Primary research
Health management education in Europe and in the United States: A comparative review and analysis
Health Services Management Research 26(2–3) 76–85 ! The Author(s) 2013 Reprints and permissions: sagepub.co.uk/journalsPermissions.nav DOI: 10.1177/0951484813512288 hsm.sagepub.com
Thomas P Weil1
Abstract In Europe and in the United States, health management education and the role of health managers are patterned and consistent with how the country’s healthcare system is organized, managed, and financed. In the United States, the feefor-service, entrepreneurial dominated approach, resulting in health being one of the few remaining growth industries, has created a huge demand for additional health management education programs and managers. Therefore, universities finding themselves in an economic slump are attracted to establish health services administration programs (a North American term) since they require limited capital, continue to attract enrollment, and contribute to the ‘‘social good.’’ In contrast, the European countries’ healthcare systems provide universal access to care and strict, governmental fiscal control on healthcare expenditures. As a result, the American masters-level health manager model has not thrived there—although not willingly conceded is the fact that in Europe physicians continue to dominate the management ranks. After outlining a number of the current problems facing US health management education, this article focuses on: (1) a projected shuttering of the weaker American health management programs and the market for health managers being overly saturated (such as for lawyers now), because the US gross domestic product expenditures for health will decrease over the next two decades from the current level of 17.6% to be somewhat comparable to the 11.5% in Canada, France, and Germany; and (2) a projected increase in the enrollment among European health management programs for several reasons: (a) a huge spike in the demand for additional clinically oriented, health managers who can trade off concerns of cost versus quality; and (b) the constraints of most countries’ statutory health insurance plans will become increasingly more evident so that privatization of healthcare services will become an option for those with above average incomes and, thereby, generate a demand for newly minted health managers similar to the US masters-level graduate.
Keywords European programs in health services administration, health management education, health services administration
Health management: A profession? The American College of Healthcare Executives (ACHE), with its over 45,000 members, subscribes to the belief that the ‘‘fundamental objectives of the healthcare management profession are to maintain or enhance the overall quality of life. . .’’1 By participating in ACHE seminars, and by passing examinations and interviews, a US health manager can reach the level of fellowship in 8 years, which the college contends is equivalent to passing specialty board certification in a medical discipline. Many of us do not believe this proposition for a number of reasons. The evidence worldwide is that health management is not as mature a profession as medicine, law, and nursing, nor do health management programs generally
have much independent academic autonomy within their universities. Unfortunately, graduate health management programs to date, with rare exceptions, simply have not attracted students qualified for admission to medical schools nor to top law schools, although applicants visualize the field as a path ‘‘to move up the professional ladder,’’ combining a stimulating executive role with the possibility of doing ‘‘some good.’’ What may also be appealing is that health management might be briefly described as an amalgamation of some 1
Asheville, NC, USA
Corresponding author: Thomas P Weil, 1400 Town Mt. Road, Asheville, NC 28804, USA. Email: [email protected]
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business school principles and techniques tailored to the health field and an overview of the historical, social (including public health), political, and economic aspects of the delivery of healthcare services. It is within these above underlying parameters related to health management education and being a health manager that this paper has been prepared.
Purposes of this paper The purposes of this paper are fourfold: (a) to summarize the major studies in health management education in the United States and among the European nations and to illustrate how the specific country’s healthcare system is organized, managed, and financed has a huge impact on how that nation’s health management education is designed and how health managers function there; (b) to outline what appear in the United States to be the major issues in health management education; (c) to speculate on the possible impact on health management manpower needs and on the health management programs, if the United States over say two decades reduced its gross domestic product (GDP) expenditure for health from currently 17.6% to between 11.4 and 11.6%, thereby being comparable to Canada, France, and Germany; and (d) to speculate under what circumstances the role of the European health management programs and health managers will be enhanced.
