Healthcare administration is the management of all the non-clinical functions involved in operating a healthcare facility, from day-to-day operations to staffing to budgeting and finance to long-term strategic planning to ensure the success of the healthcare provider or system. You can think of healthcare administration as the process of managing and handling every aspect of the business side of delivering healthcare services.
As leaders in a dynamic and interdisciplinary field that combines health policy, business, and science to manage fiscal and human resources, healthcare administrators strive to improve the business of healthcare; an endeavor that always starts with sound policy and top quality patient care.
The sheer size and complexity of many of our nation’s healthcare systems means that healthcare administration encompasses everything from policy making to human resources to department management and beyond. However, the goal of healthcare administration is always the same: to ensure the coordinated delivery of healthcare and the efficient management of medical facilities.
Depending on the type and size of the healthcare system, healthcare administration may involve a number of teams working in unison to manage the system at every level.
Healthcare administration may involve the oversight and management of:
- An entire healthcare system
- Specific facilities, such as physician’s practices, hospitals, and home health agencies
- Specific departments or units, such as critical care units, emergency departments, and cardiac care units
- Specific clinical areas, such as nursing, physical therapy, and cardiology
- Specific areas, such as staffing, facility administration, admissions, and finances
The Value of Healthcare Administration
The American College of Healthcare Executives calls healthcare management a “hidden” career, since it is one of the last things to come to mind when most people think of medical services. Although the work of professionals in healthcare administration occurs behind the scenes, their worth is undeniable. In fact, healthcare administrators have tremendous influence on the availability, accessibility, and quality of healthcare in our nation’s communities.
Skilled healthcare administrators create an environment in which healthcare providers are able to practice both effectively and efficiently. It also provides safe, comfortable, and compassionate places for people to receive health services.
Although healthcare administration is concerned with the business side of healthcare, it does not diminish the focus on providing top quality and highly effective patient care.
The Evolution of Healthcare Administration
As a career field, healthcare administration has developed right alongside advances in medical science and the growth of hospitals in the United States. Until the early part of the twentieth century, the wealthy received care in their homes, while the poor and those without family turned to the hospitals for care. During that time, there were few opportunities to improve the health of patients in the nation’s hospitals.
However, the implementation of anesthesia, the development of modern surgery, and the discovery of antibiotics transformed hospitals into places that could relieve suffering and provide cures. Between 1875 and 1925, the number of hospitals in the U.S. grew from 170 to about 7,000, while the number of hospital beds increased from 35,000 to more than 860,000.
Early hospital administrators—often called superintendents—were usually nurses with administrative responsibilities. It wasn’t until 1916 that the first formal hospital administration and nursing school administration educational programs were established.
By 1929, the first book on hospital administration was published, entitled Hospital Administration, A Career: The Need for Trained Executives for a Billion Dollar Business, and How They May Be Trained. This publication proposed a two-year graduate degree curriculum in hospital administration. The University of Chicago was the first university to offer such a program in 1934. By the 1940s, eight more universities developed programs. Nine more programs followed in the 1950s, and fifteen more in the 1960s.
In 1968 the Accrediting Commission on Graduate Education for Hospital Administration (now the Commission on Accreditation of Healthcare Management Education) became the accrediting agency for graduate programs in health administration. Today, a large group of educational and professional associations sponsor this agency, including the American College of Healthcare Executives, the American College of Medical Practice Executives, the American Public Health Association, the American Hospital Association, and more.
Today’s Health and Medical Administration Field
Over the last century, healthcare administration has witnessed dramatic changes:
- Hospitals have become large, complex organizations
- Technology has advanced exponentially
- Healthcare financing has moved from private pay to a complex, third-party reimbursement system
- Government has taken on a larger role in healthcare delivery
Despite these significant changes, the field continues to focus on the business and financial aspects of hospitals, clinics, and other health services, with particular focus placed on efficiency and financial stability.
The primary roles of today’s professionals in healthcare administration include:
- Human resources management
- Financial management
- Cost accounting
- Data collection and analysis
- Strategic planning
- Maintenance functions of the organization
- Providing the most basic social services: the care of dependent people at the most vulnerable points in their lives.
- Maintaining the moral and social order of healthcare organizations
- Serving as patient advocates
- Serving as arbitrators in situations where there are competing values
- Serving as intermediaries for the various professional groups practicing within the organization
Some of the challenges professionals in healthcare administration face today include:
- Ensuring effective, efficient healthcare services for communities
- Shortages of nurses and other healthcare workers
- Concern for the safety and quality of healthcare services
- Rising healthcare costs
- An aging population
- Rapidly changing medical terminology and practice