Introduction to Health Care Management Second Edition Edited by Sharon B. Buchbinder, RN, PhD President American Hospital Management Group Corporation MASA Healthcare Co. Owings Mills, MD Nancy H. Shanks, PhD Professor Department of Health Professions Health Care Management Program Metropolitan State College of Denver Denver, CO World Headquarters Jones & Bartlett Learning 5 Wall Street Burlington, MA 01803 978-443-5000 info@jblearning.com www.jblearning.com Jones & Bartlett Learning Canada 6339 Ormindale Way Mississauga, Ontario L5V 1J2 Canada Jones & Bartlett Learning International Barb House, Barb Mews London W6 7PA United Kingdom Jones & Bartlett Learning books and products are available through most bookstores and online booksellers. To contact Jones & Bartlett Learning directly, call 800-832-0034, fax 978-443-8000, or visit our website, www.jblearning.com. 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If legal advice or other expert assistance is required, the service of a competent professional person should be sought. Production Credits Publisher: Michael Brown Associate Editor: Maro Gartside Editorial Assistant: Teresa Reilly Production Manager: Tracey McCrea Senior Marketing Manager: Sophie Fleck Manufacturing and Inventory Control Supervisor: Amy Bacus Composition: Cenveo Publisher Services Cover Design: Scott Moden Cover Image: © Yegor Korzh/ShutterStock, Inc. Printing and Binding: Malloy, Inc. Cover Printing: Malloy, Inc. Library of Congress Cataloging-in-Publication Data Introduction to health care management / [edited by] Sharon Buchbinder, Nancy Shanks. — 2nd ed. p. ; cm. Includes bibliographical references and index. ISBN-13: 978-0-7637-9086-8 (pbk.) ISBN-10: 0-7637-9086-9 (pbk.) 1. Health services administration. I. Buchbinder, Sharon Bell. II. Shanks, Nancy H. [DNLM: 1. Health Services Administration. 2. Efficiency, Organizational. 3. Health Care Costs. 4. Leadership. 5. Organizational Case Studies. W 84.1] RA971.I58 2012 362.1—dc23 2011013461 6048 Printed in the United States of America 15 14 13 12 11 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 “FINISH THE SECOND EDITION!” Contents FOREWORD PREFACE ACKNOWLEDGMENTS ABOUT THE EDITORS CONTRIBUTORS CHAPTER 1 An Overview of Healthcare Management Jon M. Thompson, Sharon B. Buchbinder, and Nancy H. Shanks Introduction The Need for Managers and Their Perspectives Management: Definition, Functions, and Competencies Management Positions: The Control in the Organizational Hierarchy Focus of Management: Self, Unit/Team, and Organization Role of the Manager in Talent Management Role of the Manager in Ensuring High Performance Role of the Manager in Succession Planning Role of the Manager in Healthcare Policy Chapter Summary CHAPTER 2 Leadership Louis Rubino Leadership vs. Management Followership History of Leadership in the United States Contemporary Models Leadership Styles Leadership Competencies Leadership Protocols Governance Barriers and Challenges Ethical Responsibility Leaders Looking to the Future CHAPTER 3 Management and Motivation Nancy H. Shanks and Amy Dore Introduction Motivated vs. Engaged—Are the Terms the Same? Motivation—The Concept Why Motivation Matters History of Motivation Theories of Motivation A Bit More about Incentives and Rewards Misconceptions about Motivation and Employee Satisfaction Motivational Strategies Motivating Across Generations Conclusion CHAPTER 4 Organizational Behavior and Management Thinking Sheila K. McGinnis Introduction The Field of Organizational Behavior Organizational Behavior’s Contribution to Management Key Topics in Organizational Behavior Organizational Behavior Issues in Health Organizations How Thinking Influences Organizational Behavior Managing and Learning How to Work with Thinking Conclusions CHAPTER 5 Strategic Planning Susan Judd Casciani Introduction 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 Healthcare Manager Conclusion CHAPTER 6 Healthcare Marketing Ruth Chavez and Nancy Sayre Introduction What Is Marketing? A Brief History of Marketing in Health Care The Strategic Marketing Process Understanding Marketing Management Healthcare Buyer Behavior Marketing Mix Marketing Plan Ethics and Social Responsibility Conclusion CHAPTER 7 Quality Improvement Basics Eric S. Williams, Grant T. Savage, and Dennis G. Stambaugh Introduction Defining Quality in Health Care Why Is Quality Important? Key Leaders in Quality Improvement Baldrige Award Criteria: A Strategic Framework for Quality Improvement Common Elements of Quality Improvement Two Approaches to Quality Improvement Quality Improvement Tools Conclusion CHAPTER 8 Information Technology Tressa Springmann Introduction Information Systems Used by Managers The Electronic Medical Record (EMR) The Challenges to Clinical System Adoption The Future of Healthcare Information Technology (HIT): The Vision of an Integrated U.S. Healthcare System The Impact of Information Technology on the Healthcare Manager Conclusion CHAPTER 9 Financing Health Care and Health Insurance Nancy H. Shanks Introduction 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 Conclusion CHAPTER 10 Managing Costs and Revenues Kevin D. Zeiler Introduction What Is Financial Management and Why Is It Important? Tax Status of Healthcare Organizations Financial Governance and Responsibility Structure Managing Reimbursements from Third-Party Payers Controlling Costs and Cost Accounting Setting Charges Managing Working Capital Managing Accounts Receivable Managing Materials and Inventory Managing Budgets Conclusion CHAPTER 11 Managing Healthcare Professionals Sharon B. Buchbinder and Dale Buchbinder Introduction Physicians Registered Nurses Licensed Practical Nurses/Licensed Vocational Nurses Nursing and Psychiatric Aides Home Health Aides Midlevel Practitioners Allied Health Professionals Conclusion CHAPTER 12 The Strategic Management of Human Resources Jon M. Thompson Introduction Environmental Forces Affecting Human Resources Management Understanding Employees as Drivers of Organizational Performance Key Functions of Human Resources Management Workforce Planning/Recruitment Employee Retention Conclusion CHAPTER 13 Teamwork Sharon B. Buchbinder and Jon M. Thompson Introduction What Is a Team? The Challenge of Teamwork in Healthcare Organizations The Benefits of Effective Healthcare Teams The Costs of Teamwork Real-World Problems and Teamwork Who’s on the Team? Emotions and Teamwork Team Communication Methods of Managing Teams of Healthcare Professionals Conclusion CHAPTER 14 Addressing Health Disparities: Cultural Proficiency Nancy Sayre and Ruth Chavez Introduction Changing U.S. Demographics and Patient Populations Addressing Health Disparities by Fostering Cultural Competence in Healthcare Organizations Best Practices Addressing Health Disparities by Enhancing