Early studies of health management education in the United States When the US Congress in 1965 enacted Medicare and Medicaid legislation, there were 33 health services administration (HSA) programs (all were or were in the process of being accredited) and the GDP expenditure for health was 6.1%. Almost a half century later (2013), there are over 300 health management programs, with only 73 of them are accredited, over 3000 masters in health administration (MHA) graduates/ annum, and the GDP expenditure for health here has swelled to 17.6%. A somewhat slower growth in the number of health management programs has been the pattern worldwide.2 For over the last half century, the highly entrepreneurial, competitive, multipayer, and fee-for-serviceoriented US healthcare system has been the backdrop of at least three major studies of health management education. With a grant in 1945 from the W.K. Kellogg Foundation, a Joint Commission on Education was established that then sponsored the Prall Report,3 whose recommendations strongly favored the field’s service commitment and the schools of public health rather than the more fiscal-oriented concepts associated with the graduate schools of business. This study was
followed less than a decade later with the Olsen Report4 recommending just the reverse—that health management programs should be located in business schools. These early disagreements of the appropriate core curriculum seem today to be rather erroneous in the context that by the middle 1960s, there were American and Canadian health management programs already granting both a MBA and a MPH jointly. Today, many programs offer double degrees with law, medicine, public administration, and other disciplines. Over one-third of the 141 US medical schools have a joint MD/MBA program over a 5-year period, the MBA portion often taken as electives in the medical school curriculum.
Practitioner leadership complains about programs Just over a decade ago in the United States, major criticism was laid on the health management programs by some of the field’s most prominent practitioners for their faculties not providing the appropriate curriculum and leadership training thought to be needed by their graduates. Where there was possibly some agreement between the practitioners and these health management faculties was that insufficient attention was being given to practical learning as an integral part of the 2-year academic program. The statement that gained these faculties’ attention, even among the ‘‘quality programs,’’ was the CEOs’ suggestion that there was a lack of clear, documented advantage of hiring a master’s degree graduate from an accredited health management program compared to a ‘‘straight’’ MBA. This eventually led to the formation of the National Center for Healthcare Leadership (NCHL) and its many reports and studies.5 Eventually, there was agreement with ‘‘competency identification and modeling in health leadership’’ as outlined by Griffith et al.6 and Calhoun et al.,7 an approach that at first was highly controversial, but now has been incorporated as part of the 2011 Commission on Accreditation of Healthcare Management Education (CAHME) accrediting standards.
UK health management education Compared to the US scene, UK graduate health management education has not received the same intensity of inquiry. Conversely, there have been frequent inquiries of the National Health Service (NHS) Nation Management Training Scheme being so well documented by Saunders8,9 both chronologically and by theme. These NHS-oriented reports are consistent with Ovretveit’s10 comments early on that the ‘‘European countries could significantly increase the
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productivity of their healthcare services by reducing costs through national programs of health management development for physician managers, hospital directors, and middle-level managers.’’ The perceived impact of the graduate health management programs in the United Kingdom (that attracts mostly those in mid-career), in an environment where for all practical purposes there is one major employer (i.e. NHS), is significantly different than the HSA programs in the United States. This might be illustrated by the fact that these masters level educational endeavors or their graduates received only a few comments in the recent (2013) Francis Report; the Health and Social Bill 2011 (recommended a management staff reduction of 25,000 positions); the King’s Fund ‘‘Commission on Leadership and Management in the NHS’’; the ‘‘Talent Management in the NHS Managerial Work Force’’; and other similar reports. References were far more prevalent for the need for management training for physicians and nurses and their playing a significant role in enhancing the NHS’s future leadership and management – a theme to be discussed in some detail later in this paper.
Health management programs in East Europe In contrast, a significant number of published studies and reports on health management education are available from several eastern European countries: the Czech Republic,11 Georgia,12 Russia,13 the Slovak Republic,14 and Turkey and Greece.15 As expected, health management in Eastern Europe, like elsewhere in the world, is patterned and consistent with how the country’s healthcare system is organized, managed, and financed. The old Soviet bloc, government-owned and operated acute care hospitals were managed by poorly paid physicians who received minimum training in administration while attending medical school, while formally trained health managers were virtually nonexistent. A few short courses for physicians were offered, but any semblance of a meaningful role for non-MD administrators never seemed to evolve, in spite of the fact there was a continuing need in these countries that for all practical purposes provide universal access for healthcare, to find ways to shrink the system. Since the breakup of the Soviet bloc into the Commonwealth of Independent States, some eastern European countries have experienced partial privatization of their healthcare systems and thereby have generated the usual societal concerns of creating two levels of patient services. In Georgia, for example, with the privatization of part of its healthcare system, there has been a far greater interest in the training of masters
level health managers as well as the health management programs offering short courses to all those currently employed in the field. Possibly unique to Georgia is that their private health industry has been resistant to providing student field experiences and administrative residencies without fiscal remuneration. In Turkey, a non-Soviet bloc country, historically there has been considerably more interest in health management education than elsewhere in Eastern Europe, as evidenced by the fact that in 2009 there were 17 masters and five doctoral HSA programs in a country that has a population of 73.7 million persons. The curriculum there, as well as in the neighboring Greece, is quite comparable with health management programs in the United States, except that both of them provide significantly more ‘‘practical learning.’’ Approximately 70% of those completing the Athensbased HSA program find employment upon graduation as an assistant manager. In Turkey the situation is quite similar to other Eastern European nations as health management graduates have far more difficulty in obtaining employment, since almost all hospitals are government owned and managed, and those with a masters degree in health management are generally not overly welcome. When a Turkish MHA graduate has a prior position within the government system, a promotion is usually forthcoming, although this often depends on his/her political connections. The party in power appoints its ‘‘partisans’’ to the senior hospital administrative positions. Other graduates often are forced to seek employment within the private sector, sometimes not even in the healthcare field.
