Introduction to Health Care Management
Sharon B. Buchbinder, RN, PhD Professor and Program Coordinator
MS in Healthcare Management Program School of Graduate and Professional Studies
Stevenson University Owings Mills, Maryland
Nancy H. Shanks, PhD Professor Emeritus
Department of Health Professions Health Care Management Program
Metropolitan State University of Denver Denver, Colorado
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Library of Congress Cataloging-in-Publication Data Names: Buchbinder, Sharon Bell, editor. | Shanks, Nancy H., editor. Title: Introduction to health care management / [edited by] Sharon B.
Buchbinder and Nancy H. Shanks. Description: Third edition. | Burlington, Massachusetts : Jones & Bartlett
Learning,  | Includes bibliographical references and index. Identifiers: LCCN 2015040132 | ISBN 9781284081015 (paper) Subjects: | MESH: Health Services Administration. | Efficiency, Organizational. | Health
Care Costs. | Leadership. Classification: LCC RA971 | NLM W 84.1 | DDC 362.1–dc23 LC record available at
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We dedicate this book to our loving husbands, Dale Buchbinder and Rick Shanks—
Who coached, collaborated, and coerced us to “FINISH THE THIRD EDITION!”
FOREWORD PREFACE ACKNOWLEDGMENTS ABOUT THE EDITORS CONTRIBUTORS
CHAPTER 1 An Overview of Health Care Management Jon M. Thompson, Sharon B. Buchbinder, and Nancy H. Shanks
Introduction The Need for Managers and Their Perspectives Management: Definition, Functions, and Competencies Management Positions: The Control in the Organizational
Heirarchy Focus of Management: Self, Unit/Team, and Organization Role of the Manager in Establishing and Maintaining
Organizational Culture Role of the Manager in Talent Management Role of the Manager in Ensuring High Performance Role of the Manager in Leadership Development and
Succession Planning Role of the Manager in Innovation and Change
Management Role of the Manager in Health Care Policy Research in Health Care Management Chapter Summary
CHAPTER 2 Leadership Louis Rubino
Leadership vs. Management
History of Leadership in the U.S. Contemporary Models Leadership Styles Leadership Competencies Leadership Protocols Governance Barriers and Challenges Ethical Responsibility Important New Initiatives Leaders Looking to the Future Special Research Issues Conclusion
CHAPTER 3 Management and Motivation Nancy H. Shanks and Amy Dore
Introduction Motivation—The Concept History of Motivation Theories of Motivation A Bit More About Incentives and Rewards Why Motivation Matters Motivated vs. Engaged—Are the Terms the Same? Measuring Engagement Misconceptions About Motivation and Employee
Satisfaction Motivational and Engagement Strategies Motivating Across Generations Managing Across Generations Research Opportunities in Management and Motivation Conclusion
CHAPTER 4 Organizational Behavior and Management Thinking Sheila K. McGinnis
Introduction The Field of Organizational Behavior Organizational Behavior’s Contribution to Management Key Topics in Organizational Behavior Organizational Behavior Issues in Health Organizations Thinking: The “Inner Game” of Organizational Behavior The Four Key Features of Thinking Mental Representation: The Infrastucture of Thinking Processing Information: Fundamental Thinking Habits Decision Making, Problem Solving, and Biased Thinking
Habits Social Cognition and Socio-Emotional Intelligence Research Opportunities in Organizational Behavior and
Management Thinking Conclusion
CHAPTER 5 Strategic Planning Susan Casciani
Introduction Purpose and Importance of Strategic Planning The Planning Process SWOT Analysis Strategy Identification and Selection Rollout and Implementation Outcomes Monitoring and Control Strategy Execution Strategic Planning and Execution: The Role of the Health
Care Manager Opportunities for Research in Strategic Planning Conclusion
CHAPTER 6 Healthcare Marketing Nancy K. Sayre
What Is Marketing? A Brief History of Marketing in Health Care The Strategic Marketing Process Understanding Marketing Management Health Care Buyer Behavior Marketing Mix Marketing Plan Ethics and Social Responsibility Opportunities for Research in Health Care Marketing Conclusion