Public Policy Conclusion CHAPTER 15 Ethics and Law Kevin D. Zeiler Introduction Legal Concepts Tort Law Malpractice Contract Law Ethical Concepts Patient and Provider Rights and Responsibilities Legal/Ethical Concerns in Managed Care Biomedical Concerns Beginning- and End-of-Life Care Conclusion CHAPTER 16 Fraud and Abuse Kevin D. Zeiler Introduction What Is Fraud and Abuse? History 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 Conclusion CHAPTER 17 Healthcare management Case Studies and Guidelines Sharon B. Buchbinder, Donna M. Cox, and Susan Judd Casciani Introduction Case Study Analysis Case Study Write-Up Team Structure and Process for Completion CASE STUDIES* Oops Is Not an Option—Case for CHAPTER 16 Building a Better MIS-Trap—Case for CHAPTER 8 The Case of the Complacent Employee—Case for Chapter 12 The Brawler—Case for Chapters 11 and 12 End Days—Case for Chapter 15 I Love You…Forever—Case for Chapters 12 and 11 Managing Healthcare 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 11 and 12 Sundowner or Victim?—Case for Chapter 15 All Children’s Pediatrics: Changing with the Times—Case for CHAPTER 6 High Employee Turnover at Hillcrest Memorial Hospital— Case for Chapter 3 Set Up for Failure?—Case for CHAPTER 3 Negotiation in Action—Case for Chapter 10* The Merger of Two Competing Hospitals—Case for Chapters 5, 2, and 12 Sexual Harassment at the Diabetes Clinic—Case for Chapters 12 and 15* Prelude to a Medical Error—Case for Chapters 4 and 7 The Finance Department at Roseville Community Hospital— Case for Chapters 4 and 10 Madison Community Hospital Addresses Infection Control Prevention—Case for Chapter 7* Seaside Convalescent Care Center—Case for Chapters 13 and 3 Staffing at River Oaks Community Hospital: Measure Twice, Cut Once—Case for Chapter 12* Heritage Valley Medical Center: Are Your Managers Culturally Competent?—Case for Chapters 14 and 13 Emotional Intelligence in Labor and Delivery—Case for Chapters 2 and 13 Are We Culturally Aware or Not?—Case for Chapters 14 and 5 A Nightmare Job Interview—Case for CHAPTER 12 A Small Healthcare Clinic Confronts Health Insurance Problems—Case for Chapter 9 Choosing a Successor—Case for Chapters 1 and 2 The New Toy at City Medical Center—Case for Chapters 11 and 13 The “Easy” Software Upgrade at Delmar Ortho—Case for Chapters 8 and 13 Recruitment Challenge for the Middle Manager—Case for Chapter 12 Humor Strategies in Healthcare Management Education— Case for CHAPTER 14 Medication Errors Reporting at Community Memorial Hospital—Case for CHAPTER 7 Dr Nugget’s Medical Practice—Case for Chapter 15 Fraud and Abuse—Help Me, the Feds Are Coming!—Case for Chapter 16 Managing Costs and Revenues at Happy Town Neurology— Case for Chapter 10* INDEX * Instructors: Please note that an instructor’s guide is available online for these cases. Foreword Undergraduate healthcare management education is now recognized as a significant component of the healthcare delivery matrix. The evolution of undergraduate healthcare management education has been pushed for a disparate number of reasons in the dynamic healthcare field. One of the primary factors has been the recognition by leaders and administrators of healthcare delivery that a need exists for entry-level managers who have the basic business and healthcare educational knowledge, skills, and competencies to fill a variety of roles. These entry-level positions are found in almost all healthcare delivery settings, including hospitals, long-term care facilities, medical group practices, governmental agencies, home healthcare agencies, and insurance institutions—just to name a few. Undergraduate programs across the United States have seen their enrollments increase significantly in response to this recognition. The parallel recognition by potential students that healthcare management provides an almost unequaled opportunity for employment has also been instrumental in this growth. The growth and development has been encouraging, but not absent of challenges. Over the past decade, we have struggled with program development, curriculum issues, certification ambiguities, and meaningful outcome measures. Fortunately, we have turned the corner on most of these and are seeing great progress in achieving excellence in our programs. The one remaining and often discussed impediment to achieving greater excellence is the lack of an array of textbooks that fit undergraduate curricula and missions. In my role as chair of the Undergraduate Program Committee of the Association of University Programs in Health Administration (AUPHA), I have significant contact with many of the undergraduate program directors and faculty. The one recurrent theme that I hear from them is that there is a lack of well-written and crafted textbooks suitable for undergraduate education. The majority of the textbooks written in the field have until recently been geared toward graduate education. Instructors in undergraduate programs have been forced to try to adapt these texts to an audience for which they were not intended. As enrollment in the undergraduate programs has increased, an obvious market has developed for appropriate textbooks. Some progress has been made in this direction, but there still exists a void in many subject areas. Arguably, one of the most important texts sought by educators in this field was a comprehensive introduction to the areas of healthcare management education. The first edition of this textbook satisfied this need by providing an excellent treatment of most key areas. This second edition provides an even better overview by introducing new items and allowing the reader to be kept abreast of the most current developments in the field. A necessary ingredient for the successful production of a textbook that has exceptional value is that the authors and editors possess a true understanding of all facets of undergraduate healthcare management education. Sharon Buchbinder and Nancy Shanks have developed mastery of this process because of their total immersion in it. Both exemplify the “boots on the ground” approach as they have been involved in administering undergraduate programs, teaching in them, and serving AUPHA in a great variety of capacities. The measure of an excellent textbook is whether it has created a union of content, insights, experience, and a genuine understanding of the target audience. This text accomplishes these goals and, because of its scope of topics, has great utility beyond its targeted audience. The range of topics covered affords the reader the opportunity to become aware of the most significant concepts that are part of healthcare management. At its core, healthcare delivery is the consummate service profession. Almost all that we do must be done through and with people. The ability to have the