Center for the Future of the Health Professions Nov. 2024 digest
Posted: November 12, 2024
The Center for the Future of the Health Professions is excited to present another monthly op-ed column for 2024, offering insightful perspectives on issues shaping the future of health professions. Established to provide policymakers at all levels and healthcare stakeholders with accurate and comprehensive data, our center aims to support effective planning for a sustainable future in healthcare. The United States healthcare system stands at a critical juncture, facing unprecedented challenges demanding a new breed of administrative leadership. As healthcare organizations grapple with decreasing reimbursement rates, staffing shortages, increased regulations, and rising patient expectations, the role of healthcare administrators has evolved dramatically from its early 20th century origins.
This month’s article traces the transformation of healthcare administration in America – from its roots in nursing and social work through the watershed moments of Medicare’s creation, the rise of managed care, and the Affordable Care Act – while examining how these historical shifts have shaped the competencies required of modern healthcare leaders. As we look toward a future marked by aging populations, technological innovation, and economic uncertainty, understanding this evolution becomes crucial for developing leaders capable of navigating the increasingly complex healthcare landscape.
Our guest author is Dr. Robert Clegg, chair of the Health Administration Department in the College of Graduate Health Studies at A.T. Still University. Most recently, Dr. Clegg was a professor/faculty lead for the health administration programs in the School of Health Sciences at Northcentral University in La Jolla, California. Before his academic career, Dr. Clegg worked in the not-for-profit healthcare sector for over 25 years, including as the chief quality and compliance officer at Copper Queen Community Hospital in Bisbee, Arizona. Dr. Clegg is also a proud veteran, serving as a Hospital Corpsman in the United States Navy for nearly 16 years.
Academically, Dr. Clegg earned both his bachelor of science in health science and a master of public health at Fresno State and a doctorate in human services with an emphasis in healthcare administration at Capella University in Minneapolis, Minnesota. He will also graduate with a master of law and business with an emphasis in healthcare law, compliance, and ethics from the National University in December 2024. Furthermore, he is a certified professional in healthcare quality (CPHQ) through the National Association of Healthcare Quality and a master certified health education specialist (MCHES) through the National Commission for Health Education Credentialing.
Philanthropically, Dr. Clegg proudly volunteers much of his time, talent, and treasure on the board of directors for the American Red Cross – Southern Arizona Chapter and serves on the Alumni and Volunteer Corporation, Inc., for Sigma Phi Epsilon Fraternity at Fresno State. On a personal side, Dr. Clegg enjoys exploring the country with his amazing wife in their travel trailer, riding his Harley-Davidson anytime, anywhere, and everywhere possible, playing softball, and trying to better his short game on the golf links.
Randy Danielsen, PhD, DHL(h), PA-C Emeritus, DFAAPA
Professor and Director
The Center for the Future of the Health Professions
A.T. Still University
Leading the way for a healthier America: The past, present, and future of health administration in the United States
With healthcare constantly changing, there is a growing need for healthcare leaders with the education, skills, and ability to adapt to the “new normal” of “doing more with less.” This often includes addressing the challenges of decreasing reimbursement rates, worker shortages, dwindling resources in exchange for more regulations, rising market competition, and increasing patient expectations. Couple this with advances in medical technology, new standards of care, changing patient demographics, and population growth, which require a new business model that includes cross-functional and cross-disciplinary learning and skill development. To keep up with the rapid pace the industry is changing, healthcare organizations need to become “learning organizations” at every level of the organization and in every aspect of the organization’s processes. This means establishing a culture of continuous learning that encourages each team member to perpetually transform and adapt to the shifting healthcare landscape.1
During the early 20th century, hospitals in the United States were predominantly non-profit and owned by either religious organizations or the government. At the time, hospital administrators often derived from nursing, social work, or public health backgrounds. Following the passage of Titles XVIII and XIX, which created Medicare and Medicaid in 1965, there was an influx of funds into the healthcare system to pay for care for elderly and poor Americans. The sudden and rapid growth of a more structured healthcare system led to the emergence of the hospital administration profession. Consequently, there was a need for formalized health administration programs to educate future healthcare leaders.2
In the 1980s, healthcare began to be viewed more as a business with the rise of managed care and the shift from cost-based reimbursement to a fixed prospective payment system, especially for Medicare and Medicaid. As a result, more business courses were offered in health administration programs. This led to the development of the master in hospital administration (which would later become the master of health administration, or MHA) and master of business administration (MBA) programs with concentrations in healthcare. These programs offered academic courses in physician practice management, quality, and managed care, as well as courses emphasizing quantitative skills. During this period, the nation saw a significant increase in physicians filling executive positions and the need for C-suite leaders in not-for-profit hospitals to possess for-profit experience.2
Fast forward to the Affordable Care Act (ACA), which was signed into law in 2010. Aside from making health insurance more affordable and accessible for all Americans through health reform, this era brought forth the transition from fee-for-service reimbursement to value-based purchasing, risk sharing (e.g., bundled pricing), and the movement toward a vertically integrated healthcare delivery system, such as Accountable Care Organizations (ACOs), Independent Physician Associations (IPAs), and Physician-Hospital Organizations (PHOs). It also required healthcare leaders to develop a new set of competencies. This included management skills for specific areas, such as hospitals, ambulatory settings, and physician practices, as well as working knowledge of risk management and quality. This era also saw the move toward preventive medicine, wellness, population health management, and managing chronically ill patients, requiring a new set of competencies in predictive analysis, change management, physician relations, and quality and patient safety. As a result, many healthcare organizations and educational institutions that train healthcare leaders adopted competency models from several different professional organizations, including the American College of Healthcare Executives (ACHE), American Medical Informatics Association (AMIA), Healthcare Financial Management Association (HFMA), Healthcare Information and Management Systems Society (HIMSS), Medical Group Management Association (MGMA), and National Center for Healthcare Leadership (NCHL)2.
