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Health Care Management

Overview

Health care is the largest industry in the United States, employing more than 18 million people and growing rapidly, according to the Centers for Disease Control. Health care workers diagnose, treat, and administer care to patients 24 hours a day, 7 days a week.

The health care system is comprised of a wide variety of medical facilities that are located throughout the country. Hospitals provide comprehensive medical care to patients. Services include emergency care, diagnostic medicine, surgery, and general care. Nursing and residential facilities provide medical services to people who need continuous care, but do not need to be hospitalized.

Offices of physicians and other health care professionals consist of small groups of medical professionals who work together to reduce practice costs. These physicians see patients with problems ranging from the flu to serious illnesses, such as cancer or heart disease. Group medical practices are similar, but they often have hundreds, and even thousands, of doctors on staff. Rehabilitation centers help people recover from stroke, injuries, or other medical conditions. Diagnostic imaging centers provide imaging services such as radiography and sonography. Urgent-care facilities provide care on an unscheduled, walk-in basis to people with illnesses or injuries that are not serious enough to cause them to go to a hospital emergency room. Home health care services provide medical and nursing care to patients in their homes. Additionally, some medical professionals work at health care consulting firms, providing their expertise to the various industry sectors.

It takes skilled managers to keep these facilities and the health care system running effectively to serve the needs of patients. Health care managers direct the operation of hospitals, nursing homes, and other health care organizations. They are responsible for facilities, services, programs, staff, budgets, and relations with other organizations.

More than 332,000 health care managers are employed in hospitals; group medical practices; offices of physicians, dentists, and other health practitioners; and centers for urgent care, rehabilitation, and diagnostic imaging. Opportunities are also plentiful in long-term care facilities, such as nursing homes, home health care agencies, adult day care programs, life care communities, and other residential facilities. Health care facilities are owned by state and federal governments or religious and other nonprofit organizations. Many are for-profit companies such as HCA Holdings, Community Health Systems, Tenet Healthcare, DaVita, Universal Health Services, LifePoint Health, Kindred Healthcare, Genesis Healthcare, Brookdale Senior Living, Select Medical Holdings, Encompass Health Corporation, Steward Health Care, Acadia Healthcare, and VCA—all of which made the Fortune 500 in 2017. Some health care managers work for health care consulting firms or own their own consulting businesses. The military and the U.S. Departments of Veterans Affairs and Health & Human Services, as well as state and local agencies, also offer careers in this field.

Health care is big business. Total U.S. health care expenditures reached $3.3 trillion in 2016, according to the Centers for Medicare & Medicaid Services. Industry expenditures broke down as follows: hospital care ($1.1 trillion), physician and clinical services ($664.9 billion), prescription drugs ($328.6 billion), nursing care facilities and continuing care retirement communities ($162.7 billion), dental services ($124.4 billion), and home health care services ($92.4 billion). These large expenditures translate into excellent job opportunities for health care managers, who, in addition to managing employees and facilities, are needed to help manage budgets and reduce expenditures while still providing quality health care services to patients.

Jobs for those in health care management range from chief executive officers, who lead entire facilities, to department heads, who are responsible for a single department at a hospital or other health care facility. Such departments include nursing administration, finance, government relations, marketing and public affairs, patient care services, and others. Jobs in health care management exist at many levels and provide opportunities for people with a wide range of skills and experience. Medical knowledge is not always required, and many of the jobs typical of any large company or organization exist in the industry, with the bonus that they are likely to be in demand in the future as the need for health care grows.

Health care manager typically ranks high in “best job” lists due to its combination of good pay, relatively low stress levels, challenging work, advancement possibilities, strong employment demand, and other criteria. 

In 2017, CNNMoney/PayScale ranked the career of hospital administrator as the 8th-best job in the United States because it offered “big growth, great pay, and satisfying work.” The career received the following letter grades: personal satisfaction: A; benefit to society: A; opportunity to telecommute: B; and low stress: C.

Eighty-five percent of health care executives surveyed by the recruiting firm B.E. Smith in 2017 reported that they were satisfied with their careers.

Uppers
  • Personally fulfilling. Working collaboratively with a diverse array of professionals and disciplines toward a common goal, the delivery of quality patient care. Health care is extremely important and being a part of providing this service can be very meaningful.
  • Strong salaries. While entry-level managers may start at a salary in the area of $56,000, compensation for chief executive officers in hospitals ranges from $200,000 to more than $500,000 annually, depending on hospital size. Executives in hospital and health care systems may earn more than $1 million per year in total compensation.
  • Good benefits. Many health care managers receive additional benefits, such as cars, travel allowances, expense accounts, and paid travel and expenses for conferences, seminars, and meetings. Many managers have the opportunity to earn incentive compensation when achieving pre-established objectives. For example, a nursing home administrator who maintains a 95 percent occupancy rate may receive a bonus equal to 10 percent of his or her base salary. This type of compensation is common, and rewards the manager for good performance.
  • Flexibility. The ability to move to and work in almost any part of the country is another positive feature of health care management. Health care managers frequently relocate from one part of a state to another or to other parts of the country. The skills one acquires as a health care manager are generally transferable, allowing the manager to move to a similar organization (from one hospital to another, or one nursing home to another). In addition, the geographic distribution of health care organizations allows managers to work and live in the type of setting they prefer, from urban to suburban to rural. This also provides the opportunity for managers to live in close proximity to their workplace, particularly in suburban and rural locations.
  • A diverse set of responsibilities. Over the course of a day, the manager interacts with physicians, nurses, accountants, therapists, housekeepers, dietitians, food service workers, and, at times, engineers, architects, and government officials. The broad spectrum of disciplines and individuals that the manager encounters makes the job interesting and stimulating.
Downers
  • High stress. Increasing financial pressures have placed demands on health care managers to accomplish more with fewer resources. Staff levels are frequently reduced, new equipment may not be readily available, and adhering to budgeted expenses is a requirement of the job. These constraints, coupled with more regulations and public scrutiny of health care, have made the job more challenging and often results in anxiety and frustration for the manager.
  • Grueling schedules. Hospital administrators typically work 10 or more hours a day and have evening meetings several times a week. Managers in other settings, such as nursing homes and ambulatory care facilities, work extended hours to a lesser degree but may find themselves on the job for 50 hours or more per week. In addition, many managers are on call on a regular basis. In this capacity, they receive phone calls at night and on weekends when there is a problem that requires intervention (e.g., loss of power in the facility, staffing shortages). At times, the manager may have to come to the facility during non-work hours, particularly if there is a crisis (e.g., job action by a group of employees).
  • Lack of ethnic diversity. Although minorities made up 32 percent of hospital patients in 2015, only 11 percent of executive-level leaders and only 19 percent of first- and mid-level management jobs were filled by minorities, according to the Institute for Diversity and Health Equity and the Health Research & Educational Trust. Medical associations have launched initiatives to increase the number of minorities in managerial positions, but the percentage of minorities still is much lower than their representation (about 37 percent) in the U.S. population.
  • Constant learning. The health care industry is undergoing major changes in terms of technology, patient care, organizational structures, and job duties and skill sets for workers (including managers). As a result, managers need to stay up to date throughout their careers by completing continuing education credits, as well as by renewing their certifications or earning new, in-demand designations.
  • Bureaucracy. Hospitals and other health care providers often have large bureaucracies—which sometimes makes it hard to get things done.