skills to guide and motivate people is therefore instrumental to success. This text provides an excellent blueprint for learning these skills. If you are reading this text, in all probability you are either a healthcare management student or a healthcare administrator. In either case, you are to be congratulated for your choice of career. The healthcare management profession is a noble endeavor that is crucial to the effective delivery of health care. As such, it serves a true linchpin role in our society’s quest for health and happiness. From a practical perspective, you have chosen well in terms of career longevity. In this latter context, you will need resources to keep you current in what is transpiring in the field. Drs. Buchbinder and Shanks have put together an excellent example of one of these needed resources. Use it well, and enjoy your careers. Peter G. Fitzpatrick, EdD, RPh Professor/Department Head Health Care Management School of Business Clayton State University Morrow, GA Preface The second edition of Introduction to Health Care Management is driven by our desire to have an excellent textbook that continues to meet the needs of the healthcare management field, healthcare management educators, and the students enrolled in healthcare 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 edition and is based 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 chapters for this text because we listened to you, our readers and users. With a track record of more than three 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 healthcare management, nursing, public health, and allied health programs will find the writing to be engaging. In addition, students in graduate programs in discipline-specific 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 more than three 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 give-and-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 contents critical for a foundation in healthcare management, this second edition continues to provide realistic information that can be applied immediately to the real world of healthcare management. In addition to revised and updated chapters from the first edition, there are learning objectives, discussion questions, and case studies included in each chapter, with additional instructors resources online and Instructor’s Guides for the more advanced case studies. PowerPoint slides and test items are included for each chapter. A sample syllabus is also provided. Specifically, the second edition contains: A new first chapter that provides the reader with an overview of the profession of healthcare management and discusses the major functions, roles, responsibilities, and competencies for healthcare managers. A new chapter on healthcare marketing that speaks to the growing significance of consumer-driven health care, the boom of the Internet on all frontiers, the increased demand for personalized services, and the need for the healthcare manager to understand the principles of strategic marketing. A new chapter on information technology written by a practicing Chief Information Officer to address the current state of information technology in health care and the impact the acceleration of its implementation has had on healthcare managers. A new chapter on addressing health disparities, cultural proficiency, and the impact of a diverse population on the management of a culturally competent healthcare organization. A significantly revised chapter on fraud and abuse with a focus on the beginnings of fraud and abuse prevention programs and a look at the investigative processes used to uncover fraud and abuse, as well as the responsibilities of employees of healthcare organizations. An extensively revised case study guide, with new and improved rubrics for evaluation of student performance, enabling professors at every level of experience to hit the ground running on that first day of classes. Thirty-five case studies, twenty of which are new to this edition, that cover a wide variety of settings and an assortment of healthcare management topics. At the end of each chapter in the text, at least one specific case study is identified and linked to the content of that chapter. Many chapters have multiple cases. Plus, there are now four completely online case studies that do not appear in the text. 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 American Hospital Management Group Corporation Nancy H. Shanks, PhD Metropolitan State College of Denver Acknowledgments This second edition is the result of a six-year process that involved the majority of the leaders in excellence in undergraduate healthcare 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 at every step of the way. More than 30 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: Maron Boohaker, Dale Buchbinder, Susan Casciani, Ruth Chavez, Donna Cox, Amy Dore, Daniel Fahey, Mary Anne Franklin, Brenda Freshman, Barry Gomberg, Kenneth Johnson, Dale Mapes, Audrey McDow, Sheila McGinnis, Karen Mithamo, Michael Moran, Wayne Nelson, Dawn Oetjen, Woody Richardson, Velma Roberts, Lou Rubino, Grant Savage, Nancy Sayre, W. Carole Shepherd, Windsor Sherrill, Donna Slovensky, Tressa Springmann, Dennis Stambaugh, Jon Thompson, Rosalind Trieber, 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, was professor and chair of the Department of Health Science at Towson University and is now president of the American Hospital Management Group Corporation, MASA Healthcare Co, a healthcare management education and healthcare delivery organization based in Owings Mills, MD. For more than three 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. Nancy H. Shanks, PhD, has extensive experience in the healthcare field. For 12 years, she worked as a health services researcher and health policy analyst and later served as the executive director of a grant-making, fund-raising foundation that was associated with a large multihospital system in Denver. During the last 15 years, Dr. Shanks has been a healthcare administration educator at Metropolitan State College 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 a professor in the Health Care Management Program 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 uninsured. Contributors Maron Joseph Boohaker, MPH Compliance Audit Manager HealthSouth Corporation Birmingham, AL 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 Judd Casciani, MSHA, MBA, FACHE Clinical Assistant Professor and Coordinator, Health Care Management Program Department of Health Science Towson University Towson, MD Ruth Chavez, PhD, MBA Assistant Professor Department of Marketing Metropolitan State College of Denver Denver, CO 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 Assistant Professor, Health Care Management Program Department of