You may not think of healthcare as a business, but it is. Whether they are for-profit, non-profit or government-run, hospitals are attuned to financial practicalities and the need to carefully manage the facility in order to maintain a sustainable business. An unsustainable hospital eventually will be forced to cut services or even shut down.
Saving lives while containing costs
Due to a variety of factors such as insurance payouts and the resources required, some procedures are more profitable to hospitals than others. Though every hospital will react to changes in profitability, for-profits are more likely to react quicker than non-profits or government hospitals. For instance, open-heart surgery is a profitable procedure and more than 40 percent of all for-profit hospitals offer the service, whereas a little over a third of non-profits offer it. Market pressures from for-profits hamper the ability for some non-profit hospitals to enter or stay in the arena.
Making the big decisions
Thinking of healthcare as a business requires business savviness, financial acumen and top-notch management skills. Earning a Master of Business Administration (MBA) with a Concentration in Healthcare Management is one way to move up in a career as a hospital administrator. A hospital administrator is responsible for studying the facility’s finances and determining whether or not, for example, the hospital can afford to keep the emergency department (ED) open. EDs are relatively unprofitable for most hospitals, but are an essential safety net for many Americans. Hospitals dealing with low profit margins or those that were for-profit were more likely to close the ED than the non-profit counterparts. A hospital administrator must evaluate a variety of factors in making the difficult decision about which services to offer and which facilities to close.
Defying trends
Hospital administrators with an MBA in Healthcare Management working in a non-profit facility are trained to defy trends. Non-profits are often obligated to offer certain services to their patients, forcing the hospital to work around various constraints, such as cost. In these cases, hospital administrators have to balance thinking of healthcare as a business with the hospital’s mission. In these cases, the analytical, technical and problem-solving skills obtained through a higher education comes into play. Solutions could involve making modifications to schedules, introducing cost-effective electronic management systems, or elevating nurses to management positions to help shape policies that can reduce cost while maintain high standards for patient care.
While it is important to think of healthcare as a business, considering the financial management and administrative needs of each facility, human lives and community needs sometimes supersede what can and cannot be done. It is up to trained hospital administrators to find that balance. Earning an MBA in Healthcare Management is one way to gain the skills and knowledge necessary to make the tough calls.
Sources:
http://profitable-practice.softwareadvice.com/should-you-get-a-healthcare-mba-0114/
http://www.bls.gov/ooh/management/medical-and-health-services-managers.htm#tab-1