WK 3 D 1 & 2 & Essay

WK 3 D 1 & 2 & Essay



WK 3 D 1 & 2 & Essay

            Healthcare management is important in clinical institutions. To understand its importance, it is mandatory to understand the subject. Healthcare management can be described as the field relating to leadership and management in medical institutions such as hospitals (Walshe & Smith, 2011). It ensures effectiveness in a hospital’s service delivery through several aspects. For instance, it ensures maintenance of patient safety in healthcare institutions. It also enhances quality of care provided, and cost-effectiveness, in the aforementioned institutions. An increasing population, and life expectancy, has required proper healthcare management policies and leaders. Leadership is the act of providing influence to others, based on a manager’s character, opinion and examples. Similarly, a significant rise has been experienced in technology. This has required the medical industry to seek proper leadership, for successful implementation, in its institutions (Jasper & Jumaa, 2005).

            The field of healthcare management is based on various leadership and management traits and best practices. Various theories have emerged in support of the aforementioned traits. This outline discusses such traits and theories, and their respective roles in ensuring organizational effectiveness, concerning healthcare institutions. A multicultural and multidisciplinary approach is maintained towards the discussion. To understand the discussion, it is important to note that; healthcare institutions are categorized into for-profit and non-profit institutions. It is therefore clear that managers and leaders from the two segments have different objectives. As a result, they need to develop different traits, for effectiveness in their leadership roles.

            Generally, for-profit managers seek to maximize the organization’s revenues and profitability. From that respect, it is correct to compare them with business leaders in the corporate world. On the other hand, non-profit leaders seek to maximize the institution’s service delivery and improving its quality. For-profit managers have various traits. Successful business leaders, in healthcare, need a business-oriented personality. It is important to note that, for-profit healthcare leaders need to expand their view of medical practice. It expands beyond a calling; the practice is a lucrative business field. As a result, healthcare managers need acquaintance with business education, and its ideals. As a result, they can apply emerging business trends to their respective healthcare institutions. In consequence, they are able to achieve profitability, without compromising on the quality of care offered.

            Secondly, healthcare managers in for-profit institutions need skills in sales. ‘Sales’ is an art concerning influence on people to purchase what is offered for sales. Therefore, a sale holds a great correlation to relationship building. Healthcare greatly depends on relationships between practitioners and their patients. Healthcare managers therefore need to offer good examples on relationship building to achieve their objectives. Thirdly, successful healthcare managers have a focus on patient needs. As a result, such managers focus on finding faster or more effective ways of serving their patients. To implement this, healthcare managers and leaders need a humble personality. This is because, effective ways are only observable through interaction with patients in waiting areas and wards (Jasper & Jumaa, 2005).

            Non-profit healthcare leaders require various traits, for their success in the field. First, they need to develop independent thinking. This is attributable to several reasons. Most importantly, healthcare is facing numerous changes. For instance, a lot of research is being carried out, resulting into many successful studies. These studies result into numerous opportunities for change in healthcare institutions that are usually unforeseen. In consequence, healthcare leaders need to take bold steps to steer their institutions forward. Similarly, healthcare leaders are inquisitive in nature. This allows them to keep abreast with the latest trends in healthcare management. As a result, they are able to implement new management policies successfully.

             Healthcare management is focused on improving medical service delivery. Successful healthcare managers are quantitative in many respects. They consistently measure various performance metrics in the organization. Leaders are required to plan, set, implement and evaluate their goals. To evaluate institutional progress in the aforementioned goals, various metrics need evaluation by managers. For instance, staffing ratios are a measure of quality of care in the organization. Productivity of employees needs close monitoring by managers. Productivity is measurable through tasks done, or work-hours maintained.

            To measure quality in healthcare provision, managers need to evaluate wait times experienced by patients. The states of facilities in their institutions also require close monitoring. In this respect, we see that healthcare managers are very observant. They hardly miss details in their institutional operations. Effective healthcare managers are servant leaders in nature. They build great relationships with those working below them. This is achieved through constant contact with employees and leadership by example. Such leaders also motivate and inspire their employees. As stated earlier, healthcare is a field dependent on good relationships. In consequence, the good relationships between managers and their employees are passed on to employees and their patients.