Health Professions Metropolitan State College of Denver Denver, CO Daniel F. Fahey, PhD Associate Professor Health Science Department California State University, San Bernardino San Bernardino, CA Mary Anne Franklin, EdD, MSA, LNFA Professor Emerita Taos, NM Brenda Freshman, PhD Assistant Professor Health Administration Program California State University, Long Beach Long Beach, CA Barry G. Gomberg, JD Executive Director of Equal Opportunity/Affirmative Action Office Weber State University Ogden, UT Kenneth L. Johnson, PhD, CHES Interim Dean Dumke College of Health Professions Weber State University Ogden, UT Dale Mapes, MSA Vice President of Human Resources and Support Services Portneuf Regional Medical Center Pocatello, ID Audrey McDow Former Student Department of Health Care Administration Idaho State University Pocatello, ID Sheila K. McGinnis, PhD Alexandria, VA Karin Mithamo Former Graduate Student Department of Business Idaho State University Pocatello, ID Michael Moran, MS, MSHA Adjunct Faculty, Health Care Management Program Department of Health Professions Metropolitan State College of Denver Denver, CO H. Wayne Nelson, PhD Professor Department of Health Science Towson University Towson, MD Dawn M. Oetjen, PhD Professor and Graduate Program Director Health Services Administration Program Department of Health Management and Informatics University of Central Florida Orlando, FL Woody D. Richardson, PhD Instructor Department of Management and Information Systems College of Business Mississippi State University Mississippi State, MS Velma Roberts, PhD Associate Professor Healthcare Management Division School of Allied Health Sciences Florida A & M University Tallahassee, FL Louis Rubino, PhD, FACHE Professor/Director, Health Administration Program Interim Director, Institute for Community Health and Wellbeing at CSUN California State University, Northridge Northridge, CA Grant T. Savage, PhD Professor of Management Management, Information Systems & Quantitative Methods Department University of Alabama at Birmingham Birmingham, AL Nancy K. Sayre, PA, MHS Assistant Department Chair, Coordinator Health Care Management Program and Visiting Assistant Professor Department of Health Professions Metropolitan State College of Denver Denver, CO W. Carole Shepherd, MS Part-Time Faculty Department of Health Sciences Health Administration Program California State University, Northridge Northridge, CA Windsor Westbrook Sherrill, PhD Associate Professor Public Health Sciences Clemson University Clemson, SC Donna J. Slovensky, PhD, RHIA, FAHIMA Associate Dean for Student and Academic Affairs School of Health Professions University of Alabama at Birmingham Birmingham, AL Tressa Springmann, MS, CPHIMS Vice President and Chief Information Officer The Greater Baltimore Medical Center Baltimore, MD Dennis G. Stambaugh Chief Quality Officer University of Missouri Health System Columbia, MO Jon M. Thompson, PhD Professor and Director, Health Services Administration Program Department of Health Sciences James Madison University Harrisonburg, VA Rosalind Trieber, MS, CHES Trieber Associates, Inc. Owings Mills, MD Eric S. Williams, PhD Professor of Health Care Management Minnie Miles Research Professor University of Alabama Tuscaloosa, AL Kevin D. Zeiler, JD, MBA, EMT-P Assistant Professor, Health Care Management Program Department of Health Professions Metropolitan State College of Denver Denver, CO CHAPTER 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. 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 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. MANAGEMENT: DEFINITION, FUNCTIONS, AND COMPETENCIES 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 Practice Manager Physician practice Director of Medical Records Supervisor, Billing Office Administrator Manager, Business Office Nursing home Director, Food Services Admissions Coordinator Supervisor, Environmental Services Chief Executive Officer Vice President, Marketing Hospital 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 POSITIONS: THE CONTROL IN THE ORGANIZATIONAL HIERARCHY 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 teambased, 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 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. FIGURE 1-1 Functional Organizational Structure 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. 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 highperforming 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 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 that 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, is improved. 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 hospitalacquired 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. ROLE OF THE MANAGER IN SUCCESSION PLANNING 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. ROLE OF THE MANAGER IN HEALTHCARE POLICY 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 seniorlevel 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. Boblitz, M., & Thompson, J. M. (2005, October). Assessing the feasibility of developing centers of excellence: Six initial steps. Healthcare Financial Management, 59, 72–84. Broscio, M., & Scherer, J. (2003). Building job security: Strategies for becoming a highly valued contributor. Journal of Healthcare Management, 48, 147–151. Buchbinder, S. B., & Thompson, J. M. (2010). Career opportunities in health care management: Perspectives from the field Sudbury, MA: Jones & Bartlett. Bureau of Labor Statistics. (2010). Occupational outlook handbook 2010–11 edition. Retrieved from www.bls.gov/oco/ocos014.htm Burt, T. (2005). Leadership development as a corporate strategy: Using talent reviews to improve senior management. Healthcare Executive, 20, 14–18. Curtright, J. W., Stolp-Smith, S. C., & Edell, E. S. (2000). Strategic management: Development of a performance measurement system at the Mayo Clinic. Journal of Healthcare Management, 45, 58–68. Duffy, J. R., & Lemieux, K. G. (1995, Fall). A cardiac service line approach to patient-centered care. Nursing Administration Quarterly, 20, 12–23. Finley, F. R., Ivanitskaya, L. V., & Kennedy, M. H. (2007). Mentoring junior healthcare administrators: A description of mentoring practices in 127 U.S. hospitals. Journal of Healthcare Management, 52, 260-270. Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2002). Strategic management ofhealthcare organizations (4th ed.). Malden, MA: Blackwell. Griffith, J. R. (2000). Championship management for healthcare organizations. Journal of Healthcare Management, 45, 17-31. Griffith, J. R. (2009). Finding the frontier of hospital management. Journal of Healthcare Management, 54(1), 57-73. Huselid, M. A., Beatty, R. W., & Becker, B. E. (2005, December). “A players” or “A” positions? The strategic logic of workforce management. Harvard Business Review, 83, 100-117. Katz, R. L. (1974). Skills of an effective administrator. Harvard Business Review, 52, 90-102. Kubica, A. J. (2008). Transitioning middle managers. Healthcare Executive, 23, 58-60. Lombardi, D. M., & Schermerhorn, J. R. (2007). Healthcare management Hoboken, NJ: John Wiley. Longest, B. B., Rakich, J. S., & Darr, K. (2000). Managing health services organizations and systems Baltimore, MD: Health Professions Press. McAlearney, A. S. (2010). Executive leadership development in U.S. health systems. Journal of Healthcare Management, 55(3), 206-224. Pieper, S. K. (2005). Reading the right signals: How to strategically manage with scorecards. Healthcare Executive, 20, 9-14. Rollins, G. (2003). Succession planning: Laying the foundation for smooth transitions and effective leaders. Healthcare Executive, 18, 14-18. Ross, A., Wenzel, F. J., & Mitlyng, J. W. (2002). Leadership for the future: Core competencies in health care Chicago, IL: Health Administration Press/AUPHA Press. Studer, Q. (2003). Hardwiring excellence Gulf Breeze, FL: Fire Starter. Thompson, J. M. (2007). Health services administration. In S. Chisolm (Ed.), The health professions: Trends and opportunities in U.S. health care (pp. 357-372). Sudbury, MA: Jones & Bartlett. CHAPTER 2 Leadership Louis Rubino LEARNING OBJECTIVES By the end of this chapter, the student will be able to: Distinguish between leadership and management; Define followership and why it’s as important as leadership; Summarize the history of leadership in the United States from the 1920s to current times; Compare contemporary models of leadership; Describe leadership domains and competencies; Compare leadership styles; Summarize old and new governance trends; Discuss how culture plays a role in leadership; and Provide a rationale for why healthcare leaders have a greater need for ethical behavior. LEADERSHIP VS. MANAGEMENT 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, or some other healthcare sector, 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. 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 healthcare 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. There are several managers reporting to this person, all of whom have various functional responsibilities (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. FIGURE 2-1 Leadership and Management Focus Note: Arrows represent continual interactions between all elements of the model. Leaders have a particular set of competencies that require more forward thinking than those of managers. Leaders need to set a direction for the organization. They need to be able to motivate their employees, as well as other stakeholders, so that 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. They need a different set of competencies. See Table 2-1. FOLLOWERSHIP For every leader, there must be followers. Leaders must have someone they can lead in order to accomplish what they set out to do. Not everyone can or should be a leader. Leaders should have certain recognizable traits that will help them take charge, while followers must have a willingness to be led as well as the ability to do the task requested. True leaders inspire commitment from dedicated people. Atchison (2003) wrote about this process in his book Followership. He describes followership as complementary to leadership and recommends that it be recognized as a necessary component for an effective leader. A self-absorbed administrator will not make a good leader. A true leader will recognize the importance of getting respect, not simply compliance, from the people who follow. It is one thing to have people do what you say, but to have someone want to do it is another thing. The leader who understands this is on the way to greatness and will create a much more meaningful work environment. TABLE 2-1 Leadership vs. Management Competencies Leadership Competencies Management Competencies Setting direction or mission Staffing personnel Motivating stakeholders Controlling resources Being an effective spokesperson Supervising the service provided Determining strategies for the future Overseeing adherence to regulations Transforming the organization Counseling employees As Atchison says, “An executive title without followers has an illusion of power. These titled executives create a workplace without a soul.” HISTORY OF LEADERSHIP IN THE UNITED STATES 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 19 th 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 United States, 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, 2010). These emphases often matched or were adapted from the changes occurring in society. With the industrialization of the United States 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 that 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 that leaders have differing degrees of concern over each of these behaviors, and the best leaders would be fully attentive to both. 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 that 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 United States 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 that 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 United States 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 healthcare 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. CONTEMPORARY MODELS We have entered the 21st century with some of the greatest leadership challenges ever in the healthcare 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 picture. Several of today’s leadership models relate well to the dynamism of the healthcare field and are presented here. Looking at these models, there seems to be a consistent pattern of self-aware leaders who are concerned for their employees and understand the importance of meaningful work. As we entered the 2000s, the SelfActualized Leadership Theory, taking the term from Maslow’s top level in his Hierarchy of Needs (Maslow, 1943), defines this type of leader. Today requires leaders to use Adaptive Leadership to create flexible organizations able to meet the relentless succession of challenges faced (Heifetz, Grashow, & Linsky, 2009). Plus, today’s astute healthcare leaders recognize the importance of considering the global environment, as health care wrestles with international issues that impact us locally, such as outsourcing services, medical tourism, and over-the-border drug purchases. See Table 2-2. Emotional Intelligence (EI) Emotional Intelligence (EI) is a concept made famous by Daniel Goleman in the late 1990s. It suggests that there are certain skills (intrapersonal and interpersonal) that a person needs to be well adjusted in today’s world. These skills include selfawareness (having a deep understanding of one’s emotions, strengths, weaknesses, needs, and