices, except their staffs may be larger. Also, they may do more work in the areas of community outreach and preventive care than managers of a group practice. The size of the administrative staff in HMO's varies according to the size and type of HMO.
Some health services managers oversee the activities of a number of facilities in multifacility health organizations.
Many health services managers work long hours. Facilities such as nursing homes and hospitals operate around the clock, and administrators and managers may be called at all hours to deal with problems. They may also travel to attend meetings or to inspect satellite facilities.
Health services managers held about 315,000 jobs in 1994. Over one-half of all jobs were in hospitals. About 1 in 4 were in nursing and personal care facilities or offices and clinics of physicians. The remainder worked in home health agencies, medical and dental laboratories, offices of dentists and other practitioners, and other health and allied services.
Health services managers must be familiar with management principles and practices. Some learn from work experience. However, formal education is usually necessary for advancement. Most CEO positions require a graduate degree in health services administration, nursing administration, or business administration. For some generalist positions, employers seek applicants with clinical experience (as nurses or therapists, for example) as well as academic preparation in business or health services administration.
Bachelor's, master's, and doctoral degree programs in health administration are offered by colleges, universities, and schools of public health, medicine, allied health, public administration, and business administration. There are also some certificate or diploma programs, generally lasting less than 1 year, in health services administration and in medical office management. A master's degree in health services administration, long term care administration, health sciences, public health, public administration, or business administrationis the standard credential for most generalist positions in this field. However, a bachelor's degree is adequate for some entry-level positions in smaller operations. A bachelor's degree is required to work in smaller nursing homes, and a master's degree in larger long-term care facilities. Physicians' offices and some other facilities may substitute on-the-job experience for formal education. For clinical department heads, a degree in the appropriate field and work experience are usually sufficient, but a master's degree in health services administration usually is required to advance.
In 1995, 69 schools had accredited programs leading to the master's degree in health services administration, according to the Accrediting Commission on Education for Health Services Administration.
Some graduate programs seek students with undergraduate degrees in business or health administration; however, many programs prefer students with a liberal arts or health professions background. Competition for entry to these programs is keen, and applicants need above-average grades to gain admission. The programs generally last between 2 and 3 years. They may include up to 1 year of supervised administrative experience, and course work in areas such as hospital organization and management, marketing, accounting and budgeting, human resources administration, strategic planning, health economics, and health information systems. Some programs allow students to specialize in one type of facilityhospitals; nursing homes; mental health facilities; HMO's; or outpatient care facilities, including medical groups. Other programs encourage a generalist approach to health administration education.
New graduates with master's degrees in health services or hospital administration may start as department managers or in staff positions. The level of the starting position varies with the experience of the applicant and the size of the facility. Postgraduate residencies and fellowships are offered by hospitals and other health facilities; these usually are staff positions. Graduates from master's degree programs also take jobs in HMO's, large group medical practices, clinics, mental health facilities, and multifacility nursing home corporations.
Graduates with bachelor's degrees in health administration usually begin as administrative assistants or assistant department heads in larger hospitals, or as department heads or assistant administrators in small hospitals or in nursing homes.
A Ph.D. degree may be required to teach, consult, or do research. Nursing service administrators are usually chosen from among supervisory registered nurses with administrative abilities and a graduate degree in nursing administration.
All States and the District of Columbia require nursing home administrators to have a bachelor's degree, pass a licensing examination, complete a State-approved training program, and pursue continuing education. A license is not required in other areas of health services management.
Health services managers are often responsible for millions of dollars of facilities and equipment and hundreds of employees. To make effective decisions, they need to be open to different opinions and good at analyzing contradictory information. They must understand finance and information systems, and be able to interpret data. To motivate others to implement their decisions, they need strong leadership qualities. Tact, diplomacy, flexibility, and communication skills are essential.
Health services managers advance by moving into more responsible and higher paying positions such as assistant or associate administrator, or by moving to larger facilities.
Employment of health services managers is expected to faster than the average for all occupations through the year 2005 as health services continue to expand and diversify. Opportunities will be good in home health care, long-term care and nontraditional health organizations such as managed care operations, particularly for health services managers with strong business and management skills.
Hospitals will continue to employ the most managers, although the number of jobs will not grow nearly as fast as in other areas, such as long-term and home health care. As hospitals continue to consolidate, centralize, and diversify functions, competition will increase at all job levels.
Employment in home health agencies, offices of other health practitioners, and nursing and personal care facilities will grow the fastest, due to an increased number of elderly who will need care. In addition, many services previously provided in hospitals will be shifted to these sectors. Demand in medical group practices will also grow as medical group practices and HMO's become larger and more complex. Health services managers will need to deal with the pressures of cost containment and financial accountability, as well as the increased focus on preventive and primary care.
Health services managers will also be employed by hospital management companies who provide expertise in areas such as emergency department assistance, information management systems, managed care contract negotiations, and physician recruiting. They may also provide consulting services to medical group practices.
Earnings vary by type and size of the facility, as well as by level of responsibility. For example, the Medical Group Management Association reported that the median salary for administrators in group practices was $65,000 in 1994. The median salary for those in small group practiceswith net revenues of $2 million or less*was $48,000; for those in very large group practiceswith net revenues over $10 million*$116,000.
According to a survey by Modern Healthcare magazine, half of all hospital CEO's earned $165,500 or more in 1995. Salaries varied according to size of facility and geographic region. Clinical department heads' salaries varied too. Median total compensation in 1995 for heads of the following clinical departments were: Home health, $55,000; radiology, $58,000; physical therapy, $58,200; ambulatory/outpatient services, $62,400, rehabilitation services, $66,700; and nursing services, $88,000.
According to the Buck Survey conducted by the American Health Care Association, nursing home administrators had median annual compensation of about $47,400 in 1994. The middle 50 percent earned between $40,900 and $55,400. Assistant administrators earned about $32,000.
Executives often receive bonuses based on performance outcomes such as cost-containment, quality assurance, and patient satisfaction.
Health services managers have training or experience in both health and management. Other occupations that require knowledge of both fields are public health directors, social welfare administrators, directors of voluntary health agencies and health professional associations, and underwriters in health insurance companies.
General information about health administration is available from:
American College of Healthcare Executives, One North Franklin St., Suite 1700, Chicago, IL 60606.
Information about undergraduate and graduate academic programs in this field is available from:
Association of University Programs in Health Administration, 1911 North Fort Myer Dr., Suite 503, Arlington, VA 22209.
For a list of accredited graduate programs in health services administration, contact:
Accrediting Commission on Education for Health Services Administration, 1911 North Fort Myer Dr., Suite 503, Arlington, VA 22209.
For information about career opportunities in long term care administration, contact:
American College of Health Care Administrators, 325 S. Patrick St., Alexandria, VA 22314.
For information about career opportunities in medical group practices and ambulatory care management, contact:
Medical Group Management Association, 104 Inverness Terrace East, Englewood, CO 80112.
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