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Department: Editorial

Value Added of Management to Health Care Organizations

Issel, Michele L. PhD, RN

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Health Care Management Review: 4/6 2020 - Volume 45 - Issue 2 - p 95
doi: 10.1097/HMR.0000000000000280
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A current ideology in health care underscores providing value-based health care. The concept of value-based service has been applied primarily to development of reimbursement models for health care delivery. In contrast, the concept of value-added, although having both marketing and intuitive appeal, has received less explicit attention or application in health care. Questions of the value added by administrative costs has been addressed in health services research by looking at the cost of coding and billing services. Similarly, the value added by health information technologies has focused on benefits to patients or providers against cost of implementation and adoption.

Going beyond these specific and bounded examples, we could ask more broadly, what is the value added of managers and administrators in health care organizations? We have partial answers to this question. For example, evidence supports the key role of managers play in maintaining employee satisfaction and minimizing turnover. But, that economic benefit is rarely framed as value added of the managers. Similarly, the role of managers and administrators in supporting quality improvement also has been shown to benefit the organizations, with the value being attributed to the quality improvements rather than the administrative support. Likewise, magnet status certification for hospitals and clinics has benefits for the organization, with implicit attributions of value to the administrative support. Many of us ideologically believe that managers, leaders and administrators add value to the health care enterprise, often based more on anecdotal evidence than longitudinal, rigorous research. This leads one to ask, what does the science of health care management, leadership and administration tell us about the value added by their actions and decisions?

The question of the value added by health care management and administration surfaced when I heard someone argue that there are too many managers in health care organizations, and that was adding to the administrative cost of care. But, administrative costs include billing departments and insurance related costs, making complaints about administrative costs in health care biased. Such arguments do not take into account other elements that comprise the value added by management, leadership, and administration. Granted, the number and diversity of departments in a mid-sized hospital or large outpatient clinics, for example, can quickly start to boggle the mind. Each department has a manager with a specified span of control and has its specific billing and insurance related concerns, in addition to professional licensure and regulatory concerns. Providing leadership, management and executive functions in this complex work and task environment requires more than technical skills. Surely, their work is value added to the organization.

Health Care Management Review, with a mission to focus on managing, leading and administrating health care organizations, welcomes research and theory development which specifically seeks to substantiate the value added of managers, leaders and administrators to the health care organization. Such research and theory development ought to refine our understanding of what is required to achieve varying levels of value added, and what needs to be avoided to avert a value deficit. The time has come to piece together a cogent argument for the value added of health care managers, leaders, and administrators.

Michele L. Issel, PhD, RN
Editor-in-Chief

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