+1(978)310-4246 credencewriters@gmail.com

I’m working on a health & medical presentation and need support to help me understand better

Present a

12 – 15 slide PowerPoint

on the emerging health issue you picked. The number of slides exclude the title and reference pages. Substantial Speaker Notes are required throughout the entire presentation. Below you will find articles with more info on speaker notes.

Discuss the potential impact of the issue on a health care organization.

Analyze the potential risks of the issue on a health care organization.

Propose strategies for addressing the issue in health care settings.

Examine the role of the health care manager for the health issue.

Reference your readings and include a minimum of 5 peer-reviewed, scholarly, or similar articles.

Format your PowerPoint according to APA guidelines.

Review attached Grading Rubric, Presentation Tips, and Articles on Speaker Notes

Below are articles on what Speaker notes are and how to add them to your presentation:


(Links to an external site.)


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Grading Criteria: Introduction to Health Care Management
HSA 3180 – Dr. Kameka
Grading Criteria
Emerging Issues in Health Care Management
Select one emerging health issue from Chapter 17 in your textbook:
Vaccine Preventable Diseases
Human Trafficking
Violence in Health Care Settings
Medical Tourism
Present a 12 – 15 slide PowerPoint on the emerging health issue you picked. The number of slides
exclude the title and reference pages. Substantial Speaker Notes are required throughout the entire
Discuss the potential impact of the issue on a health care organization.
Analyze the potential risks of the issue on a health care organization.
Propose strategies for addressing the issue in health care settings.
Examine the role of the health care manager for the health issue.
Reference your readings and include a minimum of 5 peer-reviewed, scholarly, or similar articles.
Format your PowerPoint according to APA guidelines.
Points Additional
Earned Comments:
60 Percent
The PowerPoint includes the following:
ï‚· An introduction of the emerging health issue and some
background information on the topic.
ï‚· A discussion of the potential impact on the health care
ï‚· An analyzes of the potential risks for the health care organization.
ï‚· Strategies for addressing the issue in health care settings.
ï‚· The role of the health care manager.
ï‚· Substantial Speaker Notes throughout the presentation.
Points Additional
Earned Comments:
20 Percent
The PowerPoint is 12-15 slides (excluding title and reference pg.)
The introduction provides sufficient background on the topic and
previews major points.
The conclusion is logical, flows, and reviews the major points.
Cites 5 peer-reviewed, scholarly, or similar resources.
Grading Criteria: Introduction to Health Care Management
HSA 3180 – Dr. Kameka
Points Additional
Earned Comments:
20 Percent
The PowerPoint, including tables and graphs, headings, title
page, and reference page, is formatted according to APA
guidelines and meets requirements.
Intellectual property is recognized with in-text citations and a
reference page.
The PowerPoint effectively uses headings, font styles, and white
Rules of grammar, usage, and punctuation are followed; spelling
is correct.
Available Earned
Introduction to Health Care Management
Edited by
Sharon B. Buchbinder, RN, PhD
Professor and Program Coordinator
MS in Healthcare Management Program
School of Graduate and Professional Studies
Stevenson University
Owings Mills, Maryland
Nancy H. Shanks, PhD
Professor Emeritus
Department of Health Professions
Health Care Management Program
Metropolitan State University of Denver
Denver, Colorado
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Library of Congress Cataloging-in-Publication Data
Names: Buchbinder, Sharon Bell, editor. | Shanks, Nancy H., editor.
Title: Introduction to health care management / [edited by] Sharon B.
Buchbinder and Nancy H. Shanks.
Description: Third edition. | Burlington, Massachusetts : Jones & Bartlett
Learning, [2015] | Includes bibliographical references and index.
Identifiers: LCCN 2015040132 | ISBN 9781284081015 (paper)
Subjects: | MESH: Health Services Administration. | Efficiency, Organizational. | Health Care Costs. | Leadership.
Classification: LCC RA971 | NLM W 84.1 | DDC 362.1–dc23 LC record available at http://lccn.loc.gov/2015040132
Printed in the United States of America
20 19 18 17 16 10 9 8 7 6 5 4 3 2 1
We dedicate this book to our loving husbands,
Dale Buchbinder and Rick Shanks—
Who coached, collaborated, and coerced us to
An Overview of Health Care Management
Jon M. Thompson, Sharon B. Buchbinder, and Nancy H. Shanks
The Need for Managers and Their Perspectives
Management: Definition, Functions, and Competencies
Management Positions: The Control in the Organizational Heirarchy
Focus of Management: Self, Unit/Team, and Organization
Role of the Manager in Establishing and Maintaining Organizational Culture
Role of the Manager in Talent Management
Role of the Manager in Ensuring High Performance
Role of the Manager in Leadership Development and Succession Planning
Role of the Manager in Innovation and Change Management
Role of the Manager in Health Care Policy
Research in Health Care Management
Chapter Summary
Louis Rubino
Leadership vs. Management
History of Leadership in the U.S.
Contemporary Models
Leadership Styles
Leadership Competencies
Leadership Protocols
Barriers and Challenges
Ethical Responsibility
Important New Initiatives
Leaders Looking to the Future
Special Research Issues
Management and Motivation
Nancy H. Shanks and Amy Dore
Motivation—The Concept
History of Motivation
Theories of Motivation
A Bit More About Incentives and Rewards
Why Motivation Matters
Motivated vs. Engaged—Are the Terms the Same?
Measuring Engagement
Misconceptions About Motivation and Employee Satisfaction
Motivational and Engagement Strategies
Motivating Across Generations
Managing Across Generations
Research Opportunities in Management and Motivation
Organizational Behavior and Management Thinking
Sheila K. McGinnis
The Field of Organizational Behavior
Organizational Behavior’s Contribution to Management
Key Topics in Organizational Behavior
Organizational Behavior Issues in Health Organizations
Thinking: The “Inner Game” of Organizational Behavior
The Four Key Features of Thinking
Mental Representation: The Infrastucture of Thinking
Processing Information: Fundamental Thinking Habits
Decision Making, Problem Solving, and Biased Thinking Habits
Social Cognition and Socio-Emotional Intelligence
Research Opportunities in Organizational Behavior and Management Thinking
Strategic Planning
Susan Casciani
Purpose and Importance of Strategic Planning
The Planning Process
SWOT Analysis
Strategy Identification and Selection
Rollout and Implementation
Outcomes Monitoring and Control
Strategy Execution
Strategic Planning and Execution: The Role of the Health Care Manager
Opportunities for Research in Strategic Planning
Healthcare Marketing
Nancy K. Sayre
What Is Marketing?
A Brief History of Marketing in Health Care
The Strategic Marketing Process
Understanding Marketing Management
Health Care Buyer Behavior
Marketing Mix
Marketing Plan
Ethics and Social Responsibility
Opportunities for Research in Health Care Marketing
Quality Improvement Basics
Eric S. Williams, Grant T. Savage, and Patricia A. Patrician
Defining Quality in Health Care
Why Is Quality Important?
The Relevance of Health Information Technology in Quality Improvement
Quality Improvement Comes (Back) to America
Leaders of the Quality Movement
Baldrige Award Criteria: A Strategic Framework for Quality Improvement
Common Elements of Quality Improvement
Three Approaches to Quality Improvement
Quality Improvement Tools
Opportunities for Research in Health Care Quality
Information Technology
Nancy H. Shanks and Sharon B. Buchbinder
Information Systems Used by Managers
The Electronic Medical Record (EMR)
The Challenges to Clinical System Adoption
The Future of Health Care Information Technology
The Impact of Information Technology on the Health Care Manager
Opportunities for Research on Health Care Professionals
Financing Health Care and Health Insurance
Nancy H. Shanks
Introduction to Health Insurance
Brief History of Health Insurance
Characteristics of Health Insurance
Private Health Insurance Coverage
The Evolution of Social Insurance
Major “Players” in the Social Insurance Arena
Statistics on Health Insurance Coverage and Costs
Those Not Covered—The Uninsured
Opportunities for Research on Emerging Issues
CHAPTER 10 Managing Costs and Revenues
Kevin D. Zeiler
What Is Financial Management and Why Is It Important?
