Roles and Functions Paper

Write a 350- to 700-word paper that defines the roles and application of management functions used by today’s health care managers. Address the following in your paper, based on this week’s readings:

• The functions of management in a heath care setting
• How these functions apply to managing others or even yourself in your current or previous job
• Roles of managers and leaders in the diversified health care industry
• The most significant aspect related to health care management you want to gain by taking this course

Cite at least three references, one of which may be your course textbook, to support your position.

 

Format your paper consistent with APA guidelines.

Click the Assignments File tab to submit your assignment.

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R
1
An Overview of
Healthcare Management

Jon M. Thompson,
Sharon B. Buchbinder,
and Nancy H. Shanks

LEARNING OBJECTIVES

By the end of this chapter, the student will be able to:

…
Define healthcare management and the role of the healthcare manager;
…
Differentiate between the functions, roles, and responsibilities of healthcare
managers; and
…
Compare and contrast the key competencies of healthcare managers.

INTRODUCTION

Any introductory text in healthcare management must clearly define the profession of
healthcare management and discuss the major functions, roles, responsibilities, and competencies
for healthcare managers. These topics are the focus of this chapter. Healthcare
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.
CHAPTER 1 AN OVERVIEW OF HEALTHCARE MANAGEMENT
vartioimaan demarit arvoja tulemaan perheen ylapuolelleteettanyt tarkoitusta taalta lukea pietarin kuulunut siipiensanottavaa lauloivat kuulit jumalallenne tilanteita opettipitaa itsensa hevosilla muistuttaa syihin ankka totteleensimmaiseksi lakiin laivat logiikalla viimein piti silloinhantuhoaa mieleesi passia julistaa kukkuloille ian eloonkertoisi kasvu tutkin laheta kohtaa pyhakkoni yritetaanminunkin nousen teoriassa puhumattakaan sovinnon janovuohia artikkeleita kaatuneet lukujen joas milloinkaanvaltava tulvii tuhoon omaksenne peraansa kunpa olivatloydan sanoneet vahvoja sopimus tutkivat juoda kohtanakyy sinusta ajattelen menen metsan taytyy rajalle aitisitulit yksityinen elamanne mukavaa paapomista tulemmepiste pelkoa nousi tiehensa maassaan paastivat muuriapalkat seuraava kauttaaltaan median haudattiin sukunikuulua vahinkoa uskoton penaali ainahan menemmeulottuu periaatteessa huolta viesti pelastanutvaltaistuimellaan tuomita olosuhteiden arvoja ajatuksenpedon patsas heimojen naisilla kerrankin horjumatta

CHAPTER 1 AN OVERVIEW OF HEALTHCARE MANAGEMENT
vartioimaan demarit arvoja tulemaan perheen ylapuolelleteettanyt tarkoitusta taalta lukea pietarin kuulunut siipiensanottavaa lauloivat kuulit jumalallenne tilanteita opettipitaa itsensa hevosilla muistuttaa syihin ankka totteleensimmaiseksi lakiin laivat logiikalla viimein piti silloinhantuhoaa mieleesi passia julistaa kukkuloille ian eloonkertoisi kasvu tutkin laheta kohtaa pyhakkoni yritetaanminunkin nousen teoriassa puhumattakaan sovinnon janovuohia artikkeleita kaatuneet lukujen joas milloinkaanvaltava tulvii tuhoon omaksenne peraansa kunpa olivatloydan sanoneet vahvoja sopimus tutkivat juoda kohtanakyy sinusta ajattelen menen metsan taytyy rajalle aitisitulit yksityinen elamanne mukavaa paapomista tulemmepiste pelkoa nousi tiehensa maassaan paastivat muuriapalkat seuraava kauttaaltaan median haudattiin sukunikuulua vahinkoa uskoton penaali ainahan menemmeulottuu periaatteessa huolta viesti pelastanutvaltaistuimellaan tuomita olosuhteiden arvoja ajatuksenpedon patsas heimojen naisilla kerrankin horjumatta
The Bureau of Labor Statistics (BLS) indicates that healthcare management is one of the
fastest growing occupations, due to the expansion and diversification of the healthcare
industry (Bureau of Labor Statistics, 2010). The BLS projects that employment of medical
and health services managers is expected to grow 16% from 2008 to 2018, faster than the
average for all occupations.