            Healthcare management bases itself on various theories. They include; the Attribution theory, theory on Evidence-based management and the Utilization theory. The aforementioned theories have a significant influence on the field of healthcare management. For instance, they enable managers to unlock and maximize productivity in their employees. The attribution theory asserts that leaders require explanations for occurrences in their organizations. In this way, it is seen that it is a means for evaluating the institution’s performance in delivery of services. An attribution is as a reason used by an employee to describe a result.

It may be either a positive or a negative attribution. In line with that, leaders relate organizational successes and failures to attributions. Over time, employees develop personal attribution styles, for various occurrences in their organizations. They may be positive or pessimistic. Martinko (2004) explains that effective healthcare managers need to note these attribution styles. These styles provide necessary feedback. For instance, healthcare managers can improve productivity in employees with pessimist attribution styles, by giving them simpler tasks earlier on. Such tasks enhance their confidence, thus productivity.

In healthcare institutions, leaders may apply the attribution theory’s concepts to explain the rift between highly productive and less productive personnel. The attribution theory assumes that problems may arise in the delivery of healthcare. When issues arise, employees may be left with feelings of distrust amongst one another. In this respect, the theory enables healthcare managers to create effective work environments. This is seen through the aforementioned attributions. Attributions also enable healthcare personnel to note the reasons for such occurrences.

Utilization Management (UM) is a means for analyzing the quality and efficiency of services offered in a healthcare institution. Through this process, healthcare managers assess the services to determine whether patients receive efficient and appropriate quality standards. In hospitals, Managers assess this through formal review of patients. To set goals in institutions, this theory requires healthcare managers to undertake two steps. First, they need to determine the institution’s needs. Finally, the theory requires a study showing the main beneficiaries of such a goal (Stahl, 2004).

UM strategies have several benefits to healthcare institutions. For instance, hospitals achieve decreased lengths of stay by patients. The quality of care is increased, while, reducing costs in this approach. Utilization Management also has advantages for patients. For instance, they experience a timely discharge from hospitals. Similarly, UM practices increase quality of healthcare services. As a result, patients experience minimal risk of hospital-acquired infections, and errors associated with medical malpractice. It is important to note that the aforementioned management theories only provide insights on what can be done to improve productivity. Implementation is the managers’ responsibility.


Walshe, K., & Smith, J. (2011). Healthcare management. Maidenhead, Berkshire, England: McGraw Hill/Open University Press.

Hone, F. (2008). Why Healthcare Matters: How Business Leaders Can Drive Transformational Change. Amherst: HRD Press.

Lee, B. D., & Herring, J. W. (2009). Growing leaders in healthcare: Lessons from the corporate world. Chicago, Ill: Health Administration Press.

Gapenski, L. C., & Pink, G. H. (2007). Understanding healthcare financial management. Chicago: Health Administration Press.

Jasper, M., & Jumaa, M. (2005). Effective healthcare leadership. Oxford, UK: Blackwell Pub.

Weston, D. (2008). Infection prevention and control: Theory and clinical practice for healthcare professionals. Chichester, England: John Wiley & Sons.

Stahl, M. J. (2004). Encyclopedia of health care management. Thousand Oaks, Calif: Sage Publications.

Martinko, Mark. (2004). Attribution Theory in Organizational Sciences: Theoretical and Empirical Contributions. Advances in Attribution Theory. Information Age.

Kovner, A. R., Fine, D. J., & D’Aquila, R. (2009). Evidence-based management in healthcare. Chicago: Health Administration Press.

Baluch, A. M. C. (2012). Human resource management in nonprofit organizations. New York: Routledge.