drives), self-regulation (a propensity for reflection, an ability to adapt to changes, the power to say no to impulsive urges), motivation (being driven to achieve, being passionate about one’s profession, enjoying challenges), empathy (thoughtfully considering others’ feelings when interacting), and social skills (moving people in the direction you desire by your ability to interact effectively) (Freshman & Rubino, 2002). Since September 11, 2001, leaders have needed to be more understanding of their subordinates’ world outside of the work environment. EI, when applied to leadership, suggests a more caring, confident, enthusiastic boss who can establish good relations with workers. Researchers have shown that EI can distinguish outstanding leaders and strong organizational performance (Goleman, 1998). For health care as an industry and for healthcare managers, this seems like a good fit. See Table 2-3. TABLE 2-2 Leadership Theories in the United States Period Time 1920s 1930s 1940s 1950s 1960s of and and Leadership Theory Leadership Focus Great Man Having certain inherent traits Style Approach Task completion and developing relationships Situational Approach Needs of the subordinates Contingency and Early 1970s Both style and situation Path–Goal Leader–Member Late 1970s Interactions between leader and subordinate Exchange Transformational 1980s Raise consciousness and empower followers Approach 1990s Team Leadership Team performance and development Self-Actualized 2000s Introspection and concern for meaningfulness Leadership 2010s Adaptive Leadership Build capacity to thrive in a new reality Recognizing the impact of globalization for 2010s Global Leader their industry Authentic Leadership The central focus of authentic leadership is that people will want to naturally associate with someone who is following their internal compass of true purpose (George & Sims, 2007). Leaders who follow this model are ones who know their authentic selves, define their values and leadership principles, understand what motivates them, build a strong support team, and stay grounded by integrating all aspects of their lives. Authentic leaders have attributes such as confidence, hope, optimism, resilience, high levels of integrity, and positive values (Brown & Gardner, 2007). Assessments given to leaders in a variety of international locations have provided the evidence-based knowledge that there is a correlation between authentic leadership and positive outcomes based on supervisor-rated performance (Walumbwa, Avolio, Gardner, Wernsing, & Peterson, 2008). TABLE 2-3 Emotional Intelligence’s Application to Healthcare Leadership EI Definition Leadership Application Dimension SelfA deep understanding of one’s Knowing if your values are Awareness emotions and drives congruent with the organization’s SelfAdaptability to changes and control Considering ethics of giving Regulation over impulses bribes to doctors Ability to enjoy challenges and Being optimistic even when Motivation being passionate toward work census is low Social awareness skill, putting Setting a patient-centered vision Empathy yourself in another’s shoes for the organization Social Supportive communication skills, Having an excellent rapport with Skills abilities to influence and inspire the board Inspirational Leadership This model’s focus is on leaders who inspire by giving people what they need. This can be very different from what they want. Inspirational leaders are not perfect and in fact expose their weaknesses so people can relate to them better. As with emotional intelligence, empathy is recognized as important. Inspirational leadership supports the concept known as “tough empathy,” which is the quality of leaders caring passionately about their employees and their work yet being prudent in what they provide in the way of support. Inspirational leaders will rely on intuition to act and use their uniqueness (e.g., expertise, personality, or even something as simple as a greeting) as a way to distinguish themselves in the leadership role (Goffee & Jones, 2000). Diversity Leadership Our new global society forces healthcare leaders to address matters of diversity, whether with their patient base or with their employees. This commitment to diversity is necessary for today’s leader to be successful. The environment must be assessed so that goals can be set that embrace the concept of diversity in matters such as employee hiring and promotional practices, patient communication, and governing board composition, to name a few. Strategies have to be developed that will make diversity work for the organization. The leader who recognizes the importance of diversity and designs its acceptance into the organizational culture will be most successful (Warden, 1999). Healthcare leaders are called to be role models for cultural competency (see Chapter 14 for more on this important topic) and to be able to attract, mentor, and coach those of different, as well as similar, backgrounds (Dolan, 2009). Servant Leadership Many people view health care as a very special type of work. Individuals usually work in this setting because they want to help people. Servant leadership applies this concept to top administration’s ability to lead, acknowledging that a healthcare leader is largely motivated by a desire to serve others. This leadership model breaks down the typical organizational hierarchy and professes the belief of building a community within an organization in which everyone contributes to the greater whole. A servant leader is highly collaborative and gives credit to others generously. This leader is sensitive to what motivates others and empowers all to win with shared goals and vision. Servant leaders use personal trust and respect to build bridges and use persuasion rather than positional authority to foster cooperation. This model works especially well in a not-for-profit setting, since it continues the mission of fulfilling the community’s needs rather than the organization’s (Swearingen & Liberman, 2004). Spirituality Leadership Recently, the United States has experienced some very serious misrepresentations and misreporting by major healthcare companies, as reported by U.S. governmental agencies (e.g., HealthSouth, Tenet, and Paracelsus Healthcare). Trying to claim a renewed sense of confidence in the system, a model of leadership has emerged that focuses on spirituality. This spiritual focus does not imply a certain set of religious beliefs but emphasizes ethics, values, relationship skills, and the promotion of balance between work and self (Wolf, 2004). The goal under this model is to define our own uniqueness as human beings and to appreciate our spiritual depth. In this way, leaders can deepen their understanding and at the same time be more