Major issues facing US health management programs There are a significant number of issues facing health management programs in the United States, that undoubtedly exist frequently in Europe too, and are well documented in Loebs’ 2011 report for the NCHL.16 Some of our concerns here are summarized as follows: 1. Student enrollment. Top-ranked health management programs in the United States (e.g. the Universities of Michigan, Minnesota, North Carolina-Chapel Hill, Pennsylvania (Wharton)) have four times as many applicants as they accept for their 2-year, full-time masters program, attracting those averaging 25 years of age. The health management programs ranked at the bottom accept virtually everyone who can pay their tuition and other related costs. There are numerous executive HSA programs available, some of them now strictly online, that attract mostly mid-career health professionals, who
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are either interested in enhancing their knowledge to perform with greater effectiveness in their present position or, more frequently, are interested in a promotion or modifying their future career pattern. The American College of Physician Executives’ Masters of Medical Management program tied to four universities is one example catering to mid-career physicians interested in executive-type positions, having since 1998 conferred masters degrees on 415 graduates and currently having over 2000 physicians in its pipeline. 2. Faculty. Only 10% of the full-time faculty in the topranked health management programs in the United States have a masters or doctoral degree in health management, HSA, or health services research.17 While law and medical students (in their clinical years) are instructed primarily by lawyers and physicians, health management students here are taught by doctoral graduates from the social and quantitative sciences. And this is unlikely to change, since the majority of the current doctoral students in health services research indicate little interest in teaching positions—they aspire to be healthcare researchers emulating the preferred footsteps of their thesis advisers. What is so noteworthy is the significant shift in the last 50 years from small (12 students) ‘‘nuts and bolts’’ programs frequently taught by then-current or former practitioners to some program enrollments exceeding 100 students over the 2-year curriculum, tutored by faculty who for the most part are without any direct academic or hands-on experience in the health field. 3. Curriculum. When the program faculties were dominated in the United States by former or current practitioners, there was limited concern expressed by hospital and other healthcare executives when hiring these graduates, the young health management neophytes having received sufficient hands-on type knowledge and experience. Faced with the reality that the marketplace for MHA–PhDs in health services research (popular in the 1960s and 1970s) had virtually dwindled, the NCHL leadership decided to develop some prescribed ‘‘competencies’’ to provide guidelines to what the health management faculties should teach in order to receive CAHME accreditation. Forgetting about the merit of this proposal, the fact that the health management programs at the University of Pennsylvania, University of California-Berkeley, and Yale University indicated that they would no longer seek accreditation could be considered suggestive of some possible concerns with the accreditation process. 4. How much of a practice orientation do health management graduates really need? The traditional chasm between those who teach and those who
practice is somewhat inherent in their differing roles, but has greatly widened from the time the program faculties were dominated primarily by practitioners compared to the current environment where almost all the full-time teaching staff are PhD social and quantitative scientists. In an earlier paper,18 some recommendations were made to overcome these concerns: during the summer externship shadowing senior executives rather than working on projects with department heads; more frequently including field, community-oriented and internal management studies as part of the second-year curriculum; retired senior executives teaching case studies after a 3-month ‘‘boot camp’’ to be appropriately oriented for such a role; and all HSA students to have a preceptor or mentor with whom they can dialogue frequently through the 2-year program. Most faculties will find implementing these recommendations difficult.
