Chapter 1

An Overview of Health Care

Management

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 Learning Objectives

DEFINE HEALTH CARE DIFFERENTIATE AMONG COMPARE AND IDENTIFY CURRENT

MANAGEMENT AND THE THE FUNCTIONS, ROLES, CONTRAST THE KEY AREAS OF RESEARCH IN
ROLE OF THE HEALTH AND RESPONSIBILITIES COMPETENCIES OF HEALTH CARE
CARE MANAGER. OF HEALTH CARE HEALTH CARE MANAGEMENT.
MANAGERS. MANAGERS.

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 Direct vs Non-Direct Care

Non-direct care settings: not

Direct care settings: provide directly involved in providing
care directly to a patient, care to persons needing health
resident, or client who seeks services; support the care of
services from the individuals through products
organization. and services made available
to direct care settings.

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 Direct Care Employment Growth

• The BLS projects that employment of

medical and health services managers is
expected to grow 23 percent from 2012 to
2022.
• Greatest growth in managerial positions
will occur in outpatient centers, clinics,
and physician practices.
• Largest growth numbers will be in
hospitals due to size of sector.

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 Non-Direct Care Employment
Growth

Consulting firms, pharmaceutical companies, It is expected that growth will also occur in
associations, and medical equipment companies managerial positions in non-direct care settings.
provide significant assistance to direct care
organizations.

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 Managers Needed

• Managers are needed to make certain that

organizational tasks are carried out in the
best way possible to achieve
organizational goals; and that appropriate
resources, including financial and human
resources, are adequate to support the
organization.

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 Figure 1-1
• U.S. Bureau of Labor
Statistics, Employment
Projections program
(projected new jobs,
2012–22) and
Occupational
Employment Statistics
Survey (employment
and median annual
wages, May 2013).

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 Table 1-1
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 Definition of Management
• The process, comprised of social and
technical functions and activities, occurring
within organizations for the purpose of
accomplishing predetermined objectives
through human and other resources.
• Managers work through others to
accomplish organizational goals.

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 Table 1-2
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 • This function requires
the manager to set a
direction and
determine what needs
to be accomplished. It
means setting
priorities and
determining
performance targets.
Planning

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 Organizing

• Refers to the overall design of the

organization or the specific
division, unit, or service for
which the manager is responsible.
Further, it means designating
reporting relationships and
intentional patterns of interaction.
Determining positions, teamwork
assignments, and distribution of
authority and responsibility are
critical components of this
function.

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 Staffing

• Acquiring and retaining human

resources.
• Developing and maintaining the
workforce through various
strategies and tactics.

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 Controlling and
Directing

• Controlling: monitoring staff

activities and performance and
taking the appropriate actions for
corrective action to increase
performance.
• Directing: initiating action in the
organization through effective
leadership and motivation of, and
communication with,
subordinates.

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 Decision Making

• This function is critical to all of

the aforementioned management
functions and means making
effective decisions based on
consideration of benefits and the
drawbacks of alternatives.

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 Competencies:
Conceptual Skills

• Those skills that involve the

ability to critically analyze and
solve complex problems.
• Examples:
– a manager conducts an
analysis of the best way to
provide a service
– a manager determines a
strategy to reduce patient
complaints regarding food
service

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 Competencies: Technical Skills

Those skills that

reflect expertise or
Examples:
ability to perform a
specific work task.

a manager develops a manager designs

and implements a and implements
new incentive modifications to a
compensation computer-based
program for staff staffing models

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 Competencies: Interpersonal Skills

• Those skills that enable a manager to

communicate with and work well with other
individuals, regardless of whether they are
peers, supervisors, or subordinates.
• Examples:
– A manager counsels an employee whose
performance is below expectations.
– A manager communicates to subordinates
the desired performance level for a
service for the next fiscal year.

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 Hierarchy and Control

Management positions exist at lower levels, middle-

management levels, and upper levels, i.e., senior
management.

Hierarchy of management means that authority, or

power, is delegated downward in the organization, and that
lower-level managers have less authority than higher-level
managers whose scope of responsibility is much greater.

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 Vertical Structure

• Size and complexity of the specific

health services organization will dictate
the particular structure.
• Larger organizations—such as large
community hospitals, hospital systems,
and academic medical centers—will
likely have deep vertical structures
reflecting varying levels of
administrative control for the
organization.

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 Matrix Structure

• These include team-based models and

service line management models.
• The matrix model recognizes:
– that a strict functional structure
may limit the organization’s
flexibility to carry out the work,
and
– that the expertise of other
disciplines is needed on a
continuous basis.

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Matrix Examples

Team: functional staff, such

as nursing and rehabilitation Service Line: manager heads
personnel, are assigned to a a specific clinical service line
specific program such as (e.g., cardiology) with
geriatrics and report for accountability for staffing,
programmatic purposes to the resource acquisition, budget,
program director of and financial control.
geriatrics.

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 Team Work

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Anan Ghabbash / OCTH 353

Focus of Management

Self Management: the individual

manager must be able to
effectively manage himself or Maintaining a positive attitude and
herself, as well as time, high motivation; developing and
information, space, and materials; applying appropriate skills and
being responsive and following competencies.
through with peers, supervisors,
and clients.