Today, just as in the past, healthcare leaders must always put their patients at the organization’s center. This can only be accomplished by aligning the organization around a comprehensive business strategy including access to medically appropriate patient care, quality-driven outcomes, and financial stewardship.3 Proving medically appropriate quality care is vitally important for the success of any healthcare organization. Like most businesses, the financial success of a healthcare organization means bringing in more cash from the customer – which, in this case, is the patient – than what is paid for the services necessary to provide the needed services – that being, the care rendered to the patient. Furthermore, hospitals and physicians are compensated based on value-based purchasing and quality incentive payment programs, including Bridges to Excellence and CMS Quality Payment Programs, such as the Merit-based Incentive Payment System (MIPS), Advanced Alternative Payment Models (APMs), and Hospital Value-Based Purchasing (VBP) Program. These payment systems incentivize hospitals and providers based on population management and quality-driven patient care.2
When a business strategy is not working, healthcare leaders are responsible for identifying and explaining to their stakeholders – including the organization’s board of directors – any issues the organization is experiencing that might hinder its mission and the strategies to address these issues.4 In order to address the increasing challenges facing today’s healthcare environment, collaborative and distributive leadership styles have begun to emerge. Collective leadership is viewed by many as a fundamental approach to addressing complex, rapidly changing advances in medical technology and the growing number of specializations. It involves sharing knowledge and different viewpoints from multiple professionals to promote staff well-being and quality of patient care.5 Similarly, by leveraging shared responsibility and accountability, distributive leadership embraces a collective vision from multiple partners instead of relying on hierarchical and centralized structures of power often seen in traditional healthcare settings.4
The future of healthcare means that populations are living longer, and innovative technological applications are being implemented across the healthcare spectrum, all while uncertainty looms regarding the state of the U.S. economy. Due to the decrease in childhood mortality, safety and efficacy of medications, and increased focus on preventative care, life expectancy has increased dramatically over the past decade.6 Furthermore, artificial intelligence and machine learning (AI/ML) have dramatically changed how medicine is developed and how sick patients are diagnosed and treated.7 Lastly, increasing healthcare expenditures are expected to exceed economic growth in the United States, primarily due to high inflation, persistent clinical staff shortages, and lower economic growth.8 With such growth and uncertainty, the future of healthcare in the United States requires leaders who are well-educated and well-versed in the complexities of the healthcare industry. However, those with a global perspective, cross-industrial experience, and disruptive thinking can navigate the course of change.9
References
- Herd, AM; Adams-Pope, BL; Bowers, A; Sims, B. Finding what works: leadership competencies for the changing healthcare environment. Journal of Leadership Education. 2016; 15(4), 217-233.
- Love DB; Ayadi MF. Redefining the core competencies of future healthcare executives under healthcare reform. Administrative Issues Journal. 2015, 5(2), 3-16.
- Loria K. The future of healthcare leadership: how healthcare is changing – and the new skills you need to thrive. Managed Care Executive. 2019, 14-17.
- Wojtak A; Stuart N. Resetting the future of healthcare leadership. Healthcare Quarterly. 2021, 24(3), 1-3.
- Silve JAM; Mininel VA; Agreli HF; Peduzzi M; Harrison M; Xyrichis A. Collective leadership to improve professional practice, healthcare outcomes, and staff well-being. Cochrane Database of Systematic Reviews. 2022, 10, Article SD013850, 1-17.
- Altschuler GC. Why we are living longer [blog post]. Psychology Today. Published May 11, 2021. Accessibility verified October 16, 2024. https://www.psychologytoday.com/us/blog/is-america/202105/why-we-are-living-longer
- Marr B. The ten biggest trends revolutionizing healthcare in 2024. Forbes. Published October 3, 2023. Accessibility verified October 16, 2024. https://www.forbes.com/sites/bernardmarr/2023/10/03/the-10-biggest-trends-revolutionizing-healthcare-in-2024/
- Fleron A; Singhal S. The gathering storm: The uncertain future of U.S. healthcare. McKinsey & Company. Published September 16, 2022. Accessibility verified October 16, 2024. https://www.mckinsey.com/industries/healthcare/our-insights/the-gathering-storm-the-uncertain-future-of-us-healthcare
- Walcott D. Shaping the future: The rise of the disruptive healthcare leader. Forbes. Published March 12, 2024. Accessibility verified October 16, 2024. https://www.forbes.com/sites/davidwalcott/2024/03/12/shaping-the-future-the-rise-of-the-disruptive-healthcare-leader/