Tax Status of Health Care Organizations
Financial Governance and Responsibility Structure
Managing Reimbursements from Third-Party Payers
Coding in Health Care
Controlling Costs and Cost Accounting
Setting Charges
Managing Working Capital
Managing Accounts Receivable
Managing Materials and Inventory
Managing Budgets
Opportunities for Research on Managing Costs and Revenues
CHAPTER 11 Managing Health Care Professionals
Sharon B. Buchbinder and Dale Buchbinder
Registered Nurses
Licensed Practical Nurses/Licensed Vocational Nurses
Nursing Assistants and Orderlies
Home Health Aides
Midlevel Practitioners
Allied Health Professionals
Opportunities for Research on Health Care Professionals
CHAPTER 12 The Strategic Management of Human Resources
Jon M. Thompson
Environmental Forces Affecting Human Resources Management
Understanding Employees as Drivers of Organizational Performance
Key Functions of Human Resources Management
Workforce Planning/Recruitment
Employee Retention
Research in Human Resources Management
CHAPTER 13 Teamwork
Sharon B. Buchbinder and Jon M. Thompson
What Is a Team?
The Challenge of Teamwork in Health Care Organizations
The Benefits of Effective Health Care Teams
The Costs of Teamwork
Electronic Tools and Remote and Virtual Teams
Face to Face Versus Virtual Teams
Real-World Problems and Teamwork
Who’s on the Team?
Emotions and Teamwork
Team Communication
Methods of Managing Teams of Health Care Professionals
Opportunities for Research on Emerging Issues
CHAPTER 14 Addressing Health Disparities: Cultural Proficiency
Nancy K. Sayre
Changing U.S. Demographics and Patient Populations
Addressing Health Disparities by Fostering Cultural Competence in Health
Care Organizations
Best Practices
Addressing Health Disparities by Enhancing Public Policy
Opportunities for Research on Health Disparities and Cultural Proficiency
CHAPTER 15 Ethics and Law
Kevin D. Zeiler
Legal Concepts
Tort Law
Contract Law
Ethical Concepts
Patient and Provider Rights and Responsibilities
Legal/Ethical Concerns in Managed Care
Biomedical Concerns
Beginning- and End-of-Life Care
Opportunities for Research in Health Care Ethics and Law
CHAPTER 16 Fraud and Abuse
Kevin D. Zeiler
What Is Fraud and Abuse?
The Social Security Act and the Criminal-Disclosure Provision
The Emergency Medical Treatment and Active Labor Act
Antitrust Issues
Physician Self-Referral/Anti-Kickback/Safe Harbor Laws
Management Responsibility for Compliance and Internal Controls
Corporate Compliance Programs
Opportunities for Research in Fraud and Abuse
CHAPTER 17 Special Topics and Emerging Issues in Health Care Management
Sharon B. Buchbinder and Nancy H. Shanks
Re-Emerging Outbreaks, Vaccine Preventable Diseases, and Deaths
Bioterrorism in Health Care Settings
Human Trafficking
Violence in Health Care Settings
Medical Tourism
Consumer-Directed Health Care
Opportunities for Research on Emerging Issues
CHAPTER 18 Health Care Management Case Studies and Guidelines
Sharon B. Buchbinder, Donna M. Cox, and Susan Casciani
Case Study Analysis
Case Study Write-Up
Team Structure and Process for Completion
Metro Renal—Case for Chapters 12 and 2
United Physician Group—Case for Chapters 5, 9, 11, and 15
Piecework—Case for Chapters 9 and 10
Building a Better MIS-Trap—Case for Chapter 8
Death by Measles—Case for Chapters 17, 11, and 15
Full Moon or Bad Planning?—Case for Chapters 17, 11, and 15
How Do We Handle a Girl Like Maria?—Case for Chapters 17 and 4
The Condescending Dental Hygienist—Case for Chapters 7, 12, 15, and 4
The “Easy” Software Upgrade at Delmar Ortho—Case for Chapters 8 and 13
The Brawler—Case for Chapters 11, 12, and 17
I Love You…Forever—Case for Chapters 17, 12, and 11
Managing Health Care Professionals—Mini-Case Studies for Chapter 11
Problems with the Pre-Admission Call Center—Case for Chapters 13 and 10
Such a Nice Young Man—Case for Chapters 17, 11, and 12
Sundowner or Victim?—Case for Chapters 15 and 17
Last Chance Hospital—Case for Chapters 5 and 6
The Magic Is Gone—Case for Chapters 3, 12, and 13
Set Up for Failure?—Case for Chapter 3
Sustaining an Academic Food Science and Nutrition Center Through
Management Improvement—Case for Chapters 2 and 12
Giving Feedback—Empathy or Attributions?—Case for Chapter 4
Socio-Emotional Intelligence Exercise: Understanding and Anticipating Major
Change—Case for Chapter 4
Madison Community Hospital Addresses Infection Prevention—Case for
Chapters 7 and 13
Trouble with the Pharmacy—Case for Chapter 7
Emotional Intelligence in Labor and Delivery—Case for Chapters 2, 12, and 13
Communication of Patient Information During Transitions in Care—Case for
Chapters 7 and 12
Multidrug-Resistant Organism (MDRO) in a Transitional Care Unit—Case for
Chapters 7 and 12
Are We Culturally Aware or Not?—Case for Chapters 14 and 5
Patients “Like” Social Media—Case for Chapters 6 and 5
Where Do You Live? Health Disparities Across the United States—Case for
Chapter 14
My Parents Are Turning 65 and Need Help Signing Up for Medicare—Case for
Chapter 9
Newby Health Systems Needs Health Insurance—Case for Chapter 9
To Partner or Not to Partner with a Retail Company—Case for Chapters 17, 5,
and 6
Wellness Tourism: An Option for Your Organization?—Case for Chapters 17
and 5
Conflict in the Capital Budgeting Process at University Medical Center: Let’s
All Just Get Along—Case for Chapter 10
The New Toy at City Medical Center—Case for Chapters 11 and 13
Recruitment Challenge for the Middle Manager—Case for Chapters 2 and 12
I Want to Be a Medical Coder—Case for Chapter 10
Managing Costs and Revenues at Feel Better Pharmacy—Case for Chapter 10
Who You Gonna Call?—Case for Chapter 16
You Will Do What You Are Told—Case for Chapter 15
In the U.S., health care is the largest industry and the second-largest employer, with more than 11
million jobs. This continuous growth trend is a result of many consequences, including: the large, aging
Baby Boomer population, whose members are remaining active later in life, contributing to an increase
in the demand for medical services; the rapidly changing financial structure and increasingly complex
regulatory environment of health care; the integration of health care delivery systems, restructuring of
work, and an increased focus on preventive care; and the ubiquitous technological innovations, requiring
unceasing educational training and monitoring.
Given this tremendous growth and the aforementioned causes of it, it is not surprising that among
the fastest-growing disciplines, according to federal statistics, is health care management, which is
projected to grow 23% in the next decade. Supporting this growth are the increasing numbers of
undergraduate programs in health care management, health services administration, and health planning
and policy—with over 300 programs in operation nationwide today.
The health care manager’s job description is constantly evolving to adapt to this hyper-turbulent
environment. Health care managers will be called on to improve efficiency in health care facilities and
the quality of the care provided; to manage, direct, and coordinate health services in a variety of settings,
from long-term care facilities and hospitals to medical group practices; and to minimize costs and
maximize efficiencies, while also ensuring that the services provided are the best possible.
As the person in charge of a health care facility, a health care administrator’s duties can be varied and
complex. Handling such responsibilities requires a mix of business administration skills and knowledge
of health services, as well as the federal and state laws and regulations that govern the industry.
Written by leading scholars in the field, this compendium provides future and current health care
managers with the foundational knowledge needed to succeed. Drs. Buchbinder and Shanks, with their
many years of clinical, practitioner, administration, and academic experience, have assembled experts in
all aspects of health care management to share their knowledge and experiences. These unique
viewpoints, shared in both the content and case studies accompanying each chapter, provide valuable
insight into the health care industry and delve into the core competencies required of today’s health care
managers: leadership, critical thinking, strategic planning, finance and accounting, managing human
resources and professionals, ethical and legal concerns, and information and technology management.
Contributing authors include clinicians, administrators, professors, and students, allowing for a variety
of perspectives.