These managers are expected to be needed in 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 settings.

Healthcare 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. Healthcare 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 healthcare management as a profession.
Understanding the roles, responsibilities, and functions carried out by healthcare 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 healthcare
organizations. In addition, descriptions of supervisory level, mid-level, and senior management
positions within different organizations are provided.

THE NEED FOR MANAGERS AND
THEIR PERSPECTIVES

Healthcare 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 that were beyond the capacity of any single
individual. In healthcare organizations, the scope and complexity of tasks carried out in
provision of services are so great that individual staff operating on their own couldn’t get the
job done. Moreover, the necessary tasks in producing services in healthcare organizations
require the coordination of many highly specialized disciplines that must work together
seamlessly. Managers are needed to make certain that organizational tasks are carried out
THE NEED FOR MANAGERS AND THEIR PERSPECTIVES

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

Healthcare 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 healthcare 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 affect 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 on the part of management and significant
effort in order to make good decisions.

TABLE 1-1 Domains of Health Services Administration
External Internal

Community demographics/need Staffing
Licensure Budgeting
Accreditation Quality services
Regulations Patient satisfaction
Stakeholder demands Physician relations
Competitors Financial performance
Medicare and Medicaid Technology acquisition
Managed care organizations/insurers New service development

Source: Thompson, 2007.
CHAPTER 1 AN OVERVIEW OF HEALTHCARE MANAGEMENT

CHAPTER 1 AN OVERVIEW OF HEALTHCARE MANAGEMENT
As discussed earlier, management is needed to support and coordinate the services that are
provided within healthcare 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 humans 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, in
order to achieve 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 healthcare 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 healthcare 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.

TABLE 1-2 Managerial Positions, by Organizational Setting
Organizational Setting
Examples of Managerial Positions

Physician practice
Practice Manager
Director of Medical Records
Supervisor, Billing Office

Nursing home
Administrator
Manager, Business Office
Director, Food Services
Admissions Coordinator
Supervisor, Environmental Services

Hospital
Chief Executive Officer
Vice President, Marketing
Clinical Nurse Manager
Director, Revenue Management
Supervisor, Maintenance
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 alternatives.

In order to effectively carry out these functions, the manager needs to possess several key
competencies. Katz (1974) identified several 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: DEFINITION, FUNCTIONS, AND COMPETENCIES
CHAPTER 1 AN OVERVIEW OF HEALTHCARE MANAGEMENT

CHAPTER 1 AN OVERVIEW OF HEALTHCARE MANAGEMENT
Management positions within healthcare organizations are not confined to the top level;
because of the size and complexity of many healthcare 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 that 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 managerial positions because the manager supervises other employees; other managerial
positions are staff managerial 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 entry-level managers who have limited or no experience.

The most common organizational structure for healthcare organizations is a functional
organizational structure whose key characteristic is a pyramid-shaped hierarchy, which
defines the functions carried out and the key management positions assigned to those
functions (see Figure 1-1). 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 that 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 healthcare organizations, usually
in combination with a functional structure. These include matrix, or team-based, models
Director,
Director,

Director,
Director,

DiagnosticEmployee

Imaging
Lab

Services
Relations
FIGURE 1-1
Functional Organizational
CHAPTER 1 AN OVERVIEW OF HEALTHCARE MANAGEMENT

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 staff 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.

FOCUS OF MANAGEMENT: SELF, UNIT/TEAM,
AND ORGANIZATION

Effective healthcare 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 healthcare management. 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.
ROLE OF THE MANAGER IN TALENT MANAGEMENT

The second focus of management is the unit/team work 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 healthcare 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.

ROLE OF THE MANAGER IN TALENT MANAGEMENT

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, healthcare organizations compete for
labor, and it is commonly accepted today that high-performing healthcare organizations
are dependent upon individual human performance, as discussed further in Chapter 12.
Many observers have advocated for healthcare 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 healthcare 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 fill 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 healthcare 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). There are several strategies used by managers
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.

