Healthcare Management

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Contributed by: Shubhi Kotiya

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Healthcare Management

What is Healthcare Management? Meaning

Healthcare management is exactly what the name implies: the management of healthcare facilities, such as clinics or hospitals, as well as companies in the healthcare industry (pharmaceutical, biotechnological and medical devices companies).

It includes both general managers (with an overall responsibility for an entity) and functional managers (finance, human resources, marketing, quality assurance, etc.) operating at various management levels.

What makes Management of a Healthcare Facility different?

  • A General Healthcare Manager (GHM) is in charge of ensuring a facility is running as it should in terms of budget, the goals of the facility's practitioners and the needs of the community. The GHM also oversees the day-to-day operations of the facility.
  • The GHM also acts as a spokesperson when providing information to the media.
  • The GHM also collaborates with medical staff leaders on issues such as medical equipment, department budgets, planning ways to ensure the facility meets their goals and maintaining a good relationship with doctors, nurses, and all department heads.
  • The GHM also makes decisions about performance evaluations, staff expectations, budgeting, social media updates, and billing. 
  • Since health is a topic that can be concerned with life and death of an individual, the responbility of Healthcare Managent comes with a great responsbility of making the right decisions. The management personnel typically work under strict regulations as laid by the government, hospital departments and regualtory bodies.
  • Management in healthcare used to have a relatively low-profile and was typically performed by direct-care professions like medical specialists and nurses. However the importance of the management profession within healthcare has been rising dramatically in recent years, due largely to the many challenges of efficiency, quality, technology and resulting organizational change described below.

Increasing Demand for Healthcare Services

The demand for healthcare services continues to increase because of several factors:

  • Aging population
  • The increasing prevalence of chronic diseases
  • The search for a higher quality of life
  • The increasing prevalence of infections and megabugs
  • The increasing occurence of lifestyle diseases
  • New technologial possibilities (internet, mobile)

Trends in Healthcare

Healthcare organizations are in a process of reimagining their core strengths, the value they create and how best to deliver it. Payers, providers and pharmaceuticals are rethinking their business models, drawing on the power of today's highly connected world to rewire their organizations and reinvent how their highly skilled professionals serve healthcare consumers.

  • VOLUME TO VALUE: Companies are moving away from paying for volume to paying for value, putting customers at the center of the exchange.
  • INFORMED PATIENTS AND RISING CONSUMER EXPECTATIONS: Healthcare consumers increasingly expect a seamless experience across digital and personal interactions. Around the world, many patients are becoming more informed about, and more empowered to make, healthcare decisions. Rising education and literacy levels are fueling this change. Increased internet access and the growing use of digital devices have fundamentally altered the information available to patients. As a result, many providers see an opportunity to become more patient-centric. New technologies that make possible online consultations, multidisciplinary team support and other new models of care delivery are helping hospitals become more patient-centric.
  • PATIENT CENTRICITY: In this data-driven era, companies, hospitals and healthcare practitioners are increasingly focusing on personalized treatments for their patients, based on their needs, lifestyle, and their health data.
  • TECHNOLOGY DISRUPTION: Technology is helping equalize the asymmetry and relationship between medical professionals and patients. 
  • Shift from disease treatment to HEALTH MANAGEMENT. Health management is a term that encompasses not only the regular disease diagnostics and treatment, but also wellness, healthy living, disease prevention, and rehabilitation.
  • Quest for BETTER, CLINICAL OUTCOMES AND QUALITY, decreasing the probability of errors.
  • RETAILIZATION of health services. The old model of hospitals as stand-alone facilities that provide all services to all people is disappearing rapidly. Increasingly, hospitals are becoming just one component of larger, interdependent ecosystems that include multiple other facilities (e.g., primary care providers, clinics, pharmacies, rehabilitation centres).
  • Increased focus on VALUE AND ACCOUNTABILITY. The rising cost of healthcare has been a major concern in most countries. Payment reforms that focus on value and introduce greater risk-sharing between payers and providers are being tested in a range of health systems. For instance, episodes of care have been introduced in the United States; diagnosis-related group (DRG) schemes are being rolled out nationwide in China. Digital interventions that support connected electronic health records (EHRs), hospital automation, care coordination, and primary prevention can help support payment reforms and deliver considerable savings.
  • FAST TECHNOLOGIAL ADVANCEMENT, digitization, and automation:
    • On demand side: new technologies have altered consumer expectations. An increasing number of todays patients want healthcare services to be delivered with greater efficiency and in convenient, comfortable, near-normal settings. Shaping of "Digital Medicine", consisting of various tools (aps) for measurement and intervention in the service of human health.
    • On supply side: a host of new technologies can now be integrated into care delivery: artificial intelligence (AI), robotics, precision medicine, 3-D printing, augmented reality/virtual reality, genomics, telemedicine, and more. Adoption of these technologies is being driven by both immediate needs (e.g., cost control and efficiency optimization) and longer-term goals (especially greater precision, fewer errors, and better outcomes).
  • PROFESSIONALIZATION of management.

Healthcare Regulations

Many countries have regulatory bodies governing the regulations for healthcare within the country. These are the main types of healthcare regulations:

  • Laws which regulate the operation of hospitals, clinics or other health services.
  • Laws which provide for health system financing, such as social health insurance laws.
  • Laws which regulate the quality of health service provision.
  • Laws which protect patient rights.
  • Laws which regulate the manufacture, marketing and sale of food and medicines.
  • Laws which regulate the safety and efficacy of medicines and medical devices.
  • Laws which control the required training, qualifications and practice standards of health workers.
  • Laws which regulate the collection and use of health information (including protecting patient privacy).
  • Laws which protect public health from communicable diseases or other public health risks, providing for public health surveillance and powers to take action to prevent the spread of disease or other public health risk.

Matt Portch, (2014) "Volume to Value: A shift in pharma's business model".
Ryan Chen, Anat Mooreville (2019) "The Sociocultural Megatrends Transforming Healthcare".
Bo Chen, Axel Baur, Marek Stepniak, and Jin Wang (2019), "Finding the future of care provision: The role of smart hospitals", McKinsey.

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