CHAPTER 7 Quality Improvement Basics Eric S. Williams, Grant T. Savage, and Patricia A. Patrician
Introduction Defining Quality in Health Care Why Is Quality Important? The Relevance of Health Information Technology in
Quality Improvement Quality Improvement Comes (Back) to America Leaders of the Quality Movement Baldrige Award Criteria: A Strategic Framework for Quality
Improvement Common Elements of Quality Improvement Three Approaches to Quality Improvement Quality Improvement Tools Opportunities for Research in Health Care Quality Conclusion
CHAPTER 8 Information Technology Nancy H. Shanks and Sharon B. Buchbinder
Introduction Information Systems Used by Managers The Electronic Medical Record (EMR)
The Challenges to Clinical System Adoption The Future of Health Care Information Technology The Impact of Information Technology on the Health Care
Manager Opportunities for Research on Health Care Professionals Conclusion
CHAPTER 9 Financing Health Care and Health Insurance Nancy H. Shanks
Introduction Introduction to Health Insurance Brief History of Health Insurance Characteristics of Health Insurance Private Health Insurance Coverage The Evolution of Social Insurance Major “Players” in the Social Insurance Arena Statistics on Health Insurance Coverage and Costs Those Not Covered—The Uninsured Opportunities for Research on Emerging Issues Conclusion
CHAPTER 10 Managing Costs and Revenues Kevin D. Zeiler
Introduction What Is Financial Management and Why Is It Important? Tax Status of Health Care Organizations Financial Governance and Responsibility Structure Managing Reimbursements from Third-Party Payers Coding in Health Care Controlling Costs and Cost Accounting Setting Charges Managing Working Capital Managing Accounts Receivable
Managing Materials and Inventory Managing Budgets Opportunities for Research on Managing Costs and
CHAPTER 11 Managing Health Care Professionals Sharon B. Buchbinder and Dale Buchbinder
Introduction Physicians Registered Nurses Licensed Practical Nurses/Licensed Vocational Nurses Nursing Assistants and Orderlies Home Health Aides Midlevel Practitioners Allied Health Professionals Opportunities for Research on Health Care Professionals Conclusion
CHAPTER 12 The Strategic Management of Human Resources Jon M. Thompson
Introduction Environmental Forces Affecting Human Resources
Management Understanding Employees as Drivers of Organizational
Performance Key Functions of Human Resources Management Workforce Planning/Recruitment Employee Retention Research in Human Resources Management Conclusion
CHAPTER 13 Teamwork Sharon B. Buchbinder and Jon M. Thompson
Introduction What Is a Team? The Challenge of Teamwork in Health Care Organizations The Benefits of Effective Health Care Teams The Costs of Teamwork Electronic Tools and Remote and Virtual Teams Face to Face Versus Virtual Teams Real-World Problems and Teamwork Who’s on the Team? Emotions and Teamwork Team Communication Methods of Managing Teams of Health Care Professionals Opportunities for Research on Emerging Issues Conclusion
CHAPTER 14 Addressing Health Disparities: Cultural Proficiency Nancy K. Sayre
Introduction Changing U.S. Demographics and Patient Populations Addressing Health Disparities by Fostering Cultural
Competence in Health Care Organizations Best Practices Addressing Health Disparities by Enhancing Public Policy Opportunities for Research on Health Disparities and
Cultural Proficiency Conclusion
CHAPTER 15 Ethics and Law Kevin D. Zeiler
Introduction Legal Concepts Tort Law Malpractice
Contract Law Ethical Concepts Patient and Provider Rights and Responsibilities Legal/Ethical Concerns in Managed Care Biomedical Concerns Beginning- and End-of-Life Care Opportunities for Research in Health Care Ethics and Law Conclusion
CHAPTER 16 Fraud and Abuse Kevin D. Zeiler
Introduction What Is Fraud and Abuse? History The Social Security Act and the Criminal-Disclosure