Faculty will also benefit from the depth and breadth of content coverage spanning all classes in an
undergraduate health care management curriculum. Its most appropriate utility may be found in
introductory management courses; however, the vast array of cases would bring value to courses in
health care ethics, managerial finance, quality management, and organizational behavior.
This text will serve as a cornerstone document for students in health management educational
programs and provide them with the insight necessary to be effective health care managers. Students will
find this textbook an indispensable resource to utilize both during their academic programs, as well as
when they enter the field of health care management. It is already on its way to becoming one of the
“classics” in the field!
Dawn Oetjen, PhD
Associate Dean, Administration and Faculty Affairs
College of Health and Public Affairs
University of Central Florida
Orlando, FL
The third edition of Introduction to Health Care Management is driven by our continuing desire to have an
excellent textbook that meets the needs of the health care management field, health care management
educators, and students enrolled in health care management programs around the world. The
inspiration for the first edition of this book came over a good cup of coffee and a deep-seated
unhappiness with the texts available in 2004. This edition builds on the strengths of the first two editions
and is based on an ongoing conversation with end users—instructors and students—from all types of
higher education institutions and all types of delivery modalities. Whether your institution is a
traditional “bricks and mortar” school or a fully online one, this book and its ancillary materials are
formatted for your ease of use and adoption.
For this edition, many of the same master teachers and researchers with expertise in each topic
revised and updated their chapters. Several new contributors stepped forward and wrote completely new
cases for this text because we listened to you, our readers and users. With a track record of more than
eight years in the field, we learned exactly what did or did not work in the classrooms and online, so we
further enhanced and refined our student- and professor-friendly textbook. We are grateful to all our
authors for their insightful, well-written chapters and our abundant, realistic case studies.
As before, this textbook will be useful to a wide variety of students and programs. Undergraduate
students in health care management, nursing, public health, nutrition, athletic training, and allied health
programs will find the writing to be engaging. In addition, students in graduate programs in disciplinespecific areas, such as business administration, nursing, pharmacy, occupational therapy, public
administration, and public health, will find the materials both theory-based and readily applicable to
real-world settings. With four decades of experience in higher education, we know first and foremost
that teaching and learning are not solo sports, but a team effort—a contact sport. There must be a giveand-take between the students and the instructors for deep learning to take place. This text uses active
learning methods to achieve this goal. Along with lively writing and content critical for a foundation in
health care management, this third edition continues to provide realistic information that can be applied
immediately to the real world of health care management. In addition to revised and updated chapters
from the second edition, there are learning objectives, discussion questions, and case studies included for
each chapter, with additional instructors’ resources online and Instructor’s Guides for all of the case
studies. PowerPoint slides, Test Bank items, and research sources are also included for each chapter, as
well as a glossary. A sample syllabus is also provided. Specifically, the third edition contains:
Significantly revised chapters on organizational behavior and management thinking, quality
improvement, and information technology.
Revisions and updates to all chapters, including current data and recent additions to the literature.
A new emphasis on research that is ongoing in each of the areas of health care.
A new chapter on a diverse group of emerging issues in health care management including: reemerging outbreaks, vaccine-preventable diseases, and deaths; bioterrorism in health care settings;
human trafficking; violence in health care settings; medical tourism; and consumer-directed health
Forty cases in the last chapter, 26 of which are new or totally revised for this edition. They cover a
wide variety of settings and an assortment of health care management topics. At the end of each
chapter, at least one specific case study is identified and linked to the content of that chapter. Many
chapters have multiple cases.
Guides for all 40 cases provided with online materials. These will be beneficial to instructors as they
evaluate student performance and will enable professors at every level of experience to hit the
ground running on that first day of classes.
Totally revised test banks for each chapter, providing larger pools of questions and addressing our
concerns that answers to the previous test banks could be purchased online.
Never underestimate the power of a good cup of joe. We hope you enjoy this book as much as we
enjoyed revising it. May your classroom and online discussions be filled with active learning experiences,
may your teaching be filled with good humor and fun, and may your coffee cup always be full.
Sharon B. Buchbinder, RN, PhD
Stevenson University
Nancy H. Shanks, PhD
Metropolitan State University of Denver
This third edition is the result of what has now been a 10-year process involving many of the leaders in
excellence in undergraduate health care management education. We continue to be deeply grateful to
the Association of University Programs in Health Administration (AUPHA) faculty, members, and staff
for all the support, both in time and expertise, in developing the proposal for this textbook and for
providing us with excellent feedback for each edition.
More than 20 authors have made this contributed text a one-of-a-kind book. Not only are our authors
expert teachers and practitioners in their disciplines and research niches, they are also practiced teachers
and mentors. As we read each chapter and case study, we could hear the voices of each author. It has
been a privilege and honor to work with each and every one of them: Mohamad Ali, Dale Buchbinder,
Susan Casciani, Donna Cox, Amy Dore, Brenda Freshman, Callie Heyne, Ritamarie Little, Sheila
McGinnis, Mike Moran, Patricia Patrician, Lou Rubino, Sharon Saracino, Grant Savage, Nancy Sayre,
Windsor Sherrill, Jon Thompson, Eric Williams, and Kevin Zeiler.
And, finally, and never too often, we thank our husbands, Dale Buchbinder and Rick Shanks, who
listened to long telephone conversations about the book’s revisions, trailed us to meetings and dinners,
and served us wine with our whines. We love you and could not have done this without you.
About the Editors
Sharon B. Buchbinder, RN, PhD, is currently Professor and Program Coordinator of the MS in
Healthcare Management Program at Stevenson University in Owings Mills, Maryland. Prior to this, she
was Professor and Chair of the Department of Health Science at Towson University and President of
the American Hospital Management Group Corporation, MASA Healthcare Co., a health care
management education and health care delivery organization based in Owings Mills, Maryland. For
more than four decades, Dr. Buchbinder has worked in many aspects of health care as a clinician,
researcher, association executive, and academic. With a PhD in public health from the University of
Illinois School of Public Health, she brings this blend of real-world experience and theoretical
constructs to undergraduate and graduate face-to-face and online classrooms, where she is constantly
reminded of how important good teaching really is. She is past chair of the Board of the Association of
University Programs in Health Administration (AUPHA) and coauthor of the Bugbee Falk Award–
winning Career Opportunities in Health Care Management: Perspectives from the Field. Dr. Buchbinder also
coauthors Cases in Health Care Management with Nancy Shanks and Dale Buchbinder.
Nancy H. Shanks, PhD, has extensive experience in the health care field. For 12 years, she worked as
a health services researcher and health policy analyst and later served as the executive director of a grantmaking, fund-raising foundation that was associated with a large multihospital system in Denver. During
the last 20 years, Dr. Shanks has been a health care administration educator at Metropolitan State
University of Denver, where she has taught a variety of undergraduate courses in health services
management, organization, research, human resources management, strategic management, and law.
