Health Care Management

Health Care Management

Industry Outlook

Employment for medical and health services managers is expected to grow much faster than the average for all careers through 2028, according to the U.S. Department of Labor (DOL). The DOL reports that “as the large baby-boom population ages and people remain active later in life, there should be increased demand for healthcare services. This means greater needs for physicians and other healthcare workers, medical procedures, and healthcare facilities, and therefore greater needs for managers who organize and manage medical information and healthcare staff. There should also be increased demand for nursing care facility administrators as the population grows older. Demand in medical group practice management is projected to grow as medical group practices become larger and more complex. In addition, widespread use of electronic health records will continue to create demand for managers with knowledge of health information technology and informatics systems.” Demand will also increase in the offices of health practitioners, as services that were formerly provided in hospitals are shifted to these settings.

The DOL reports that management careers in the following medical and health services sectors will grow much faster than the average through 2028:

  • outpatient care centers: 56.2 percent
  • home health care services: 47.2 percent
  • ambulatory health care services: 40.3 percent
  • specialty (except psychiatric and substance abuse) hospitals; state, local, and private: 36.2 percent
  • offices of other health practitioners: 36.0 percent
  • services for the elderly and persons with disabilities: 35.3 percent
  • offices of physicians: 34.2 percent
  • offices of physical, occupational and speech therapists, and audiologists: 28.0 percent

Employment for managers is expected to decline in the following health care sectors:

  • other residential care facilities: -2.5 percent
  • skilled nursing facilities: -3.3
  • vocational rehabilitation services: -7.5 percent

The recruiting firm B.E. Smith reports that turnover among senior health care executives continues to be an issue. One reason for this turnover is the average age of health care CEOs (59 in 2017, according to Yaffe & Company). To address this issue, B.E. Smith reports that “organizations are expanding horizons to fill the leadership gap, looking beyond the healthcare industry for senior talent, both to augment the candidate pool and to import new skills.” Those with managerial experience in finance and hospitality were cited as the most desirable sources of managerial experience from outside the industry, followed by those from the information technology and life sciences/pharma sectors.

There is also a shortage of chief nursing officers, and not enough replacements are in the pipeline. More than 50 percent of nurses are over age 50, and 73 percent of those over age 50 are considering retirement, according to the 2017 AMN Healthcare Survey of Registered Nurses. Many nurses are uninterested in pursuing management positions. In fact, 61 percent of registered nurses surveyed said they did not want to pursue a career in management.

Some industry segments will not grow as fast as others. Hospitals will continue to employ the most medical and health services managers but the number of new jobs created at these organizations is expected to increase at a slower rate in hospitals than in many other industries because of the growing use of clinics and other outpatient care sites. Since there are many hospitals, there will continue to be many job openings for managers in this specialty. Changes in the health care system are taking place because of the need to control escalating costs. This will have the greatest impact on hospitals, traditionally the largest employer of health services executives. Medical and health services managers with experience in large hospital facilities will enjoy an advantage in the job market, as hospitals become larger and more complex. According to the American Hospital Association, the trend toward hospital systems that include laboratories, group practices, ambulatory care facilities, and ancillary care will increase. In addition, separate companies are being set up to provide services such as ambulatory surgery, alcohol and drug rehabilitation, or home health care. These organizations will compete with hospitals for patients and funding.

With hospitals adopting a more business-like approach aimed at lowering costs and increasing earnings, demand for MBA graduates should remain steady. Individuals who have strong “people” skills and business or management knowledge will find excellent opportunities as administrators in nursing homes and other long-term facilities.

Americans are living longer, and although seniors are healthier today on average than they were in the past, this demographic group still requires more care than other age groups do. This suggests that as the number of senior citizens increases, demand will increase for managers who oversee operations at nursing homes, long-term care facilities, and other settings where health care is provided to the elderly.

Managers also will be needed to oversee the digitization of patient records and to ensure their security as required by law. Additional demand for managers will stem from the need to recruit workers and increase employee retention, comply with changing regulations, implement new technology, and help improve the health of their communities by emphasizing preventive care.

More opportunities will be available with health care management companies that provide management services to hospitals and other organizations, as well as specific departments such as emergency, managed-care contract negotiations, information management systems, and physician recruiting.

Applicants with work experience in the health care field, professional certifications, and strong business and financial management skills should have the best opportunities. Competition for jobs at the highest management levels will be keen because of the high pay and prestige.

Salaries of health care managers depend on the type of facility, its geographic location, the size of the administrative staff, budget, and the policy of the governing board. Salaries ranged from less than $58,820 to more than $189,000 in May 2019, according to the DOL. Median annual earnings of medical and health services managers were $100,980. Mean annual wages were highest in the District of Columbia ($150,040), New York ($147,000), Hawaii ($133,320), California ($133,040), and Massachusetts ($132,960). Salaries for managers varied by facility type. For example, managers at general medical and surgical hospitals earned mean annual salaries of $124,180, while those who were employed at nursing care facilities earned $97,300.

The coronavirus pandemic that started in 2019 has increased demand for health care workers and placed tremendous pressure on health care management companies. The distribution of vaccines for COVID-19 in 2021 will increase people's confidence in returning to doctors' offices for preventive health care. Moving forward, what is also expected is the U.S. population's increased focus on health care management. According to a report by research group Mercer, the demand for healthcare workers will outpace supply in 2025, and growth in this industry is "poised to explode over the next decade." Post pandemic, there may be an increase in mergers and acquisitions in the health care management industry. The research group Bain & Company predicts a boom in health care consolidation after the pandemic is contained. According to an article by Bain, "there has been consolidation over the last decade as organizations pursue economies of scale and expand horizontally. Post-Covid-19, we expect that larger health care groups and investors will accelerate their acquisitions of smaller hospitals, physician practices, and alternative sites of care."