Provision The Emergency Medical Treatment and Active Labor Act Antitrust Issues Physician Self-Referral/Anti-Kickback/Safe Harbor Laws Management Responsibility for Compliance and Internal
Controls Corporate Compliance Programs Opportunities for Research in Fraud and Abuse Conclusion
CHAPTER 17 Special Topics and Emerging Issues in Health Care Management Sharon B. Buchbinder and Nancy H. Shanks
Introduction Re-Emerging Outbreaks, Vaccine Preventable Diseases,
and Deaths Bioterrorism in Health Care Settings Human Trafficking Violence in Health Care Settings
Medical Tourism Consumer-Directed Health Care Opportunities for Research on Emerging Issues
CHAPTER 18 Health Care Management Case Studies and Guidelines Sharon B. Buchbinder, Donna M. Cox, and Susan Casciani
Introduction Case Study Analysis Case Study Write-Up Team Structure and Process for Completion
CASE STUDIES* Metro Renal—Case for Chapters 12 and 2 United Physician Group—Case for Chapters 5, 9, 11, and 15 Piecework—Case for Chapters 9 and 10 Building a Better MIS-Trap—Case for Chapter 8 Death by Measles—Case for Chapters 17, 11, and 15 Full Moon or Bad Planning?—Case for Chapters 17, 11, and
15 How Do We Handle a Girl Like Maria?—Case for Chapters
17 and 4 The Condescending Dental Hygienist—Case for Chapters
7, 12, 15, and 4 The “Easy” Software Upgrade at Delmar Ortho—Case for
Chapters 8 and 13 The Brawler—Case for Chapters 11, 12, and 17 I Love You…Forever—Case for Chapters 17, 12, and 11 Managing Health Care Professionals—Mini-Case Studies
for Chapter 11 Problems with the Pre-Admission Call Center—Case for
Chapters 13 and 10 Such a Nice Young Man—Case for Chapters 17, 11, and 12 Sundowner or Victim?—Case for Chapters 15 and 17 Last Chance Hospital—Case for Chapters 5 and 6
The Magic Is Gone—Case for Chapters 3, 12, and 13 Set Up for Failure?—Case for Chapter 3 Sustaining an Academic Food Science and Nutrition Center
Through Management Improvement—Case for Chapters 2 and 12
Giving Feedback—Empathy or Attributions?—Case for Chapter 4
Socio-Emotional Intelligence Exercise: Understanding and Anticipating Major Change—Case for Chapter 4
Madison Community Hospital Addresses Infection Prevention—Case for Chapters 7 and 13
Trouble with the Pharmacy—Case for Chapter 7 Emotional Intelligence in Labor and Delivery—Case for
Chapters 2, 12, and 13 Communication of Patient Information During Transitions
in Care—Case for Chapters 7 and 12 Multidrug-Resistant Organism (MDRO) in a Transitional
Care Unit—Case for Chapters 7 and 12 Are We Culturally Aware or Not?—Case for Chapters 14
and 5 Patients “Like” Social Media—Case for Chapters 6 and 5 Where Do You Live? Health Disparities Across the United
States—Case for Chapter 14 My Parents Are Turning 65 and Need Help Signing Up for
Medicare—Case for Chapter 9 Newby Health Systems Needs Health Insurance—Case for
Chapter 9 To Partner or Not to Partner with a Retail Company—Case
for Chapters 17, 5, and 6 Wellness Tourism: An Option for Your Organization?—
Case for Chapters 17 and 5 Conflict in the Capital Budgeting Process at University
Medical Center: Let’s All Just Get Along—Case for Chapter 10
The New Toy at City Medical Center—Case for Chapters
11 and 13 Recruitment Challenge for the Middle Manager—Case for
Chapters 2 and 12 I Want to Be a Medical Coder—Case for Chapter 10 Managing Costs and Revenues at Feel Better Pharmacy—
Case for Chapter 10 Who You Gonna Call?—Case for Chapter 16 You Will Do What You Are Told—Case for Chapter 15
In the U.S., health care is the largest industry and the second-largest employer, with more than 11 million jobs. This continuous growth trend is a result of many consequences, including: the large, aging Baby Boomer population, whose members are remaining active later in life, contributing to an increase in the demand for medical services; the rapidly changing financial structure and increasingly complex regulatory environment of health care; the integration of health care delivery systems, restructuring of work, and an increased focus on preventive care; and the ubiquitous technological innovations, requiring unceasing educational training and monitoring.