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Unit/Team Management

Includes assigning work tasks,

The expertise of the manager at review and modification of
this level involves managing assignments, monitoring and
others in terms of effectively review of individual
completing the work through performance, and carrying out
task interdependence. the management functions
described previously.

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Organizational Management

MANAGERS MUST WORK TOGETHER AS PART SUCCESS OF THE ORGANIZATION DEPENDS

OF THE LARGER ORGANIZATION TO ENSURE UPON THE SUCCESS OF ITS INDIVIDUAL
ORGANIZATION-WIDE PERFORMANCE AND PARTS, AND EFFECTIVE COLLABORATION IS
ORGANIZATIONAL VIABILITY. NEEDED TO ENSURE THAT THIS OCCURS.

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Talent Management

Recruitment, retention, training, and Health care organizations compete Managers look for and keep the
development of highly skilled with each other for the brightest and talent!
employees is critical to health care the best talent.
organizations.

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 Organizational Culture, Values,
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Mission, and Vision

Organizational culture: the beliefs, attitudes, and behaviors that are

shared among organizational members.

Values: principles the organization believes in that guide activities.

Mission: the organization’s purpose.

Vision: a desired future state describing what the HSO will be

recognized and known for.
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Ensuring High Performance

One framework has pillars of

excellence for the specific
High-performance goals of the organization:
organizations are results people (employees, patients
oriented. and physicians), service,
quality, finance, and growth
(Studer, 2003).

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 Ensuring High Performance

• Another framework speaks of “champions” and the “championship process”

measures of performance; including
– Governance and strategic management; clinical quality, including
customer satisfaction; clinical organization (caregivers); financial
planning; planning and marketing; information services; human
resources; and plant and supplies (Griffith, 2000).

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 • Stakeholders, including insurers, state and federal
governments, and consumer advocacy groups, are expecting,
and in many cases demanding, acceptable levels of
Stakeholders performance in health care organizations.
• Want to make sure that services are provided in a safe,
convenient, low­-cost, and high-quality environment.

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 Leadership Development
and Succession Planning

• Leadership development is defined as

educational interventions and skill-
building activities designed to improve
the leadership capabilities of individuals
(McAlearney, 2005; Kim & Thompson,
2012).
• Leadership development activities
include structured courses, mentoring,
360-degree feedback, personal coaching,
job enlargement.

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 Leadership Development
and Succession Planning
(Cont’d.)

• Succession planning: the concept of

taking actions to ensure that staff can
move up in management roles within
the organization, in order to replace
those managers who retire or move to
other opportunities in other
organizations.
• Now more than ever before, succession
planning is needed at all levels, not just
senior management.

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Innovation and Change Management

HSOs cannot remain static! Environmental forces require HSOs to Achieving and sustaining high
adapt. performance (outcomes or results)
requires making improvements to
organizational structure and processes.

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 Innovation and Change Management
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(Cont’d.)

Change management:
organizational change is a
Two types of innovation:
structured management approach
management innovation and
to improving the organization
operational innovation (Hamel,
and its performance, and is based
2007).
on knowledge of performance
gaps (Thompson, 2010).

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Health Care Policy

Managers must be Often organizations have

knowledgeable about health designated staff to monitor
policy matters under this—but the manager must
consideration at the state and stay current or lose
federal levels that affect opportunities. Professional
organizations and health care organizations such as ACHE
delivery. and MGMA help with this.
American College of Healthcare Executives (ACHE)

MGMA: Medical Group Management Association

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 Current Research in Health Care
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Management

Best practices of managers: Effectiveness of leadership

employee engagement, staff development programs: talent
acquisition and development, reviews, 360-degree
staff frontline empowerment, feedback, career development
and leadership alignment and planning, job rotations,
development. developmental assignments.

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 CHAPTER SUMMARY
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• The profession of health care management is challenging yet rewarding, and

requires per- sons in managerial positions at all levels of the organization to
possess sound conceptual, technical, and interpersonal skills to carry out the
necessary managerial functions of planning, organizing, staffing, directing,
controlling, and decision making.

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 CHAPTER SUMMARY-cont
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• In addition, man- agers must maintain a dual perspective where they

understand the external and internal domains of their organization and the
need for development at the self, unit/team, and organization levels.
Opportunities exist for managerial talent at all levels of a health care
organization, including supervisory, middle-management, and senior-
management levels.

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 • The role of manager is critical to ensuring a high level of
CHAPTER organizational performance, and managers are also
instrumental in establishing and maintaining organizational
SUMMARY- culture, talent recruitment and retention, leadership
development and succession planning, innovation and change
cont management, and shaping health care policy.

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Anan Ghabbash / OCTH 353

Define health care management and health care managers.

Delineate the functions carried out by health care

managers and give an example of a task in each function.

Explain why interpersonal skills are important in health

care management.
DISCUSSION
QUESTIONS Compare and contrast three models of organizational
design.

Why is the health care manager’s role in ensuring high

performance so critical? Explain.

Characterize the health care manager’s role in change

management and assess the extent to which this has an
impact on the success of the change process.

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