She is currently an Emeritus Professor of Health Care Management and an affiliate faculty member,
after having served as Chair of the Department of Health Professions for seven years. Dr. Shanks’s
research interests have focused on health policy issues, such as providing access to health care for the
Mohamad A. Ali, MBA, MHA, CBM
Healthcare Strategy Consultant
MASA Healthcare, LLC
Washington, DC
Dale Buchbinder, MD, FACS
Chairman, Department of Surgery and Clinical Professor of Surgery
The University of Maryland Medical School
Good Samaritan Hospital
Baltimore, MD
Susan Casciani, MSHA, MBA, FACHE
Adjunct Professor
Stevenson University
Owings Mills, MD
Donna M. Cox, PhD
Professor and Director
Alcohol, Tobacco, and Other Drugs Prevention Center
Department of Health Science
Towson University
Towson, MD
Amy Dore, DHA
Associate Professor, Health Care Management Program
Department of Health Professions
Metropolitan State University of Denver
Denver, CO
Brenda Freshman, PhD
Associate Professor
Health Administration Program
California State University, Long Beach
Long Beach, CA
Callie E. Heyne, BS
Research Associate
Clemson University
Clemson, SC
Ritamarie Little, MS, RD
Associate Director
Marilyn Magaram Center for Food Science, Nutrition, & Dietetics
California State University, Northridge
Northridge, CA
Sheila K. McGinnis, PhD
Healthcare Transformation Director
City College
Montana State University, Billings
Billings, MT
Michael Moran, DHA
Adjunct Faculty
School of Business
University of Colorado, Denver
Denver, CO
Patricia A. Patrician, PhD, RN, FAAN
Colonel, U.S. Army (Retired)
Donna Brown Banton Endowed Professor
School of Nursing
University of Alabama, Birmingham
Birmingham, AL
Louis Rubino, PhD, FACHE
Professor & Program Director
Health Administration Program
Health Sciences Department
California State University, Northridge
Northridge, CA
Sharon Saracino, RN, CRRN
Patient Safety Officer
Nursing Department
Allied Services Integrated Health Care System–Heinz Rehab
Wilkes-Barre, PA
Grant T. Savage, PhD
Professor of Management
Management, Information Systems, & Quantitative Methods Department
University of Alabama, Birmingham
Birmingham, AL
Nancy K. Sayre, DHEd, PA, MHS
Department Chair
Department of Health Professions
Coordinator, Health Care Management Program
Assistant Professor, Health Care Management Program
Metropolitan State University of Denver
Denver, CO
Windsor Westbrook Sherrill, PhD
Professor of Public Health Sciences
Associate Vice President for Health Research
Clemson University
Clemson, SC
Jon M. Thompson, PhD
Professor, Health Services Administration
Director, Health Services Administration Program
James Madison University
Harrisonburg, VA
Eric S. Williams, PhD
Associate Dean of Assessment and Continuous Improvement
Professor of Health Care Management
Minnie Miles Research Professor
Culverhouse College of Commerce
University of Alabama
Tuscaloosa, AL
Kevin D. Zeiler, JD, MBA, EMT-P
Associate Professor, Health Care Management Program
Department of Health Professions
Metropolitan State University of Denver
Denver, CO
An Overview of Health Care Management
Jon M. Thompson, Sharon B. Buchbinder, and Nancy H. Shanks
By the end of this chapter, the student will be able to:
Define healthcare management and the role of the health care manager;
Differentiate among the functions, roles, and responsibilities of health care managers;
Compare and contrast the key competencies of health care managers; and
Identify current areas of research in health care management.
Any introductory text in health care management must clearly define the profession of health care
management and discuss the major functions, roles, responsibilities, and competencies for health care
managers. These topics are the focus of this chapter. Health care management is a growing profession
with increasing opportunities in both direct care and non–direct care settings. As defined by Buchbinder
and Thompson (2010, pp. 33–34), direct care settings are “those organizations that provide care
directly to a patient, resident or client who seeks services from the organization.” Non-direct care
settings are not directly involved in providing care to persons needing health services, but rather
support the care of individuals through products and services made available to direct care settings. The
Bureau of Labor Statistics (BLS, 2014) indicates health care management is one of the fastest-growing
occupations, due to the expansion and diversification of the health care industry. The BLS projects that
employment of medical and health services managers is expected to grow 23% from 2012 to 2022, faster
than the average for all occupations (see Figure 1-1).
These managers are expected to be needed in both inpatient and outpatient care facilities, with the
greatest growth in managerial positions occurring in outpatient centers, clinics, and physician practices.
Hospitals, too, will experience a large number of managerial jobs because of the hospital sector’s large
size. Moreover, these estimates do not reflect the significant growth in managerial positions in non–
direct care settings, such as consulting firms, pharmaceutical companies, associations, and medical
equipment companies. These non–direct care settings provide significant assistance to direct care
organizations, and since the number of direct care managerial positions is expected to increase
significantly, it is expected that growth will also occur in managerial positions in non–direct care
Health care management is the profession that provides leadership and direction to organizations
that deliver personal health services and to divisions, departments, units, or services within those
organizations. Health care management provides significant rewards and personal satisfaction for those
who want to make a difference in the lives of others. This chapter gives a comprehensive overview of
health care management as a profession. Understanding the roles, responsibilities, and functions carried
out by health care managers is important for those individuals considering the field to make informed
decisions about the “fit.” This chapter provides a discussion of key management roles, responsibilities,
and functions, as well as management positions at different levels within health care organizations. In
addition, descriptions of supervisory level, mid-level, and senior management positions within different
organizations are provided.
FIGURE 1-1 Occupations with the Most New Jobs in Hospitals, Projected 2012–2022. Employment
and Median Annual Wages, May 2013
Source: U.S. Bureau of Labor Statistics, Employment Projections program (projected new jobs, 2012–2022) and Occupational
Employment Statistics Survey (employment and median annual wages, May 2013).
Health care organizations are complex and dynamic. The nature of organizations requires that managers
provide leadership, as well as the supervision and coordination of employees. Organizations were created
to achieve goals beyond the capacity of any single individual. In health care organizations, the scope and
complexity of tasks carried out in provision of services are so great that individual staff operating on their
own could not get the job done. Moreover, the necessary tasks in producing services in health care
organizations require the coordination of many highly specialized disciplines that must work together
seamlessly. Managers are needed to ensure 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.
Health care managers are appointed to positions of authority, where they shape the organization by
making important decisions. Such decisions relate, for example, to recruitment and development of staff,
acquisition of technology, service additions and reductions, and allocation and spending of financial
resources. Decisions made by health care managers not only focus on ensuring that the patient receives
the most appropriate, timely, and effective services possible, but also address achievement of
performance targets that are desired by the manager. Ultimately, decisions made by an individual
manager impact the organization’s overall performance.
Managers must consider two domains as they carry out various tasks and make decisions (Thompson,
2007). These domains are termed external and internal domains (see Table 1-1). The external domain
refers to the influences, resources, and activities that exist outside the boundary of the organization but
that significantly affect the organization. These factors include community needs, population
characteristics, and reimbursement from commercial insurers, as well as government plans, such as the
Children’s Health Insurance Plans (CHIP), Medicare, and Medicaid. The internal domain refers to
those areas of focus that managers need to address on a daily basis, such as ensuring the appropriate
number and types of staff, financial performance, and quality of care. These internal areas reflect the
operation of the organization where the manager has the most control. Keeping the dual perspective
requires significant balance and effort on the part of management in order to make good decisions.
As discussed earlier, management is needed to support and coordinate the services provided within
health care organizations. Management has been defined as 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 (Longest, Rakich, & Darr, 2000). Implicit
in the definition is that managers work through and with other people, carrying out technical and
interpersonal activities to achieve the desired objectives of the organization. Others have stated that a
manager is anyone in the organization who supports and is responsible for the work performance of one
or more other persons (Lombardi & Schermerhorn, 2007).
While most beginning students of health care management tend to focus on the role of the senior
manager or lead administrator of an organization, it should be realized that management occurs through
many others who may not have “manager” in their position title. Examples of some of these managerial
positions in health care organizations include supervisor, coordinator, and director, among others (see
Table 1-2). These levels of managerial control are discussed in more detail in the next section.
Managers implement six management functions as they carry out the process of management
(Longest et al., 2000):
Planning: This function requires the manager to set a direction and determine what needs to be
accomplished. It means setting priorities and determining performance targets.
Organizing: This management function refers to the overall design of the organization or the
specific division, unit, or service for which the manager is responsible. Furthermore, 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.
Staffing: This function refers to acquiring and retaining human resources. It also refers to developing
and maintaining the workforce through various strategies and tactics.
Controlling: This function refers to monitoring staff activities and performance and taking the
appropriate actions for corrective action to increase performance.
Directing: The focus in this function is on initiating action in the organization through effective
leadership and motivation of, and communication with, subordinates.
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
In order to effectively carry out these functions, the manager needs to possess several key
competencies. Katz (1974) identified key competencies of the effective manager, including conceptual,
technical, and interpersonal skills. The term competency refers to a state in which an individual has the
requisite or adequate ability or qualities to perform certain functions (Ross, Wenzel, & Mitlyng, 2002).
These are defined as follows:
Conceptual skills are 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 or
determines a strategy to reduce patient complaints regarding food service.
Technical skills are those skills that reflect expertise or ability to perform a specific work task.
Examples: a manager develops and implements a new incentive compensation program for staff or
designs and implements modifications to a computer-based staffing model.
Interpersonal skills are 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 expectation or communicates to
subordinates the desired performance level for a service for the next fiscal year.
