What Is Healthcare Management: Roles and Challenges

US hospitals are in crisis. Emergency rooms are overcrowded, patient wait times are soaring, and the cost of care is out of reach for millions. But who handles affairs on the back end while medical staff does frontline treatment?

Healthcare managers stand between expenses, staff, and patients. They're the ones deciding how to deliver quality care while cutting costs. Below, we explain their role and the common challenges they might face.

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What Is the Role of a Healthcare Manager?

According to the Bureau of Labor Statistics, healthcare managers are in charge of the clinic's operations, handling one or several departments. [1] They set goals, manage costs, and ensure everyone complies with laws.

The roles vary based on clinic or department size. Managers in charge of nursing homes might handle the operations of the entire facility, while those at hospitals focus only on intensive care.

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Key Challenges of Healthcare Management

Staffing Shortages

Staff shortages have been a constant challenge for US hospitals. In fact, they were the second most crucial issue in the 2019 American College of Healthcare Executives (ACHE) survey. [2] This problem did ease a bit in the mid-2000s, but it has consistently ranked among the top four since 2015.

ACHE did a study to look deeper into the matter. [3] It focused on the extent of staffing shortages in nursing, underlying causes, and strategies to address them.

Here are the key findings:

• 68% of CEOs rated staffing shortage as "significant" or "very significant."
• The top three affected fields were nurses (81%), primary care physicians (55%), and technicians (37%).
• To address the issue, CEOs increased salaries (77%), hired traveling nurses (64%), and used singing bonuses (61%).
• Flexible hours (41%), per diem nurses (33%), and residencies (26%) were less common tactics.

CEOs also used other strategies. Some partnered with schools and offered nurse training programs. A few of them even funded the nurses' education or changed their programs to a bachelor of science in nursing degrees.

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Stress, Burnout, and Job Dissatisfaction

Research shows that burnout leads to medical errors, poor care quality, and negative patient experiences. [4] Interestingly, staffing shortages might have something to do with this issue.

According to an ACHE paper, hospitals struggled with registered nurse, physician, and technician shortages before the COVID-19 pandemic. [5] The causes? Competition, not enough graduates, and retirements. Some nurses were even moving to travel positions.

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The pandemic worsened an already critical state of healthcare. Workloads were high, and conflict among staff surged. While estimates vary, it's clear that many healthcare providers burned out and quit their jobs.

Although the effect of burnout on frontline staff is well documented, we have less data on the impact on healthcare managers. That's why ACHE included a survey on ways to address burnout in their paper.

The most common ones were:

• Prioritizing Self-Care: About 42% of managers reduced stress with self-care. Many managers practiced self-kindness to cope.
• Work-Life Balance: Managers who took breaks for family life and disconnected from work during vacation improved their performance.

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Operating Costs

The US spends more on healthcare than any other country. The costs have been rising for years. The result? Bigger bills for patients, their families, and businesses that cover health insurance. Between 2010 and 2018, the yearly cost of private health insurance grew faster than Medicare (3.8% vs. 1.7%). [6]

Insurance companies usually pay more than Medicare for the same care. On average, they spend twice as much for hospitals and 143% more for doctor visits. [7] But, they negotiate the prices, which doesn't turn out well.

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Even though the government has tried to stop these insurance companies from acting unfairly, they keep growing. How can we resolve this issue? A paper published in the KFF suggests regulating the cost by setting the maximum prices or limiting their increase. [9]

Another common way to control costs is to set a fixed amount for each service offered by healthcare providers. For example, the government has set prices for Medicare-covered hospitals and doctors for many years. Over time, it changed them to limit costs and encourage efficiency.

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Unrelenting Cyberattacks

Ransomware attacks on hospitals doubled from 2022 to 2023. [10,11] They force hospitals to do everything manually and cause financial losses. Many clinics have to pay to get their data back.

Outdated technology is a major issue. Many hospitals rely on legacy systems incompatible with modern security updates. This and limited cybersecurity resources make healthcare facilities prime targets.

While the government is addressing the issue through cybersecurity funding, the current regulations leave hospitals in charge of their protection. [12]

Evolving Policies and Technology

Healthcare is changing fast, and it's all about improving patient outcomes. New policies emphasize that hospitals have to be sure that any changes they make will help patients beforehand. [13,14]

Technology like electronic health records and remote monitoring is also reshaping healthcare. [15–17] These tools simplify the work of specialists, improving efficiency. Healthcare managers need to adapt to these shifts quickly and use them to ensure their facilities stay successful.

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Healthcare Management: Building a Healthier Future

Healthcare management is a complex role requiring a balance of business acumen and medical knowledge. Managers oversee operations, ensure quality care, and optimize resources.

Financial constraints, regulations, and workforce shortages may challenge effective patient care. This makes healthcare management even more critical. As the field evolves, administrators will play an even more significant role in shaping the future of patient care and organizational success.

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