What Is Health Care Administration?

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A health care administrator and a medical specialist discuss strategic planning.By almost any measure, the size of the U.S. health care industry is staggering. According to the Centers for Medicare and Medicaid Services:

  • National health expenditures will grow by an average of 5.1% annually through 2030, and in 2030, national health expenditures will total almost $6.8 trillion
  • In 2030, health care will represent nearly 20% of gross domestic product
  • In 2023, for the first time, Medicare expenditures alone will exceed $1 trillion

Couple the magnitude of the industry with the challenge of recovering from the COVID-19 pandemic and the result is clear: Health care organizations need professionals with the expertise to steer them toward greater efficiency and effectiveness. A 2022 report by consulting firm McKinsey & Company echoes that point, noting a need for innovation in health care and implementation of new business models to enhance value and address patients’ needs.

For anyone interested in working in health care administration, now’s a great time to explore the field and learn about the opportunities that it offers. You may have some questions first: Exactly what is health care administration? How can people enter the field? Whether still mulling their options or already enrolled in a Master of Health Administration (MHA) degree program, individuals considering this profession have a lot to consider as they chart their paths forward.

The Field of Health Care Administration

At its highest levels, health care administration encompasses everything that a health care organization does except the direct provision of health care. The U.S. Bureau of Labor Statistics (BLS) notes that health care administrators focus on the business or operational functions of a health care organization, such as planning, coordinating, and directing services. These functions can involve responsibilities such as:

  • Improving the efficiency with which an organization delivers health care
  • Strengthening the quality of an organization’s health care services
  • Developing goals and objectives for a health care organization
  • Ensuring that a health care organization complies with legal and regulatory requirements
  • Recruiting, supervising, and training the employees of a health care organization
  • Managing a health care organization’s finances
  • Maintaining medical and business records
  • Creating and monitoring a health care organization’s budget

The Skills That Health Care Administrators Need

What health care administrators do involves a broad array of responsibilities, and they need a corresponding range of skills. According to the American College of Healthcare Executives (ACHE), health care administrators benefit from having strong capabilities in the following areas:

  • Business: It’s critical for health care administrators to have skills in areas such as financial management, human resources (HR), marketing, strategic planning, quality improvement, safety, and information management.
  • Communication and relationship management: Health care administrators need to be able to cultivate positive relationships with customers, facilitate communication in their organizations, and negotiate effectively.
  • Leadership: To operate successfully at the helm of a health care organization, administrators need to be able to do things such as articulate a shared vision, manage change effectively and understand the organization’s culture.
  • Professionalism: Health care administrators must embrace accountability, commit to professional development and learning, and strive to contribute to their profession and their communities.

Of course, as ACHE notes, health care administrators also need to possess a sound knowledge of the environment in which their organizations operate. This includes health care systems and personnel, patients’ viewpoints, and the community that their organization serves.

How to Become a Health Care Administrator

Individuals who are just beginning to explore health care administration can benefit from understanding how a typical career might take shape. Knowing how to become a health care administrator can help in setting educational goals and refining career plans. As outlined below, the steps involved are fairly straightforward.

Earn a Bachelor’s Degree

Employment website Indeed notes that earning a bachelor’s degree is the first step in working toward a career in health care administration. Bachelor’s degrees in health care administration, HR, or business administration generally are good degrees to pursue, but individuals who have degrees in fields such as public health or nursing can also enter into health care administration.

Acquire Experience Working in Health Care Administration

Starting in an entry-level position sets a good foundation for working in health care administration. These positions also help individuals solidify their understanding of what health care administration means in the real world. Entry-level positions will likely be at a hospital or health care facility, but individuals can also get started at organizations such as insurance firms, according to Indeed.

According to the BLS, the top five employers of medical and health services managers in 2020 were:

  • Hospitals
  • Physicians’ offices
  • Residential care and nursing facilities
  • Government entities
  • Outpatient centers

ACHE notes that entry-level jobs in health care administration will typically be in areas such as:

  • Finance
  • Patient care services
  • Medical staff relations
  • Marketing and public affairs
  • Planning and development
  • Materials management

Consider Getting a Certification

A number of certifications help those working in health care administration to strengthen their expertise and expand their credentials. Examples are:

  • The Healthcare Financial Management Association’s Certified Healthcare Financial Professional (CHFP)
  • The National Association for Healthcare Quality’s Certified Professional in Healthcare Quality (CPHQ)
  • The Healthcare Information and Management Systems Society’s Certified Professional in Healthcare Information and Management Systems (CPHIMS)

Earn a Graduate Degree

Earning a MHA degree enables individuals to enhance their expertise and qualify for higher-level positions in the field. It’s common for an individual working in health care administration to have a master’s degree, and some employers prefer this, according to the BLS. In addition, employers often require individuals to have a master’s degree to advance to an executive role in health care administration, such as nursing home administrator or clinical manager.