Management positions within health care organizations are not confined to the top level; because of the
size and complexity of many health care organizations, management positions are found throughout the
organization. Management positions exist at the lower, middle, and upper levels; the upper level is
referred to as senior management. The hierarchy of management means that authority, or power, is
delegated downward in the organization, and lower-level managers have less authority than higher-level
managers, whose scope of responsibility is much greater. For example, a vice president of Patient Care
Services in a hospital may be in charge of several different functional areas, such as nursing, diagnostic
imaging services, and laboratory services; in contrast, a director of Medical Records—a lower-level
position—has responsibility only for the function of patient medical records. Furthermore, a supervisor
within the Environmental Services department may have responsibility for only a small housekeeping
staff, whose work is critical, but confined to a defined area of the organization. Some managerial
positions, such as those discussed previously, are line manager positions because the manager supervises
other employees; other managerial positions are staff manager positions because they carry out work
and advise their bosses, but they do not routinely supervise others. Managerial positions also vary in
terms of required expertise or experience. Some positions require extensive knowledge of many
substantive areas and significant working experience, and other positions are more appropriate for entrylevel managers who have limited or no experience.
The most common organizational structure for health care organizations is a functional
organizational structure, whose key characteristic is a pyramid-shaped hierarchy that defines the
functions carried out and the key management positions assigned to those functions (see Figure 1-2).
The size and complexity of the specific health services organization will dictate the particular structure.
For example, 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. This structure is necessary due to the large scope of services provided and
the corresponding vast array of administrative and support services that are needed to enable the delivery
of clinical services. Other characteristics associated with this functional structure include a strict chain of
command and line of reporting, which ensure communication and assignment and evaluation of tasks are
carried out in a linear command and control environment. This structure offers key advantages, such as
specific divisions of labor and clear lines of reporting and accountability.
Other administrative structures have been adopted by health care organizations, usually in
combination with a functional structure. These include matrix, or 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. An example of the matrix method is when functional staff, such as nursing and
rehabilitation personnel, are assigned to a specific program, such as geriatrics, and they report for
programmatic purposes to the program director of the geriatrics department. Another example is when
clinical and administrative staff are assigned to a team investigating new services that is headed by a
marketing or business development manager. In both of these examples, management would lead staff
who traditionally are not under their direct administrative control. Advantages of this structure include
improved lateral communication and coordination of services, as well as pooled knowledge.
In service line management, a manager is appointed to head a specific clinical service line and has
responsibility and accountability for staffing, resource acquisition, budget, and financial control
associated with the array of services provided under that service line. Typical examples of service lines
include cardiology, oncology (cancer), women’s services, physical rehabilitation, and behavioral health
(mental health). Service lines can be established within a single organization or may cut across affiliated
organizations, such as within a hospital system where services are provided at several different affiliated
facilities (Boblitz & Thompson, 2005). Some facilities have found that the service line management
model for selected clinical services has resulted in many benefits, such as lower costs, higher quality of
care, and greater patient satisfaction, compared to other management models (Duffy & Lemieux, 1995).
The service line management model is usually implemented within an organization in conjunction with
a functional structure, as the organization may choose to give special emphasis and additional resources
to one or a few services lines.
FIGURE 1-2 Functional Organizational Structure
Effective health care management involves exercising professional judgment and skills and carrying out
the aforementioned managerial functions at three levels: self, unit/team, and organization wide. First and
foremost, the individual manager must be able to effectively manage himself or herself. This means
managing time, information, space, and materials; being responsive and following through with peers,
supervisors, and clients; maintaining a positive attitude and high motivation; and keeping a current
understanding of management techniques and substantive issues of health care management. Drucker
(2005) suggests that managing yourself also involves knowing your strengths, how you perform, your
values, where you belong, and what you can contribute, as well as taking responsibility for your
relationships. Managing yourself also means developing and applying appropriate technical,
interpersonal, and conceptual skills and competencies and being comfortable with them, in order to be
able to effectively move to the next level—that of supervising others.
The second focus of management is the unit/team level. The expertise of the manager at this level
involves managing others in terms of effectively completing the work. Regardless of whether you are a
senior manager, mid-level manager, or supervisor, you will be “supervising” others as expected in your
assigned role. This responsibility includes assigning work tasks, review and modification of assignments,
monitoring and review of individual performance, and carrying out the management functions described
earlier to ensure excellent delivery of services. This focal area is where the actual work gets done.
Performance reflects the interaction of the manager and the employee, and it is incumbent on the
manager to do what is needed to shape the performance of individual employees. The focus of
management at this echelon recognizes the task interdependencies among staff and the close
coordination that is needed to ensure that work gets completed efficiently and effectively.
The third management focus is at the organizational level. This focal area reflects the fact that
managers must work together as part of the larger organization to ensure organization-wide
performance and organizational viability. In other words, the success of the organization depends upon
the success of its individual parts, and effective collaboration is needed to ensure that this occurs. The
range of clinical and nonclinical activities that occur within a health care organization requires that
managers who head individual units work closely with other unit managers to provide services. Sharing
of information, collaboration, and communication are essential for success. The hierarchy looks to the
contribution of each supervised unit as it pertains to the whole. Individual managers’ contributions to
the overall performance of the organization—in terms of various performance measures such as cost,
quality, satisfaction, and access—are important and measured.
Every organization has a distinct culture, known as the beliefs, attitudes, and behavior that are shared
among organizational members. Organizational culture is commonly defined as the character,
personality, and experience of organizational life i.e., what the organization really “is” (Scott, Mannion,
Davies, & Marshall, 2003). Culture prescribes the way things are done, and is defined, shaped, and
reinforced by the management team. All managers play a role in establishing the culture of a health care
organization, and in taking the necessary leadership action to sustain, and in some cases change, the
culture. Culture is shaped by the values, mission, and vision for the organization. Values are principles
the organization believes in and shape the organization’s purpose, goals, and day-to-day behaviors.
Adopted values provide the foundation for the organization’s activities and include such principles as
respect, quality service, and innovation. The mission of the organization is its fundamental purpose, or
what the organization seeks to achieve. The vision of the organization specifies the desired future state
for the organization and reflects what the organization wants to be known and recognized for in the
future. Statements of values, mission, and vision result from the organizational strategic planning
process. These statements are communicated widely throughout the organization and to the community
and shape organizational strategic and operational actions. Increasingly, organizations are establishing
codes of conduct or standards of behavior that all employees must follow (Studer, 2003). These
standards of behavior align with the values, mission, and vision. The role of managers in the oversight of
standards of behavior is critical in several respects: for setting expectations for staff behavior, modelling
the behavior, measuring staff performance, and improving staff performance. Mid-level and lower-level
managers are instrumental to organization-wide adoption and embracing of the culture as they
communicate desired behaviors and reinforce culture through modelling expectations through their own
behaviors. For example, a value of customer service or patient focus requires that managers ensure
proper levels of service by their employees via clarifying expectations and providing internal customer
service to their own staff and other managers. Furthermore, managers can measure and evaluate
employee compliance with organizational values and standards of behavior by reviewing employee
performance and working with staff to improve performance. Performance evaluation will be explored in
a later chapter in this text.
In order to effectively master the focal areas of management and carry out the required management
functions, management must have the requisite number and types of highly motivated employees. From
a strategic perspective, health care organizations compete for labor, and it is commonly accepted today
that high-performing health care organizations are dependent upon individual human performance, as
discussed further in Chapter 12. Many observers have advocated for health care organizations to view
their employees as strategic assets who can create a competitive advantage (Becker, Huselid, & Ulrich,
2001). Therefore, human resources management has been replaced in many health care organizations
with talent management. The focus has shifted to securing and retaining the talent needed to do the
job in the best way, rather than simply filling a role (Huselid, Beatty, & Becker, 2005). As a result,
managers are now focusing on effectively managing talent and workforce issues because of the link to
organizational performance (Griffith, 2009).
Beyond recruitment, managers are concerned about developing and retaining those staff who are
excellent performers. Many health care organizations are creating high-involvement organizations that
identify and meet employee needs through their jobs and the larger organizational work setting (Becker
et al., 2001). One of the critical responsibilities of managers in talent management is promoting
employee engagement, which describes the motivation and commitment of staff to contribute to the
organization. There are several strategies used by managers to develop and sustain employee
engagement, as well as to develop and maintain excellent performers. These include formal methods
such as offering training programs; providing leadership development programs; identifying employee
needs and measuring employee satisfaction through engagement surveys; providing continuing
education, especially for clinical and technical fields; and enabling job enrichment. In addition, managers
use informal methods such as conducting periodic employee reviews, soliciting employee feedback,
conducting rounds and employee huddles, offering employee suggestion programs, and other methods
of managing employee relations and engagement. These topics are explored in more detail in a later
chapter in this book.