productive. These leaders have a positive impact on their workers and create a working environment that supports all individuals in finding meaning in what they do (see Table 2-4). They practice five common behaviors of effective leaders as described by Kouzes and Posner (1995): (1) Challenge the process, (2) Inspire a shared vision, (3) Enable others to act, (4) Model the way, and (5) Encourage the heart, thus taking leadership to a new level (Strack & Fottler, 2002). TABLE 2-4 Spirituality Leadership’s Application Behavior Definition Leadership Application Challenge the Always striving to do better Change management process Inspire a shared Collective sense of purpose Strategic orientation vision Enable others to Meeting needs of followers to Gaining trust and confidence to act get results goals Model the way Setting a personal example Coaching to motivate Encourage the Developing others to find Encouraging personal heart meaning in work development of followers LEADERSHIP STYLES Models give us a broad understanding of someone’s leadership philosophy. Styles demonstrate a particular type of leadership behavior that is consistently used. Various authors have attempted to explain different leadership styles (McConnell, 2003; Northouse, 2009; Studer, 2008). Some styles are more appropriate to use with certain healthcare workers, depending on their education, training, competence, motivation, experience, and personal needs. The environment must also be considered when deciding which style is the best fit. In a coercive leadership style power is used inappropriately to get a desired response from a follower. This very directive format should probably not be used unless the leader is dealing with a very problematic subordinate or is in an emergency situation and needs immediate action. In healthcare settings over longer periods of time, three other leadership styles could be used more effectively: participative, pacesetting, and coaching. Many healthcare workers are highly trained, specialized individuals who know much more about their area of expertise than their supervisor. Take the generally trained chief operating officer of a hospital who has several department managers (e.g., Radiology, Health Information Systems, Engineering) reporting to him or her. These managers will respond better and be more productive if the leader is participative in his or her style. Asking these managers for their input and giving them a voice in making decisions will let them know they are respected and valued. In a pacesetting style, a leader sets high performance standards for his or her followers. This is very effective when the employees are self-motivated and highly competent—e.g., research scientists or intensive care nurses. A coaching style is recommended for the very top personnel in an organization. With this style, the leader focuses on the personal development of his or her followers rather than the work tasks. This should be reserved for followers the leader can trust and those who have proven their competence. See Table 2-5. TABLE 2-5 Leadership Styles for Healthcare Personnel Style Definition Application Coercive Demanding and power based Problematic employees Participative Soliciting input and allowing decision making Most followers Pacesetting Setting high performance standards Highly competent Coaching Focus on personal development Top level LEADERSHIP COMPETENCIES A leader needs certain skills, knowledge, and abilities to be successful. These are called competencies. The pressures of the healthcare industry have initiated the examination of a set of core competencies for a leader who works in a healthcare setting (Dye & Garman, 2006; Shewchuk, O’Connor, & Fine, 2005). Criticism has been directed at educational institutions for not producing administrators who can begin managing effectively right out of school. Educational programs in health administration are working with the national coalition groups (e.g., Health Leadership Alliance, National Center for Healthcare Leadership, and American College of Healthcare Executives) and healthcare administrative practitioners to come up with agreed upon competencies. Once identified, the programs can attempt to have their students learn how to develop these traits and behaviors. Some of the competencies are technical—for example, having analytical skills, having a full understanding of the law, and being able to market and write. Some of the competencies are behavioral—for example, decisiveness, being entrepreneurial, and an ability to achieve a good work/life balance. As people move up in organizations, their behavioral competencies are a greater determinant of their success as leaders than their technical competencies (Hutton & Moulton, 2004). Another way to examine leadership competencies is under four main groupings or domains. The Functional and Technical Domain is necessary but not sufficient for a competent leader. Three other domains provide competencies that are behavioral and relate both to the individual (Self-Development and Self-Understanding) and to other people (Interpersonal). A fourth set of competencies falls under the heading Organizational and has a broader perspective. See Table 2-6 for a full listing of the leadership competencies under the four domains. LEADERSHIP PROTOCOLS Healthcare administrators are expected to act a certain way. Leaders are role models for their organizations’ employees, and they need to be aware that their actions are being watched at all times. Sometimes people at the top of an organization get caught up in what they are doing and do not realize the message they are sending throughout the workplace by their inappropriate behavior. Specific ways of serving in the role of a healthcare leader can be demonstrated and can provide the exemplary model needed to send the correct message to employees. These appropriate ways in which a leader acts are called protocols. There is no shortage of information on what protocols should be followed by today’s healthcare leader. Each year, researchers, teachers of health administration, practicing administrators, and consultants write books filled with their suggestions on how to be a great leader (for some recent examples, see Dye, 2010; Ledlow & Coppola, 2011; and Rath and Conchie, 2008). There are some key ways a person serving in a leadership role should act. These are described here and summarized in Table 2-7. TABLE 2-6 Leadership Domains and Competencies Source: Hilberman, Diana (Ed.), The 2004 ACHE-AUPHA Pedagogy Enhancement Work Group. June, 2005. Professionalism is essential to good leadership. This can be manifested not only in the way people act but also in their mannerisms and their dress. A leader who comes to work in sloppy attire or exhibits obnoxious behavior will not gain respect from followers. Trust and respect are very important for a leader to acquire. Trust and respect must be a two-way exchange if a leader is to get followers to respond. Employees who do not trust their leader will consistently question certain aspects of their job. If they do not have respect for the leader, they will not care about doing a good job. This could lead to low productivity and bad service. TABLE 2-7 Key Leadership Protocols 1. 