Discussion 1a

            Approximately 50 million Americans are uninsured. Of this number, 59 percent of them are under the age of 35. Furthermore, adults between 18 and 34 years account for nearly 30 percent of the uninsured. There are 24 million working Americans lacking insurance. Of these citizens, around 60 percent claim that their employers do not offer medical insurance. In the same light, approximately 5 percent of hospital admissions are uninsured, leaving a huge bill behind. Statistics highlight that uninsured Americans have a lower probability of visiting hospitals for preventive healthcare. This is attributable to the prohibitive cost of healthcare in the United States (Kotlikoff, 2007). Joe has experienced dizzy spells without seeking medical attention, thus his accident. He works two construction jobs, which most likely have little wages. Furthermore, Joe is 27 years old, thus, he accurately fits the profile of an uninsured American (Fabbri & Monfardini, 2011).

            From the instance provided, it is deducible that, Joe is either a Private Pay patient or an individual with no health insurance. There are several possibilities for the hospital’s reimbursements for Joe’s bill. In the instance that Mr. Smith is able to pay, the hospital will bill him full charges, probably above costs, as per its Private Pay patient’s policy. Due to his admission in a not-for-profit, his debt may be waived, considering his economic status. Not-for-profit healthcare institutions are given a tax-exempted status in the US. Lee (2009) states that costs of medical care passed on as a charity are therefore reimbursed through tax deductions.

            Several steps may be taken by a medical organization, to minimize effects of the economic downturn and unemployment in its surrounding community. First, the organization needs to implement cost reduction measures. For instance, more efficient surgical procedures could be implemented. In the same light, hospitals could use EMRs to manage provision of care. This will enable patients to enjoy lower charges. Secondly, hospitals should charge patient for services rendered. They should desist from bringing up hidden charges. This is possible through efficient cost management by hospitals. The institutions should be careful not to over subsidize treatment, to all patients. This will allow an opportunity for those with greater need for the treatment. Finally, the hospitals should focus their charges towards outcomes and not, procedures carried out. This will allow patients to pay for only what benefits them (Lee, 2009).


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Fabbri, D., & Monfardini, C. (2011). Opt Out or Top Up?: Voluntary Healthcare Insurance and the Public vs. Private Substitution. Bonn: IZA.

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Kotlikoff, L. J. (2007). The healthcare fix: Universal insurance for all Americans. Cambridge, Mass: MIT Press.

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Lee, R. H. (2009). Economics for healthcare managers. Chicago: Health Administration Press.

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Discussion 1b

Current Healthcare System

            From the scenario provided, there are several questions evoked on the American healthcare system. Joe Smith provides an instance of an American without any form of health insurance. As a result, the United States’ healthcare system has experienced great debate. Healthcare institutions often have state-of-the-art facilities, and access to the latest treatments in the medical field. However, the cost has been prohibitive for many Americans and smaller employers. In this respect, we see the system as inefficient, due to its fragmented nature. This is very questionable, considering 17 percent of the American GDP is spent on healthcare costs. This is much higher than other countries in the developed world. However, countries such as Switzerland have met their healthcare needs with better results (Eibner, Kauffman-RAND Institute for Entrepreneurship Public Policy &. Institute for Civil Justice (U.S.), 2008).

            To understand the healthcare system, it is necessary to identify its structure. Sixty four percent of Americans enjoy employer-sponsored health insurance. Nearly 16 percent of such Americans are enrolled in Medicaid program, a federal health insurance program. However, around 21 percent of Americans are uninsured. There are various reasons for the current state of affairs. Medicare mostly covers elderly Americans, those aged 65 and above. It is a single payer scheme paid for by the government, through tax dollars. Medicaid is another federal healthcare initiative. It caters for low-income people, as well as, the disabled. This program is jointly financed by state and federal governments. However, there are many points from which the government can disqualify people from such programs (Harris & Cothran, 2006).