Described in more detail below, MHA degree programs are designed around the competencies that help health care administrators excel in their careers.

What Is a Health Care Administration Degree?

Earning a degree in health care administration is a great way to acquire the expertise necessary to work in the field. What is a health care administration degree, though, and what does it encompass? The National Center for Education Statistics (NCES) explains that health care administration degree programs:

  • Prepare individuals to manage, develop, and plan health care services and operations in organizations and across systems of health care
  • Offer instruction in:
    • Health care business areas, such as management, finance, HR, and resource allocation
    • Legal and policy areas, such as health regulations and laws, health care policy development, and the application of laws and regulations to health care

Individuals can pursue undergraduate, master’s, and doctoral degrees to learn about the facets of health care administration. The Association of University Programs in Health Administration (AUPHA) offers the following summaries of each level of degree program:

  • Undergraduate degree programs in health care administration offer applied studies, skills, and knowledge that an individual needs to begin in an entry-level role. These programs also serve as a good foundation for entering into a graduate program in health care administration.
  • Master’s degree programs in health care administration offer advanced courses in areas such as health care policy, financing, or management; they can also include an opportunity to participate in some form of fellowship, internship, or residency. These programs prepare students for leadership roles.
  • Doctoral programs in health care administration are the highest level of education in the field and usually require the completion of a dissertation; individuals typically need to earn a doctoral degree to teach at the university level.

Health Care Administration Degree Programs Continue to Evolve

Degree programs in health care administration have evolved as understandings of what health care administration is continue to change. The first academic programs in the field emerged in the 1920s, according to a 2020 report in The Journal of Health Administration Education. Since then, these programs have continuously adapted in response to the dynamic nature of health care. For example, such programs have evolved to reflect:

  • A transition from focusing primarily on hospitals to focusing on the entire span of health care services
  • A shift from the time when clinicians filled administration and management roles at health care organizations to the present-day structure in which nonclinical managers with business expertise primarily fill those positions
  • Changes in health care delivery spurred by significant events, such as the passage of the Affordable Care Act and the expansion of Medicaid

As the report noted, health care administration degree programs will continue to evolve in response to factors such as the COVID-19 pandemic, our aging population, and the continued growth of the health care industry.

Health Care Administration Curriculum

Reviewing the health care administration curriculum can provide a useful overview of what degree programs entail and how they align with the components of health care administration. The examples of courses presented below demonstrate the comprehensive nature of these programs.

Health Care Finance Courses

Health care finance courses teach students about financial administration by focusing on the concepts and tools necessary to maintain a health care organization’s financial position. Students learn about topics such as budgeting, pricing, and cost analysis, as well as how to use financial data in decision-making. These courses also offer instruction on translating financial information in ways that enable others, such as governing board members, to understand its meaning.

Health Care Leadership Courses

Courses in health care leadership focus on topics that are relevant in health care settings, such as leading during change and the leadership skills necessary to ensure good communication throughout a health care organization. These courses also teach students how to make high-level decisions based on various sources of information.

Health Care Strategic Planning Courses

Strategic planning courses in health care administration programs offer instruction on the phases of strategic planning, such as assessing needs, conducting feasibility studies, planning for marketing activities, and implementing strategic plans. These courses typically enable students to apply the concepts they learn to real-world examples, replicating the planning and decision-making experiences that occur in health care organizations.

Health Care Information Systems Courses

Courses in health care information systems concentrate on a health care leader’s role in choosing information systems and communicating about those systems with information technology staff and clinicians. Students also learn about implementing information systems and the effects of system implementation on all relevant parties.

Health Care Human Resources Courses

Health care is a very labor-intensive industry, so it follows that HR is a large component of what constitutes health care administration. The HR courses in health care administration degree programs focus on the diverse nature of a health care organization’s staff and ensuring that the HR function supports the overall objectives of the organization. These courses also include instruction on supporting employees and remaining competitive in the labor market.

Health Care Quality Improvement Courses

Courses on health care quality improvement instruct students in evaluating health programs. For example, these courses enable students to acquire knowledge of specific evaluation methodologies that are applicable to health care programs. These courses also give students opportunities to apply those methodologies to real-world situations involving different health care programs.

Epidemiology Courses

Epidemiology courses in a health care administration program concentrate on providing prospective administrators with the knowledge they need to make decisions that protect health. These courses cover topics such as the basic principles of epidemiology and resource allocation as it relates to protecting health.

Health Care Management Trends

Aspiring health care administrators should stay alert to health care management trends so that they know what to expect on the horizon. The trends outlined below demonstrate some of the challenges that health care administrators will need to address as their careers progress.