Given this tremendous growth and the aforementioned causes of it, it is not surprising that among the fastest-growing disciplines, according to federal statistics, is health care management, which is projected to grow 23% in the next decade. Supporting this growth are the increasing numbers of undergraduate programs in health care management, health services administration, and health planning and policy—with over 300 programs in operation nationwide today.
The health care manager’s job description is constantly evolving to adapt to this hyper-turbulent environment. Health care managers will be called on to improve efficiency in health care facilities and the quality of the care provided; to manage, direct, and coordinate health services in a variety of settings, from long-term care facilities and hospitals to medical group practices; and to minimize costs and maximize efficiencies, while also ensuring that the services provided are the best possible.
As the person in charge of a health care facility, a health care administrator’s duties can be varied and complex. Handling such responsibilities requires a mix of business administration skills and knowledge of health services, as well as the federal and state laws and regulations that govern the industry.
Written by leading scholars in the field, this compendium provides future and current health care managers with the foundational knowledge needed to succeed. Drs. Buchbinder and Shanks, with their many years of clinical, practitioner, administration, and academic experience, have assembled experts in all aspects of health care management to share their knowledge and experiences. These unique viewpoints, shared in both the content and case studies accompanying each chapter, provide valuable insight into the health care industry and delve into the
core competencies required of today’s health care managers: leadership, critical thinking, strategic planning, finance and accounting, managing human resources and professionals, ethical and legal concerns, and information and technology management. Contributing authors include clinicians, administrators, professors, and students, allowing for a variety of perspectives.
Faculty will also benefit from the depth and breadth of content coverage spanning all classes in an undergraduate health care management curriculum. Its most appropriate utility may be found in introductory management courses; however, the vast array of cases would bring value to courses in health care ethics, managerial finance, quality management, and organizational behavior.
This text will serve as a cornerstone document for students in health management educational programs and provide them with the insight necessary to be effective health care managers. Students will find this textbook an indispensable resource to utilize both during their academic programs, as well as when they enter the field of health care management. It is already on its way to becoming one of the “classics” in the field!
Dawn Oetjen, PhD Associate Dean, Administration and Faculty Affairs
College of Health and Public Affairs University of Central Florida
The third edition of Introduction to Health Care Management is driven by our continuing desire to have an excellent textbook that meets the needs of the health care management field, health care management educators, and students enrolled in health care management programs around the world. The inspiration for the first edition of this book came over a good cup of coffee and a deep-seated unhappiness with the texts available in 2004. This edition builds on the strengths of the first two editions and is based on an ongoing conversation with end users— instructors and students—from all types of higher education institutions and all types of delivery modalities. Whether your institution is a traditional “bricks and mortar” school or a fully online one, this book and its ancillary materials are formatted for your ease of use and adoption.
For this edition, many of the same master teachers and researchers with expertise in each topic revised and updated their chapters. Several new contributors stepped forward and wrote completely new cases for this text because we listened to you, our readers and users. With a track record of more than eight years in the field, we learned exactly what did or did not work in the classrooms and online, so we further enhanced and refined our student- and professor- friendly textbook. We are grateful to all our authors for their insightful, well- written chapters and our abundant, realistic case studies.
As before, this textbook will be useful to a wide variety of students and programs. Undergraduate students in health care management, nursing, public health, nutrition, athletic training, and allied health programs will find the writing to be engaging. In addition, students in graduate programs in discipline-specific areas, such as business administration, nursing, pharmacy, occupational therapy, public administration, and public health, will find the materials both theory-based and readily applicable to real-world settings. With four decades of experience in higher education, we know first and foremost that teaching and learning are not solo sports, but a team effort—a contact sport. There must be a give-and-take between the students and the instructors for deep learning to take place. This text uses active learning methods to achieve this goal. Along with lively writing and content critical for a foundation in health care management, this third edition continues to provide realistic information that can be applied immediately to the real world of health care management. In addition to revised and updated chapters
from the second edition, there are learning objectives, discussion questions, and case studies included for each chapter, with additional instructors’ resources online and Instructor’s Guides for all of the case studies. PowerPoint slides, Test Bank items, and research sources are also included for each chapter, as well as a glossary. A sample syllabus is also provided. Specifically, the third edition contains:
Significantly revised chapters on organizational behavior and management thinking, quality improvement, and information technology.