2. 3. 4. 5. 6. 7. Professionalism Reciprocal trust and respect Confident, optimistic, and passionate Being visible Open communicator Risk taker/entrepreneur Admitting fault Even a leader’s mood can affect workers. A boss who is confident, optimistic, and passionate about his or her work can instill the same qualities in the workers. Such enthusiasm is almost always infectious and is passed on to others within the organization. The same can be said of a leader who is weak, negative, and obviously unenthusiastic about his or her work—these poor qualities can be acquired by others. Leaders must be very visible throughout the organization. Having a presence can assure workers that the top people are “at the helm” and give a sense of stability and confidence in the business. Quint Studer (2009), founder and CEO of Studer Group, states how “rounding” can help leaders meet certain standard goals: making sure that the staff know they are cared about, know what is going on (what is working well, who should be recognized, which systems need to work better, which tools and equipment need attention), and know that proper follow-up actions are taking place. Leaders must be open communicators. Holding back information that could have been shared with followers will cause ill feelings and a concern that other important matters are not being disclosed. Leaders also need to take calculated risks. They should be cautious, but not overly so, or they might lose an opportunity for the organization. And finally, leaders in today’s world need to recognize that they are not perfect. Sometimes there will be errors in what is said or done. These must be acknowledged so they can be put aside and the leader can move on to more pressing current issues. GOVERNANCE Individuals are not the only ones to consider in leadership roles. There can be a group of people who collectively assume the responsibility for strategic oversight of a healthcare organization. The term governance describes this important function. Governing bodies can be organized in a variety of forms. In a hospital, this top accountable body is called a board of trustees in a not-for-profit setting and a board of directors in a proprietary, or for-profit, setting. Since many physician offices, long-term care facilities, and other healthcare entities are set up as professional corporations, these organizations would also have a board of directors. Governing boards are facing heightened scrutiny due to the failure of many large corporations in the last decade. The U.S. government recognizes the importance of a group of people who oversee corporate operations and give assurances for the fair and honest functioning of the business. Sarbanes-Oxley is a federal law enacted in 2002 that set new or enhanced standards for proprietary companies that are publicly traded. Financial records must be appropriately audited and signed off by top leaders. Operations need to be discussed more openly so as to remove any possibility of cover-up, fraud, or self-interest. Each governing board member has fiduciary responsibility to forgo his or her own personal interests and to make all decisions concerning the entity for the good of the organization. Many believe the not-for-profits should have the same requirements and are applying pressure for them to fall under similar rules of transparency. Although healthcare boards are becoming smaller in size, they recognize the importance of the composition of their members. A selection of people from within the organization (e.g., system leaders, the management staff, physicians) should be balanced with outside members from the community (see Table 2-8). The trend is to appoint members who have certain expertise to assist the board in carrying out its duties. Also, having governing board members who do not have ties to the healthcare operations will reduce the possibility of conflicts of interests. Board meetings have gone from ones in which a large volume of information is presented for a “rubber stamp” to meetings that are well prepared, purposeful, and focused on truly important issues. A self-assessment should be taken at least annually and any identified problem areas (including particular board members) addressed. This way, the governing board can review where it stands in its ability to give fair, open, and honest strategic oversight (Gautam, 2005). A new way of looking at governance goes beyond fiduciary and strategic responsibility, whereby the board serves as the generative source of leadership, espousing the meaning for the organization’s healthcare delivery (Chait, Ryan, & Taylor, 2005). TABLE 2-8 Healthcare Governance Trends Function Old Way New Trend Size board of Large (10 to 20 people) Membership Smaller (6 to 12 people) Many members from within More balance of members within and the organization outside the organization Conflicts of Some present, not disclosed Must be disclosed but prefer none interest Voluminous detailed Strategic information and trends Meetings information presented presented If done, not taken too Taken seriously to identify issues and Evaluations seriously correct Fiduciary and strategic Leadership Generative source responsibilities BARRIERS AND CHALLENGES Health care is one of the most dynamic industries in the world. The only constant is change. Healthcare leaders are confronted with many situations that must be dealt with as they lead their organizations. Some can be considered barriers that, if not managed properly, will stymie the capacity to lead. Certain other areas are challenges that must be addressed if the leader is to be successful. A few of the more critical ones in today’s healthcare world are presented here. See Table 2-9. Due to the complex healthcare system in the United States, many regulations and laws are in place that sometimes can inhibit innovative and creative business practices. Leaders must ensure that the strategies developed for their entity comply with the current laws, or else they jeopardize its long-term survivability. Leaders are expected to sometimes think “outside the box,” i.e., go beyond the usual responses to a situation, to provide new ideas for the development of their business, but this can be challenging when many constraints must be considered. Some examples are the government’s an…
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