Implementing New Models of Care Based on Technology

Many of the elements of health care administration are poised to undergo digital transformation. The World Economic Forum has predicted that the health care industry is on the brink of implementing new models of care that’ll depend on technology. For example, it has forecast:

  • Greater use of artificial intelligence in multiple aspects of health care, from workflow automation to clinical decision-making
  • An increase in attempts to address health care inequality by using technology to expand access to care and train more health care workers
  • Increases in the use of telehealth and tools such as biometric sensors and web-based interactive programs to provide care to patients remotely

Shoring Up the Workforce and Supply Chains

A 2022 report in Health Affairs noted trends in health care administration and management that have resulted from the effects of the COVID-19 pandemic. Specifically:

New Strategies for Recruiting and Retaining Workers

The pandemic had a devastating effect on the health care workforce and, as of late 2021, approximately one-third of health care workers had resigned. Health care administrators will need to double down on HR planning and manage the increases in salaries associated with incentivizing health care workers to join their organizations. They will also need to find innovative ways to manage the burnout that current employees have experienced as a result of the pandemic.

Technological Innovations to Reduce Supply Chain Issues

Health care administrators will need to continue developing their purchasing methods and expertise to deal with supply chain challenges resulting from the pandemic. This could involve increased use of technology to refine the collection of data on supply needs, better monitor demand, and optimize fulfillment times to minimize shortages.

Increasing Diversification on the Part of Health Care Providers

Health care administrators will be on the front line of organizational change as health care providers diversify their business models. As McKinsey &Company recently reported:

  • Hospital systems are investing in ambulatory care sites, virtual health ventures, and primary care providers
  • Pharmacy firms are acquiring physicians’ practices and clinics with an eye toward expanding their primary care services
  • Some health care provider systems have created venture capital funds to invest in data analytics businesses, digital health products, and firms that provide virtual health care

Moving Toward Value-Based Care

Overseeing a health care organization’s revenue streams is a significant responsibility within the scope of health care administration, and those revenue streams are evolving. For example, according to a 2022 report in Medical Economics, in an effort to improve health outcomes and lower costs, more value-based care delivery models will emerge across the health care spectrum. Under these models, payment to health care organizations is based on health outcomes (instead of the number of services they provide).

Demand from a younger generation of health care consumers will, in part, drive the move toward value-based care. Stakeholders in health care anticipate increased investment in the information technology necessary to help facilitate this transition, according to the Medical Economics report.

Increasing Cybersecurity in Health Care

Cybersecurity threats to health care organizations are increasing. A historical lack of funding for cybersecurity has made health care an attractive target for ransomware attacks, according to a 2022 report in TechTarget. In the first half of 2022, data breaches and attacks increased significantly. The report disclosed that health care organizations paid the perpetrators of ransomware attacks (in which hackers hold systems or data hostage and demand payment) 61% of the time in 2021; that represented a significant increase compared with 2020 when such ransoms were paid in 34% of cases.

Health care administrators will need to make cybersecurity a priority to properly respond to this trend, protect patient data, and ensure that attackers can’t disrupt the provision of health care services.

Finding a Role in Health Care Administration

The span of health care administration responsibilities is broad, meaning that individuals who are interested in working and advancing in the field have a wide array of career paths to choose from. These professionals can also make a lasting difference as they help strengthen the business side of health care.

Individuals who have an interest in working in health care administration can explore Ohio University’s online MHA degree program as they pursue their professional goals. With specialties in aging studies, business analytics, health care leadership, project management, and quality improvement, the program offers students an opportunity to acquire the expertise necessary for leadership in the field.

Start your journey to a rewarding career in health care administration today.

Recommended Readings

Health Care Administration Careers: Trajectories for MHA Graduates

Is a Master’s in Health Care Administration Worth It?

Master’s Degree in Health Care Administration Salary and Job Outlook

Sources:

American College of Healthcare Executives, ACHE Healthcare Executive 2022 Competencies Assessment Tool

American College of Healthcare Executives, Your Career as a Healthcare Executive

Association of University Programs in Health Administration, Why Pursue a Career in Health Administration?

Centers for Medicare and Medicaid Services, CMS Office of the Actuary Releases 2021-2030 Projections of National Health Expenditures

Health Affairs, “For Health Care Providers, Five Trends to Watch in 2022”

Healthcare Financial Management Association, HFMA’s Certified Healthcare Financial Professional (CHFP)

Healthcare Information and Management Systems Society, CPHIMS Certification

Indeed, How to Become a Health Care Administrator (Plus Job Duties)

McKinsey & Company, “The Future of U.S. Health Care: What’s Next for the Industry Post-COVID-19”

Medical Economics, “What’s Driving the Transition to Value-Based Care?”

National Association for Healthcare Quality, CPHQ Certification

National Center for Education Statistics, The Classification of Instructional Programs

TechTarget, “Healthcare Breaches on the Rise in 2022”

The Journal of Health Administration Education, “Health Services Administration Educational Programs in the United States: An Assessment of Past, Present, and Future Perspectives”

U.S. Bureau of Labor Statistics, Medical and Health Services Managers

World Economic Forum, “Predictions 2022: What Are the Biggest Healthcare Shifts? Here’s What Health Experts Think”