At the end of the day, the role of the manager is to ensure that the unit, service, division, or organization
he or she leads achieves high performance. What exactly is meant by high performance? To understand
performance, one has to appreciate the value of setting and meeting goals and objectives for the
unit/service and organization as a whole, in terms of the work that is being carried out. Goals and
objectives are desired end points for activity and reflect strategic and operational directions for the
organization. They are specific, measurable, meaningful, and time oriented. Goals and objectives for
individual units should reflect the overarching needs and expectations of the organization as a whole
because, as the reader will recall, all entities are working together to achieve high levels of overall
organizational performance. Studer (2003) views the organization as needing to be results oriented, with
identified pillars of excellence as a framework for the specific goals of the organization. These pillars are
people (employees, patients, and physicians), service, quality, finance, and growth. Griffith (2000) refers
to high-performing organizations as being championship organizations—that is, they expect to perform
well on different yet meaningful measures of performance. Griffith further defines the “championship
processes” and the need to develop performance measures in each of the following: 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. For each championship process, the organization should establish measures of desired
performance that will guide the organization. Examples of measures include medication errors, surgical
complications, patient satisfaction, staff turnover rates, employee satisfaction, market share, profit
margin, and revenue growth, among others. In turn, respective divisions, units, and services will set
targets and carry out activities to address key performance processes. The manager’s job, ultimately, is to
ensure these targets are met by carrying out the previously discussed management functions. A control
process for managers has been advanced by Ginter, Swayne, and Duncan (2002) that describes five key
steps in the performance management process: set objectives, measure performance, compare
performance with objectives, determine reasons for deviation, and take corrective action. Management’s
job is to ensure that performance is maintained or, if below expectations, improved.
Stakeholders, including insurers, state and federal governments, and consumer advocacy groups, are
expecting, and in many cases demanding, acceptable levels of performance in health care organizations.
These groups want to make sure that services are provided in a safe, convenient, low-cost, and highquality environment. For example, The Joint Commission (formerly JCAHO) has set minimum
standards for health care facilities operations that ensure quality, the National Committee for Quality
Assurance (NCQA) has set standards for measuring performance of health plans, and the Centers for
Medicare and Medicaid Services (CMS) has established a website that compares hospital performance
along a number of critical dimensions. In addition, CMS has provided incentives to health care
organizations by paying for performance on measures of clinical care and not paying for care resulting
from never events i.e., shocking health outcomes that should never occur in a health care setting such
as wrong site surgery (e.g., the wrong leg) or hospital-acquired infections (Agency for Healthcare
Research and Quality, n.d.). Health insurers also have implemented pay-for-performance programs for
health care organizations based on various quality and customer service measures.
In addition to meeting the reporting requirements of the aforementioned organizations, many health
care organizations today use varying methods of measuring and reporting the performance measurement
process. Common methods include developing and using dashboards or balanced scorecards that allow
for a quick interpretation of organizational performance across a number of key measures (Curtright,
Stolp-Smith, & Edell, 2000; Pieper, 2005). Senior administration uses these methods to measure and
communicate performance on the total organization to the governing board and other critical
constituents. Other managers use these methods at the division, unit, or service level to profile its
performance. In turn, these measures are also used to evaluate managers’ performance and are
considered in decisions by the manager’s boss regarding compensation adjustments, promotions,
increased or reduced responsibility, training and development, and, if necessary, termination or
Because health care organizations are complex and experience challenges from internal and external
environments, the need for leadership skills of managers at all levels of the organization has become
paramount. Successful organizations that demonstrate high operational performance depend on strong
leaders (Squazzo, 2009). Senior executives have a primary role in ensuring managers throughout the
organization have the knowledge and skills to provide effective leadership to achieve desired levels of
organizational performance. Senior management also plays a key role in succession planning to ensure
vacancies at mid- and upper levels of the organization due to retirements, departures, and promotions
are filled with capable leaders. Therefore, key responsibilities of managers are to develop future leaders
through leadership development initiatives and to engage in succession planning.
Leadership development programs are broadly comprised of several specific organizational services
that are offered to enhance leadership competencies and skills of managerial staff in health care
organizations. Leadership development is defined as educational interventions and skill-building
activities designed to improve the leadership capabilities of individuals (Kim & Thompson, 2012;
McAlearney, 2005). Such initiatives not only serve to increase leadership skills and behaviors, but also
ensure stability within organizational talent and culture through career advancement and succession
planning (Burt, 2005). In order to embrace leadership development, managers provide technical and
psychological support to the staff through a range of leadership development activities:
Leadership development program: Training and leadership development on a variety of required
topics, through a formally designated program, using structured learning and competency-based
assessment using various formats, media, and locations (Kim & Thompson, 2012)
Courses on leadership and management: Didactic training through specific courses offered faceto-face, online, or in hybrid form (Garman, 2010; Kim & Thompson, 2012)
Mentoring: Formal methods used by the organization for matching aspiring leaders with mid-level
and senior executives to assist in their learning and personal growth (Garman, 2010; Landry &
Bewley, 2010)
Personal development coaching: Usually reserved for upper-level executives; these formal
organizational efforts assist in improving performance by shaping attitudes and behavior and
focusing on personal skills development (Garman, 2010; Scott, 2009)
Job enlargement: The offering of expanded responsibilities, developmental assignments, and special
projects to individuals to cultivate leadership skills for advancement advance within the
organization (Fernandez-Aaroz, 2014; Garman, 2010; Landry & Bewley, 2010)
360-degree performance feedback: Expensive, labor-intensive, and usually reserved for upper-level
executives; a multisource feedback approach where an individual staff member or manager receives
an assessment of performance from several key individuals (e.g., peers, superiors, other managers,
and subordinates) regarding performance and opportunities for improvement (Garman, 2010;
Landry & Bewley, 2010)
Leadership development programs have shown positive results. For example, health systems report
benefits such as improvement of skills and quality of the workforce, enhancing organizational efficiency
in educational activities, and reducing staff turnover and related expenses when leadership training is tied
to organization-wide strategic priorities (McAlearney, 2005). In addition, hospitals with leadership
development programs have been found to have higher volumes of patients, higher occupancy, higher
net patient revenue, and higher total profit margin when compared to hospitals without these programs
(Thompson & Kim, 2013). Studies have also shown that leadership development programs in health
systems are related to greater focus on employee growth and development, improved employee
retention, and greater focus on organizational strategic priorities (McAlearney, 2010). Finally, within a
single health system, a leadership development program led to greater market share, reduced employee
turnover, and improved core quality measures (Ogden, 2007). However, one of the key drawbacks to
leadership development programs is the cost of developing and operating the programs (Squazzo, 2009).
Due to the competitive nature of health care organizations and the need for highly motivated and
skilled employees, managers are faced with the challenge of succession planning for their organizations.
Succession planning refers to the concept of taking actions to ensure staff can move up in management
roles within the organization to replace those managers who retire or move to other opportunities in
other organizations. Succession planning has most recently been emphasized at the senior level of
organizations, in part due to the large number of retirements that are anticipated from Baby Boomer
chief executive officers (CEOs) (Burt, 2005). To continue the emphasis on high performance within
health care organizations, CEOs and other senior managers are interested in finding and nurturing
leadership talent within their organizations who can assume the responsibility and carry forward the
important work of these organizations.
Health care organizations are currently engaged in several practices to address leadership succession
needs. First, mentoring programs for junior management that includes the participation of senior
management have been advocated as a good way to prepare future health care leaders (Rollins, 2003).
Mentoring studies show that mentors view their efforts as helpful to the organization (Finley,
Ivanitskaya, & Kennedy, 2007). Some observers suggest having many mentors is essential to capturing
the necessary scope of expertise, experience, interest, and contacts to maximize professional growth
(Broscio & Scherer, 2003). Mentoring middle-level managers for success as they transition to their
current positions is also helpful in preparing those managers for future executive leadership roles
(Kubica, 2008).
