Health Care Management

Health Care Management


To understand the roles and responsibilities of health care managers, you have to go behind the scenes to look at the corporate structure of the health care provider itself and understand how hospitals and other health care providers are organized, their corporate hierarchies, and the roles their managers play.

Hospital Management

Hospital Systems

The mergers and acquisitions that created hospital systems and the diversification of them into other levels of care also led to centralized system and corporate structures. These organizations’ executives are usually at the vice president level and have responsibility for the entire system, overseeing and coordinating the operations of the system members, hospitals, nursing homes, and physician practices. Centralized services are typically finance, human resources, materials management, information services, and business development.

Many systems have also centralized other services and departments, ranging from support areas of environmental and maintenance services, to clinical areas such as respiratory therapy and rehabilitation services. In these organizations, a corporate director and sometimes assistant directors are hired to oversee the operations of the clinical service in all of the company’s settings. Corporate services are housed at one of the system’s facilities or in separate office spaced leased or owned by the system.

Triad-Governing Board

Regardless of the ownership, control, or type of services a hospital provides, most hospitals are organized in the same manner. The traditional model for hospitals is a triad consisting of a governing board, administration, and the medical staff. Although the roles of these entities have grown and changed in recent years, each still retains basic responsibilities.

The governing board or board of trustees of a hospital or health systems has fiduciary responsibility for the organization. They must ensure that the organization is compliant with all applicable laws and regulations, is run in a financially sound manner, provides quality care, and meets the health care needs of the community. Initially, hospital board members were primarily philanthropists who donated large sums of money for building projects and the establishment of new services and programs. As health care and hospitals grew larger and more complex, trustees with financial, legal, political, and technical expertise joined boards. Increasingly, more physicians have become board members to assist in planning and policy decisions involving complicated medical issues. The hospital or system chief executive officer is usually a member of the governing board, either as a full voting member or ex-officio.

One of the major duties of the governing board is to hire a chief executive officer, who in turn hires the members of the executive staff. The executive staff, the chief financial officer, the chief operating officer, and the various vice presidents (of nursing, human resources, operations, etc.) are responsible for hiring the directors and managers (often called department heads) of the support (housekeeping, maintenance, food service), and ancillary (laboratory, radiology, respiratory therapy) departments. There are also numerous nursing managers for areas such as the inpatient units, operating room, and emergency room. The department heads recruit supervisors to help carry out their functions.


The medical staff elects officers to oversee their functions, such as credentialing new physicians and quality reviews, and work with the governing board and administration of the hospital to meet community health needs and ensure a high quality of care. This is accomplished through a committee structure; physician committees to review and make recommendations regarding different aspects of care (for example, pharmacy, and therapeutics committee for medication use, transfusion committee to review blood usage), and administrative committees (long range planning committee, equipment committee) that include administrative staff and sometimes members of the board. The medical staff offices generally consist of a president, vice president, treasurer, and secretary. The medical executive committee consists of the officers, the clinical department (medicine, surgery, pediatrics) chairs, and several at-large members elected by the medical staff. This body is responsible for the review and approval of applications for membership to the medical staff, monitoring medical care, and developing medical staff policy and procedures.

Service Line Models and Matrix Structures

There are hospitals and health systems that are organized around a service line model. With this approach, major clinical services that the organization provides, such as cardiology, obstetrics, and orthopedics, have separate structures reporting to a service line director who in turn reports to a vice president, chief operating officer, or the chief executive officer. The service line model strengthens the focus on a specific clinical area and often results in increased profitability and improved quality of care outcomes.

The complexities of reporting relationships, one manager reporting to two or more higher level managers (for example, a cardiology service line director reporting to the chief operating officer for administrative matters and the vice president of nursing for clinical matters) in an organization utilizing this approach frequently leads to what is referred to as a matrix structure. Tables of organization in this type of structure often reflect dual reporting relationships and contain dotted lines that define a collaborative relationship (e.g., the orthopedic service line director and the vice president for ambulatory care) between two individuals.

Long-Term Care

Nursing homes are organized much the same way as hospitals, but on a smaller scale. Nursing facilities are required to have a governing body, usually composed of community members, or designated individuals who perform this function. The governing body develops and implements policies and procedures for the operation of the facility and appoints an administrator licensed by the state to manage the facility.

Governing Boards

There are several types of governing boards. Single facility boards oversee homes that are owned by a single individual, partnerships, or run by a hospital or religious organization. Corporate boards direct regional groups of facilities or national chains. Many of the national chains are public companies with shareholders and therefore focus heavily on earnings, profits, and stock prices. State facilities and veterans’ homes have board members who are political appointees. In each of these scenarios, the nursing home administrator is responsible, either directly or through a corporate structure, to the governing board.

Nursing Home Management

The management of a nursing home consists of the administrator, associate or assistant administrators, director of nursing, medical director, and managers of the individual departments. Larger nursing homes (more than 150 beds) usually have an associate or assistant administrator responsible for specific departments and functions. The director of nursing is a key member of the management team as the head of the largest department, and along with the medical director, the primary person responsible for quality of care and clinical decisions. The department managers include directors of rehabilitation, social services, admissions and marketing, staff development, food service, housekeeping, maintenance, activities, and the business office.

Assisted Living Facilities

The management of an assisted living facility consists of an administrator, a nursing or wellness director, and several department managers. Department heads are generally an activities director, a food service manager, an environmental services director, and a marketing director. In many states, the administrator must be certified by meeting specific educational requirements and passing a written examination.

Adult Day Care Facilities

Managers or directors of adult day care centers come from a number of backgrounds, including social services and nursing. Nursing, social work, activities, therapy, dietary, transportation, and bookkeeping staff report to the director. Larger programs may also have a marketing director.

Home Health Care Facilities

Directors of home care services tend to have a nursing background. Corporate structures in larger regional companies include positions such as vice president of operations, vice president of business development, chief financial officer, and director of clinical services. Many of those filling corporate positions come from a management or business background.

Long-Term Acute Care Facilities

The management of a long-term acute care facility (LTAC) takes on several forms. Those in an acute hospital may be operated by that hospital or owned and operated by an outside company. These outside operators are long-term care companies that may own nursing homes, assisted living facilities, home care agencies, rehabilitation hospitals, and other units within acute care hospitals. There are also arrangements through which an acute care hospital owns LTAC units and contracts with a management company to operate it.

LTACs have their own management structure with a board of directors, executive director or administrator, chief financial officer, and department heads. Regional and national companies (e.g., Kindred) operating LTACs have regional directors of operations, marketing, and business development in addition to corporate executives. The rapid growth of these facilities will create new management positions at the facility, regional, and corporate levels.