Revisions and updates to all chapters, including current data and recent additions to the literature.
A new emphasis on research that is ongoing in each of the areas of health care.
A new chapter on a diverse group of emerging issues in health care management including: re-emerging outbreaks, vaccine-preventable diseases, and deaths; bioterrorism in health care settings; human trafficking; violence in health care settings; medical tourism; and consumer-directed health care.
Forty cases in the last chapter, 26 of which are new or totally revised for this edition. They cover a wide variety of settings and an assortment of health care management topics. At the end of each chapter, at least one specific case study is identified and linked to the content of that chapter. Many chapters have multiple cases.
Guides for all 40 cases provided with online materials. These will be beneficial to instructors as they evaluate student performance and will enable professors at every level of experience to hit the ground running on that first day of classes.
Totally revised test banks for each chapter, providing larger pools of questions and addressing our concerns that answers to the previous test banks could be purchased online.
Never underestimate the power of a good cup of joe. We hope you enjoy this book as much as we enjoyed revising it. May your classroom and online discussions be filled with active learning experiences, may your teaching be filled with good humor and fun, and may your coffee cup always be full.
Sharon B. Buchbinder, RN, PhD Stevenson University
Nancy H. Shanks, PhD
Metropolitan State University of Denver
This third edition is the result of what has now been a 10-year process involving many of the leaders in excellence in undergraduate health care management education. We continue to be deeply grateful to the Association of University Programs in Health Administration (AUPHA) faculty, members, and staff for all the support, both in time and expertise, in developing the proposal for this textbook and for providing us with excellent feedback for each edition.
More than 20 authors have made this contributed text a one-of-a-kind book. Not only are our authors expert teachers and practitioners in their disciplines and research niches, they are also practiced teachers and mentors. As we read each chapter and case study, we could hear the voices of each author. It has been a privilege and honor to work with each and every one of them: Mohamad Ali, Dale Buchbinder, Susan Casciani, Donna Cox, Amy Dore, Brenda Freshman, Callie Heyne, Ritamarie Little, Sheila McGinnis, Mike Moran, Patricia Patrician, Lou Rubino, Sharon Saracino, Grant Savage, Nancy Sayre, Windsor Sherrill, Jon Thompson, Eric Williams, and Kevin Zeiler.
And, finally, and never too often, we thank our husbands, Dale Buchbinder and Rick Shanks, who listened to long telephone conversations about the book’s revisions, trailed us to meetings and dinners, and served us wine with our whines. We love you and could not have done this without you.
About the Editors
Sharon B. Buchbinder, RN, PhD, is currently Professor and Program Coordinator of the MS in Healthcare Management Program at Stevenson University in Owings Mills, Maryland. Prior to this, she was Professor and Chair of the Department of Health Science at Towson University and President of the American Hospital Management Group Corporation, MASA Healthcare Co., a health care management education and health care delivery organization based in Owings Mills, Maryland. For more than four decades, Dr. Buchbinder has worked in many aspects of health care as a clinician, researcher, association executive, and academic. With a PhD in public health from the University of Illinois School of Public Health, she brings this blend of real-world experience and theoretical constructs to undergraduate and graduate face-to-face and online classrooms, where she is constantly reminded of how important good teaching really is. She is past chair of the Board of the Association of University Programs in Health Administration (AUPHA) and coauthor of the Bugbee Falk Award–winning Career Opportunities in Health Care Management: Perspectives from the Field. Dr. Buchbinder also coauthors Cases in Health Care Management with Nancy Shanks and Dale Buchbinder.
Nancy H. Shanks, PhD, has extensive experience in the health care field. For 12 years, she worked as a health services researcher and health policy analyst and later served as the executive director of a grant-making, fund-raising foundation that was associated with a large multihospital system in Denver. During the last 20 years, Dr. Shanks has been a health care administration educator at Metropolitan State University of Denver, where she has taught a variety of undergraduate courses in health services management, organization, research, human resources management, strategic management, and law. She is currently an Emeritus Professor of Health Care Management and an affiliate faculty member, after having served as Chair of the Department of Health Professions for seven years. Dr. Shanks’s research interests have focused on health policy issues, such as providing access to health care for the uninsured.