A second method of succession planning is through formal leadership development programs. These
programs are intended to identify management potential throughout an organization by targeting
specific skill sets of individuals and assessing their match to specific jobs, such as vice president or chief
operating officer (COO). One way to implement this is through talent reviews, which, when done
annually, help create a pool of existing staff who may be excellent candidates for further leadership
development and skill strengthening through the establishment of development plans. Formal programs
that are being established by many health care organizations focus on high-potential people (Burt, 2005).
Thompson and Kim (2013) found that 48% of community hospitals offered a leadership development
program, and McAlearney (2010) reported that about 50% of hospital systems nationwide had an
executive-level leadership development program. However, many health care organizations have
developed programs that address leadership development at all levels of the organization, not just the
executive level, and require all managers to participate in these programs to strengthen their managerial
and leadership skills and to contribute to organizational performance.
Due to the pace of change in the health services industry and the complexity of health services
organizations, the manager plays a significant role in leading innovation and spearheading change
management. Health services organizations cannot remain static. The environmental forces discussed
earlier in this chapter strongly point to the need for organizations to respond and adapt to these external
influences. In addition, achieving and maintaining high performance outcomes or results is dependent
on making improvements to the organizational structure and processes. Moreover, managers are
encouraged to embrace innovation to identify creative ways to improve service and provide care
effectively and efficiently.
Innovation and change management are intricately related, but different, competencies. Hamel (2007)
describes management innovation and operational innovation. Management innovation addresses the
organization’s management processes as the practices and routines that determine how the work of
management gets conducted on a daily basis. These include such practices as internal communications,
employment assessment, project management, and training and development. In contrast, operational
innovation addresses the organization’s business processes. In the health care setting, these include
processes such as customer service, procurement of supplies and supply chain changes, care coordination
across staff, and development and use of clinical procedures and practices. Some operational innovation
is structural in nature and involves acquisition of information and clinical products, such as electronic
medical/health records, or a new device or procedure, such as robotic surgery or new medications
(Staren, Braun, & Denny, 2010). There are specific skills needed by managers to be innovators in
management. These skills include thinking creatively about ways to proactively change management and
operational practices to improve the organization. It also involves a willingness to test these innovative
practices and assess their impact. Also, a manager must facilitate recruitment and development of
employees who embrace creativity and innovation. Having innovative clinical and administrative staff is
critical to implementing operational innovation. A culture of innovation depends upon staff who are
generating ideas for operational innovation, and the manager is a linchpin in establishing a culture of
innovation that supports idea generation. Recent studies of innovative and creative companies found that
leaders should rely on all staff collaborating by helping one another and engaging in a dynamic process
of seeking and giving feedback, ideas, and assistance (Amabile, Fisher, & Pillemer, 2014). Several
barriers to innovation have been identified. These barriers include lack of an innovation culture that
supports idea generation, lack of leadership in innovation efforts, and high costs of making innovative
changes (Harrington & Voehl, 2010). In addition, formal rules and regulations, professional standards,
and administrative policies may all work against innovation (Dhar, Griffin, Hollin, & Kachnowski,
2012). Finally, daily priorities and inertia reflecting the status quo that cause managers to focus on
routines and day-to-day tasks limit staff ability to be creative, engage in discovery, and generate ideas
(Dhar et al., 2012).
Organizational change, or change management, is related to but different from innovation.
Organizational change is a structured management approach to improving the organization and its
performance. Knowledge of performance gaps is a necessary prerequisite to change management, and
managers must routinely assess their operational activities and performance and make adjustments in the
work structure and processes to improve performance (Thompson, 2010). Managing organizational
change has become a significant responsibility of managers and a key competency for health care
managers (Buchbinder & Thompson, 2010). Managing the change process within health care
organizations is critical because appropriately and systematically managing change can result in
improved organizational performance. However, change is difficult and the change process creates both
staff resistance and support for a change.
A process model of change management has been suggested by Longest et al. (2000). This rational,
problem-based model identifies four key steps in systematically understanding and managing the change
process: (1) identification of the need for change, (2) planning for implementing the change, (3)
implementing the change, and (4) evaluating the change.
There are several key management competencies that health care managers need to possess to
effectively manage change within their organizations. Thompson (2010) suggests that managers:
–Embrace change and be a change agent;
–Employ a change management process;
–Effectively address support and resistance to change;
–Use change management to make the organization innovative and successful in the future; and,
–Recruit staff and succession plan with change management in mind.
As noted earlier in this chapter, managers must consider both their external and internal domains as they
carry out management functions and tasks. One of the critical areas for managing the external world is to
be knowledgeable about health policy matters under consideration at the state and federal levels that
affect health services organizations and health care delivery. This is particularly true for senior-level
managers. This awareness is necessary to influence policy in positive ways that will help the organization
and limit any adverse impacts. Staying current with health care policy discussions, participating in
deliberations of health policy, and providing input where possible will allow health care management
voices to be heard. Because health care is such a popular yet controversial topic in the U.S. today,
continuing changes in health care delivery are likely to emanate from the legislative and policy processes
at the state and federal levels. For example, the Patient Protection and Affordable Care Act, signed into
law in 2010 as a major health care reform initiative, has had significant implications for health care
organizations in terms of patient volumes, reimbursement for previously uninsured patients, and the
movement to improve population health and develop value-based purchasing. Other recent federal
policy changes include cuts in Medicare reimbursement and increases in reporting requirements. State
legislative changes across the country affect reimbursement under Medicaid and the Children’s Health
Insurance Program, licensure of facilities and staff, certificate of need rules for capital expenditures and
facility and service expansions, and state requirements on mandated health benefits and modified
reimbursements for insured individuals that affect services offered by health care organizations.
In order to understand and influence health policy, managers must strive to keep their knowledge
current. This can be accomplished through targeted personal learning, networking with colleagues
within and outside of their organizations, and participating in professional associations, such as the
American College of Healthcare Executives and the Medical Group Management Association. These
organizations, and many others, monitor health policy discussions and advocate for their associations’
interests at the state and federal levels. Knowledge gained through these efforts can be helpful in shaping
health policy in accordance with the desires of health care managers.
Current research in management focuses on best practices. For example, the best practices of managers
and leaders in ensuring organizational performance has been the focus of work by McAlearney, Robbins,
Garman, and Song (2013) and Garman, McAlearney, Harrison, Song, and McHugh (2011). The best
practices identified by these researchers include staff engagement, staff acquisition and development,
staff frontline empowerment, and leadership alignment and development. Understanding what leaders
do to develop their staff and prepare lower-level managers for leadership roles has been a common
research focus as well. Leadership development programs have been examined in terms of their structure
and impact. McAlearney (2008) surveyed health care organizations and key informants to determine the
availability of leadership development programs and their role in improving quality and efficiency, and
found these programs enhanced the skills and quality of the workforce, improved efficiency in
educational development, and reduced staff turnover. A study of high-performing health organizations
found various practices are used to develop leaders internally, including talent reviews to identify
candidates for upward movement, career development planning, job rotations, and developmental
assignments (McHugh, Garman, McAlearney, Song, & Harrison, 2010). In addition, a 2010 study
examined leadership development in health and non-health care organizations and found best practices
included 360-degree performance evaluation, mentoring, coaching, and experiential learning (National
Center for Healthcare Leadership, 2010). A study of U.S. health systems found about half of health
systems offered a leadership development program and also found that leadership development
initiatives helped the systems focus on employee growth and development and improved employee
retention (McAlearney, 2010). As noted earlier in this chapter, some recent studies have examined the
characteristics of leadership development programs in hospitals, finding correlations of programs with
size, urban location, and not-for-profit ownership status (Kim and Thompson, 2012; Thompson and
Kim, 2013). A new area of management research is the participation of early careerists in leadership
development programs, and recent evidence shows that some leadership development activities are of
more interest to staff than others (Thompson and Temple, 2015). A number of important areas of
management research exist today, and include looking at the effect of leadership development training
on specific decision-making by managers, career progression due to participation in leadership
development, and the impact of collaboration among staff on firm innovation and performance
(Amabile, Fisher, & Pillemer, 2014).