            In the United States, there are several forms of private health insurance. First, there exists employer-sponsored insurance. In this form, employers offer medical cover as part of employee perks. In most cases, employers only have to bankroll the programs. Funds provided are managed by institutions such as Cegna and BlueShield. However, the benefits of such packages vary with each employer. There also exists an individual market for private health insurance. In this segment, an individual may pay for the medical cover on their own. However, insurance companies are able to deny such individuals due to their medical conditions, unlike cover provided by employers. As a result, we see that the U.S healthcare system as highly segmented one. This has locked out the poor from accessing medical services (Shaw, 2010).


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Shaw, G. M. (2010). The healthcare debate. Santa Barbara, Calif: Greenwood.

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Harris, N., & Cothran, H. (2006). Does the United States need a national health insurance policy?. Detroit: Greenhaven Press.

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Eibner, C., Kauffman-RAND Institute for Entrepreneurship Public Policy., & Institute for Civil Justice (U.S.). (2008). The economic burden of providing health insurance: How much worse off are small firms?. Santa Monica, CA: RAND Corp.

Bell, J. (2006). What’s keeping you up at night? The new risks facing hospitals. Healthcare Financial Management, 65(2), 51-57.

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The Patient Protection and Affordable Care Act

            The Patient Protection and Affordable Act is a law enacted on March 23, 2010 by President Barack Obama. However, it comes into full effect, on the first day of the year 2014. The legislation is expected to bring radical, yet positive, changes in the American healthcare system. In its development, the PPACA was targeted at expanding health insurance to the poorer Americans. It is also expected to bring down the cost of healthcare provision in the country. Reforms entrenched in the legislation will see expansion of the Medicaid program to over 15 million poor Americans. The legislation also hopes to curb the ever increasing healthcare costs in the country (Gray & Sullivan, 2011).

            To receive Obama Care, Mr. Smith has to qualify, in the stipulated requirements. If his annual income stands below $15,856, he qualifies for Medicaid public insurance. However, if his income stands above that, he will have to purchase insurance on his own (Allen & United States, 2004).  Obama Care is useful in several respects. First, it places limits on how much insurance companies can profit from the packages they offer. Similarly, it prevents them from denying people insurance, due to financial backgrounds or ‘pre-existing conditions.’  To receive treatment, Joe is required to first register for Obama Care. This is done via a relatively simple online application. According to a census report in 2011, the number of uninsured 19 to 25 year old people experienced decline in numbers by 1.6 percent. It is further stated that only a few states offered tax credits. Therefore, expansion of Medicaid is impossible in all states. As a result, Smith needs to first identify with the availability of Medicaid programs in his state of residence (Lippman et al, 2006).


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Gray, B. J., & Sullivan, K. C. (2011). Provisions in the Patient Protection and Affordable Care Act (PPACA). New York: Nova Science Publisher’s, Inc.

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Lippman, F., Silverman, R., Rogers, J. S., Shirley, J., & Nova Southeastern University. (2006). Medicaid. Ft. Lauderdale, FL: Nova Southeastern University.

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Allen, K. G., & United States. (2004). Medicaid managed care: Access and quality requirements specific to low-income and other special needs enrollees. Washington, DC: U.S. Government Accountability Office.

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Discussion 2a

Managing Financial Budgets

            Healthcare facilities are complex institutions to run, as per a financial perspective. For instance, they require lots of costs and expenditure, in their activities. Institutional costs and reimbursements are dividable into two categories; fee for service reimbursements and episode-of-care reimbursements. In this sense, the term ‘reimbursement’ refers to compensation received, by practitioners, for rendering of medical care to patients. In fee for service reimbursements, patients are required to pay a specific amount for treatment, with regards to each service provided. In this model, healthcare institutions levy a fee for each service rendered (Griffith & White, 2005).

The recipient’s health insurance provider pays for each fee, as long as the services are covered by its mandate. An instance of this reimbursement model is ‘Self-Pay.’ In ‘Episode-of-care reimbursement,’ healthcare institutions receive a lump sum for services rendered to patients of a particular ailment, by medical insurers. In this model, an emphasis is placed on an ‘episode.’ The end result is a decrease in costs of reimbursements. The costs held in fee-for-service treatment, such as individual charges are eliminated as a result. Therefore, it is seen that episode of care is a more cost-effective form of reimbursement for healthcare organizations. The reimbursements provided by this episode of care are based on industry averages. Healthcare providers that cost above average end up losing revenue in service delivery (Buchbinder & Shanks, 2011).