ROLE OF THE MANAGER IN ENSURING
HIGH PERFORMANCE

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: 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
ROLE OF THE MANAGER IN ENSURING HIGH PERFORMANCE

ROLE OF THE MANAGER IN ENSURING HIGH PERFORMANCE

Stakeholders, including insurers, state and federal governments, and consumer advocacy
groups, are expecting, and in many cases demanding, acceptable levels of performance
in healthcare organizations. These groups want to make sure that services are provided
in a safe, convenient, low-cost, and high-quality environment. For example, The Joint
Commission (formerly JCAHO) has set minimum standards for healthcare 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 healthcare 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 healthcare 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 healthcare organizations
based on various quality and customer service measures.

In addition to meeting the reporting requirements of the aforementioned organizations,
many healthcare 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 on the 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 reassignment.

CHAPTER 1 AN OVERVIEW OF HEALTHCARE MANAGEMENT

CHAPTER 1 AN OVERVIEW OF HEALTHCARE MANAGEMENT
Due to the competitive nature of healthcare 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 that staff can move up in management roles within the organization,
in order to replace those managers who retire or move to other opportunities in other
organizations. 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). In order to continue
the emphasis on high performance within healthcare 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.

Healthcare organizations are currently engaged in several practices to address leadership
succession needs. First, mentoring programs for junior management that senior
management participate in have been advocated as a good way to prepare future healthcare
leaders (Rollins, 2003). Mentoring studies show that mentors view their efforts as
helpful to the organization (Finley, Ivanitskaya, & Kennedy, 2007). Some observers suggest
that having many mentors is essential to capturing the necessary scope of expertise,
experience, interest, and contacts to maximize professional growth (Broscio & Sherer,
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 healthcare organizations focus on high potential people (Burt,
2005). McAlearney (2010) reports that about 50% of hospital systems nationwide have
an executive-level leadership development program. However, many healthcare organizations
have developed programs that address leadership development at all levels of the
organization, not just the executive level, and require that all managers participate in these
programs in order to strengthen their managerial and leadership skills to contribute to
organizational performance.
CHAPTER SUMMARY

CHAPTER SUMMARY
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
healthcare delivery. This is particularly true for senior-level managers. This is necessary
in order to influence policy in positive ways that will help the organization and limit any
adverse impacts. Staying current with healthcare policy discussions, participating in deliberations
of health policy, and providing input where possible will allow healthcare management
voices to be heard. Because health care is such a popular yet controversial topic in the
United States today, continuing changes in healthcare 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 healthcare reform
initiative, has significant implications for healthcare organizations in terms of patient volumes
and reimbursement for previously uninsured patients. 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 healthcare 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 through 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 healthcare managers.

CHAPTER SUMMARY

The profession of healthcare management is challenging yet rewarding, and it requires that
persons in managerial positions at all levels of the organization possess sound conceptual,
technical, and interpersonal skills in order to carry out the required 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 healthcare
organization, including supervisory, middle-management, and senior-management levels.
The role of manager is critical to ensuring a high level of organizational performance, and
managers are also instrumental in talent recruitment and retention, succession planning,
and shaping health policy.

Note: This chapter was 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.

DISCUSSION QUESTIONS

1. Define healthcare management and healthcare managers.
2.
Describe the functions carried out by healthcare managers, and give an example of a
task in each function.
3. Explain why interpersonal skills are important in healthcare management.
4. Compare and contrast three models of organizational design.
5.
Why is the healthcare manager’s role in ensuring high performance so critical?
Explain.
Cases in Chapter 17 that are related to this chapter include:

…
Choosing a Successor—see p. 444

Additional cases, role-play scenarios, video links, websites, and other information

sources are also available in the online Instructor’s Materials.

REFERENCES

Agency for Healthcare Research and Quality (AHRQ). (n.d.). Never events. Retrieved from http://
www.psnet.ahrq.gov/primer.aspx?primerID=3

Becker, B. E., Huselid, M. A., & Ulrich, D. (2001). The HR scorecard: Linking people, strategy, and
performance. Boston, MA: Harvard Business School Press.
REFERENCES

REFERENCES

Broscio, M., & Scherer, J. (2003). Building job security: Strategies for becoming a highly valued
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