The profession of health care management is challenging yet rewarding, and requires persons 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. In addition, managers 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 seniormanagement levels. The role of manager is critical to ensuring a high level of organizational
performance, and managers are also instrumental in establishing and maintaining organizational culture,
talent recruitment and retention, leadership development and succession planning, innovation and
change management, and shaping health care policy.
Note: Portions of this chapter were originally published as “Understanding Health Care
Management” in Career Opportunities in Healthcare Management: Perspectives from the Field, by
Sharon B. Buchbinder and Jon M. Thompson, and an adapted version of this chapter is reprinted
here with permission of the publisher.
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4. Compare and contrast three models of organizational design.
5. Why is the health care manager’s role in ensuring high performance so critical? Explain.
6. 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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Louis Rubino
By the end of this chapter, the student will be able to:
Distinguish between leadership and management;
Summarize the history of leadership in the U.S. from the 1920s to current times;
Compare and contrast leadership styles, competencies, and protocols;
Summarize old and new governance trends;
Analyze key barriers and challenges to successful leadership;
Provide a rationale for why health care leaders have a greater need for ethical behavior;
Explore important new initiatives requiring health care leaders’ engagement; and
Discuss special research issues related to leadership.
In any business setting, there must be leaders as well as managers. But are these the same people? Not
necessarily. There are leaders who are good managers and there are managers who are good leaders, but
usually neither case is the norm. In health care, this is especially important to recognize because of the
need for both. Health care is unique in that it is a service industry that depends on a large number of
highly trained personnel as well as trade workers. Whatever the setting, be it a hospital, a long-term care
facility, an ambulatory care center, a medical device company, an insurance company, an accountable
care organization, or some other health care entity, leaders as well as managers are needed to keep the
organization moving in a forward direction and, at the same time, maintain current operations. This is
done by leading and managing its people and assuring good business practices.
Leaders usually take a focus that is more external, whereas the focus of managers is more internal.
Even though they need to be sure their health care facility is operating properly, leaders tend to spend
the majority of their time communicating and aligning with outside groups that can benefit their
organizations (partners, community, vendors) or influence them (government, public agencies, media).
See Figure 2-1. There is crossover between leaders and managers across the various areas, though a
distinction remains for certain duties and responsibilities.
Usually the top person in the organization (e.g., Chief Executive Officer, Administrator, Director)
has full and ultimate accountability. This type of leader may be dictated by the current conditions faced
by the organization. A more strategic leader, who defines purpose and vision and aligns people,
processes, and values, may be needed. Or, a network leader, who could connect people across
disciplines, organizational departments, and regions, may be essential. Whichever type surfaces, there
will be several managers reporting to this person, all of whom have various functional responsibilities
for different areas of the organization (e.g., Chief Nursing Officer, Physician Director, Chief
Information Officer). These managers can certainly be leaders in their own areas, but their focus will be
more internal within the organization’s operations. They are the operational leaders of the
organization. Together, these three types of leaders/followers produce an interdependent leadership
system, a team which will prove more high performing in the current health care field (Maccoby,
Norman, Norman, & Margolies, 2013).
FIGURE 2-1 Leadership and Management Focus
Leaders have a particular set of competencies that require more forward thinking than those of
managers. Leaders need to set a vision or direction for the organization. They need to be able to
motivate their employees, as well as other stakeholders, so the business continues to exist and, hopefully,
thrive in periods of change. No industry is as dynamic as health care, with rapid change occurring due to
the complexity of the system and government regulations. Leaders are needed to keep the entity on
course and to maneuver around obstacles, like a captain commanding his ship at sea. Managers must
tend to the business at hand and make sure the staff is following proper procedures and meeting
established targets and goals. They need a different set of competencies. See Table 2-1.
Leaders have been around since the beginning of man. We think of the strongest male becoming the
leader of a caveman clan. In Plato’s time, the Greeks began to talk about the concept of leadership and
acknowledged the political system as critical for leaders to emerge in a society. In Germany during the
late 19th century, Sigmund Freud described leadership as unconscious exhibited behavior; later, Max
Weber identified how leadership is present in a bureaucracy through assigned roles. Formal leadership
studies in the U.S., though, have only been around for the last 100 years (Sibbet, 1997).
We can look at the decades spanning the 20th century to see how leadership theories evolved, placing
their center of attention on certain key components at different times (Northouse, 2016). These
emphases often matched or were adapted from the changes occurring in society.
With the industrialization of the U.S. in the 1920s, productivity was of paramount importance.
Scientific management was introduced, and researchers tried to determine which characteristics were
identified with the most effective leaders based on their units having high productivity. The Great Man
Theory was developed out of the idea that certain traits determined good leadership. The traits that
were recognized as necessary for effective leaders were ones that were already inherent in the person,
such as being male, being tall, being strong, and even being Caucasian. Even the idea that “you either
got it or you don’t” was supported by this theory, the notion being that a good leader had charisma.
Behaviors were not considered important in determining what made a good leader. This theory
discouraged anyone who did not have the specified traits from aspiring to a leadership position.
Fortunately, after two decades, businesses realized leadership could be enhanced through certain
conscious acts, and researchers began to study which behaviors would produce better results. Resources
were in short supply due to World War II, and leaders were needed who could truly produce good
results. This was the beginning of the Style Approach to Leadership. Rather than looking at only the
characteristics of the leader, researchers started to recognize the importance of two types of behaviors in
successful leadership: completing tasks and creating good relationships. This theory states leaders have
differing degrees of concern over each of these behaviors, and the best leaders would be fully attentive to
In the 1960s, American society had a renewed emphasis on helping all of its people and began a series
of social programs that still remain today. The two that impact health care directly, by providing
essential services, are Medicare for the elderly (age 65 and over) and the disabled and Medicaid for the
indigent population. The Situational Approach to Leadership then came into prominence and
supported this national concern. This set of theories focused on the leader changing his or her behavior
in certain situations in order to meet the needs of subordinates. This would imply a very fluid leadership
process whereby one can adapt one’s actions to an employee’s needs at any given time.
Not much later, researchers believed perhaps leaders should not have to change how they behaved in
a work setting, but instead the appropriate leaders should be selected from the very beginning. This is
the Contingency Theory of Leadership and was very popular in the 1970s. Under this theory, the
focus was on both the leader’s style as well as the situation in which the leader worked, thus building
upon the two earlier theories. This approach was further developed by what is known as the Path–Goal
Theory of Leadership. This theory still placed its attention on the leader’s style and the work situation
(subordinate characteristics and work task structure) but also recognized the importance of setting goals
for employees. The leader was expected to remove any obstacles in order to provide the support
necessary for them to achieve those goals.
In the later 1970s, the U.S. was coming out of the Vietnam War, in which many of its citizens did not
think the country should have been involved. More concern was expressed over relationships as the
society became more psychologically attuned to how people felt. The Leader–Member Exchange
Theory evolved over the concern that leadership was being defined by the leader, the follower, and the
context. This new way of looking at leadership focused on the interactions that occur between the
leaders and the followers. This theory claimed leaders could be more effective if they developed better
relationships with their subordinates through high-quality exchanges.
After Vietnam and a series of weak political leaders, Americans were looking for people to take charge
who could really make a difference. Charismatic leaders came back into vogue, as demonstrated by the
support shown to President Ronald Reagan, an actor turned politician. Unlike the Great Man Theory
earlier in the century, this time the leader had to have certain skills to transform the organization
through inspirational motivational efforts. Leadership was not centered upon transactional processes
that tied rewards or corrective actions to performance. Rather, the transformational leader could
significantly change an organization through its people by raising their consciousness, empowering
them, and then providing the nurturing needed as they produced the results desired.
In the late 1980s, the U.S. started to look more globally for ways to have better production. Total
Quality Management became a popular concept and arose from researchers studying Japanese principles
of managing production lines. In the health care setting, this was embraced through a process still used
today called Continuous Quality Improvement or Performance Improvement. In the decade to follow,
leaders assigned subordinates to a series of work groups in order to focus on a particular area of
production. Attention was placed on developing the team for higher level functioning and on how a
leader could create a work environment that could improve the performance of the team. Individual
team members were expendable, and the team entity was all important.
We have entered the 21st century with some of the greatest leadership challenges ever in the health
care field. Critical personnel shortages, limited resources, and increased governmental regulations
provide an environment that yearns for leaders who are attentive to the organization and its people, yet
can still address the big pi…
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