To avoid such situations, healthcare managers need to understand the financial concepts underlying the medical industry. Managers in for-profit institutions need to ensure that costs are within their budgets. This will ensure profitability. Healthcare managers in non-profit institutions need to ensure that treatments offered as charity do not exceed the budgeted limits (Dunham-Taylor & Pinczuk, 2006). Healthcare institutions also have to implement more cost-effective ways of providing treatment. This will prevent loss-making when receiving payments from episode-of-care insurers.


Griffith, J.R. & White, K.R. (2005). The revolution in hospital management. Journal of Healthcare Management, 50(3), 170-189.

Buchbinder, S. B. & Shanks, N. H. (2011). Introduction to health care management (2nd ed.). Sudbury, MA: Jones and Bartlett Publishers. ISBN: 9780763790868.

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Dunham-Taylor, J., & Pinczuk, J. Z. (2006). Health care financial management for nurse managers. Sudbury, Mass: Jones and Bartlett Publishers.

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Discussion 2b

Phoenix House is a non-profit drug rehabilitation organization. It carries out its programs through several centers in the 10 states it is located in. Transformations Drug and Alcohol Treatment Center is located at Delray Beach, Florida. It is a for-profit institution that provides luxury living for its patients. In the healthcare industry, there are several differences between for-profit and non-profit institutions. For starters, it is important to note that non-profit healthcare providers are tax-exempt, as qualified under section 501(c) (3) of the Internal Revenue Code.

            In Phoenix House, its budget is mostly reliant on donations. As a result, they tend to have greater flexibility on budgeting costs. Due to its non-profit nature, Phoenix House centers charge minimal fees. The treatment provided is offered as charity to the patients. As a result, they tend to attract the uninsured, and Medicare dependent patients. As a result, most reimbursements are oriented towards the federal funded Medicare. However, the institutions also attract privately insured patients. Phoenix House has various policies in cost management. In order to keep overhead down, the institution does not explicitly categorize some of its costs as administrative or fundraising costs. This allows the organization to enjoy minimal taxes on contributions, therefore accessing greater capital. The institution also has limits on the cost deducted on a patient’s bill (Phoenix House, n.d).

            However, for-profit institutions such as Transformations have fixed capital. As a result, they tend to have constrained budgets. Transformations offer therapy, oriented towards the well-to-do classes. In consequence, it mostly attracts reimbursements from private insurance programs such as Cegna. However, they also attract a number of individuals, who can manage paying for ‘Private Pay’ reimbursements. Transformations have several measures in place, to minimize its operational expenses. For instance, it has developed creative strategies to reduce administrative costs. The Organization tends to cluster patients together, thus they need fewer attendants to keep watch. The center has also limited its scope of treatment to only segments that are profitable, yet essential to patients. The center has adopted information technology. It is now able to chart patient treatment better, therefore reducing lengths of stay (Walker & Carayon, 2009). Finally, it has enforced policies whereby patients are required to pay for treatment before admission. This mitigates the financial risks associated with losses (Oak Tree Delray, n.d).


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Internal revenue code. (2009). St. Paul, Minn: West Pub. Co.

Phoenix House (n.d.). Drug Rehab and Treatment in Florida. Retrieved May 29, 2013, from http:/www.phoenixhouse.org/locations/florida/

Oak Tree Delray (n.d.). Oak Tree Delray Sober Living halfway house for men and women in Delray Beach, Florida. Retrieved May 29, 2013, from http://oaktreedelray.com/outpatient-drug-treatment/

Walker, J.M. & Carayon, P. (2009). From tasks to processes: the case for changing health information technology to improve health care. Health Affairs, 28(2), 467-477Bottom of Form

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