Potential reductions in US health expenditures The projected future enrollment in health management education programs and the need for additional, welltrained health managers in the United States will be dependent on whether the percentage of the GDP for health will continue to increase, remain at status quo, or decrease. In rough terms, the United States has a 50:50 private–public healthcare system that might be most simply described as where most healthcare providers are paid on a fee-for-service basis encouraging physicians, hospitals, and others to increase the volumes of services to enhance their total revenues. This reimbursement methodology does not appear to be sustainable in the long haul when almost a fifth of our GDP are being consumed by health services. This is a serious issue as the US entitlement programs need to be contained as local, state, and federal indebtedness is becoming a major fiscal and political issue. If the United States is to reduce its health expenditure from 17.6% to approximately 12.0% of GDP expenditure for health, the field’s leadership is faced with a number of options, a few key ones are enumerated below that could potentially have a significant impact on decreasing the demand for health managers: 1. Change the processing of health insurance claims. A study19 comparing administrative costs in Canada and the United States that not only included the insurers’ costs, but also the expenses incurred by employers, providers, and governmental agencies when arranging third-party coverage, concluded
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that the Americans spent $1059 per capita on health insurance administration compared to $307 in Canada. In the Canadian province of Ontario, physician practices spent $22,205 per doctor/annum for third-party transactional costs compared to $82,975 per doctor/annum in the United States, a potential saving here of approximately $276 billion per year.20 The solution is relatively simple—issue smart cards with pertinent personal and medical information to every American and thereby, eliminate 2.5–3.0 million white-collar positions in physicians’ offices, hospitals, insurance companies, and elsewhere in the US health field. Most health managers working in the health insurance industry and in its related activities would be terminated. 2. Halt further mergers, hospital–physician integration, and electronic medical records (EMR) development—probably it is not doable nor will it be totally effective. Studies of the overall efficacy of hospital mergers in the United States, Canada, and the United Kingdom have concluded that these consolidations culminate in the formation of large systems—monopolists that result in decreasing accessibility to healthcare services, increasing medical costs, and lowering the quality of care.21,22 Once an American hospital acquires a physician’s practice, a claim’s filing to Medicare and therefore, to most other insurers, is 30% higher than as a standalone doctor’s office simply because the service is now provided by an acute care facility. EMRs were suppose to decrease costs by reducing unnecessary duplication of tests and procedures; but, in addition to the initial capital cost to install the EMR system, this approach has been found to be more expensive since physicians can order additional procedures so easily with a single click. In the United States, thousands of health management graduates are employed in securing and implementing mergers and consolidations; in the acquisition and the operation of physician practices; and, in the implementation of EMRs. Thousands of health management positions would be terminated, if the expansion of existing integrated healthcare systems was slowed to a snail’s pace. 3. Implement a pharmaceutical cost review board in the United States. Enormous political opposition would be mounted by the pharmaceutical industry, if the US Congress attempted to enact legislation similar to the Canadian Patient Medicine Review Board; the French drug pricing decisions that are made jointly by its Ministry of Social Affairs and the Ministry of Economy; or, the UK’s Pharmaceutical Price Regulation Scheme.23 When compared to the other cost-saving options outlined
herein, only a relatively few health managers are currently employed in the pharmaceutical industry. 4. Shutter underutilized health facilities and services. Since healthcare services have high-fixed and lowvariable costs, significant fiscal savings could be potentially achieved by shuttering all the underutilized hospitals, ambulatory care facilities, outpatient surgery centers, and many physician-owned offices where specialized procedures such as MRIs and CT scans are provided. One example is where a not-for-profit or small public hospital experiencing fiscal distress, most often because of low occupancy or an adverse third-party patient mix, rather than being shuttered is now frequently being privatized; thereby, assuring existing accessibility for care to its local residents and maintaining existing jobs.24 No one wants an empty hospital building in the center of their community. Significant savings could be generated by phasing out all the ‘‘marginal’’ (particularly in terms of utilization) health facilities and services; such a downsizing of the healthcare market would eliminate a significant number of health management positions. These above cost reduction options are all politically tacky undertakings since they involve limiting access to care and often result in the loss of local jobs.
US enrollment in health management programs in the short term Continued high enrollment in the United States 2-year, full-time health management programs is dependent on whether enough individuals in their 20 s continue to visualize healthcare as a growth industry; and, for the online executive programs for an MBA in health management, whether those in mid-career healthcare positions still sense the need for additional training to maintain their existing job, desire to pursue opportunities closer to the top, or, aspire to have an additional credential to be better positioned to potentially modify their careers. With the implementation of Obamacare, and all its new rules and regulations (but without providing universal access nor with significant cost controls), there will be an increasing demand for health management personnel to implement these legislative measures (e.g. the new health insurance exchanges). More health management positions at the entry level should be in the offing in the United States for at least several more years. In fact, one should anticipate that a few additional health management programs will be established in the United States, particularly those that facilitate learning online, an approach that continues to gain more
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popularity particularly among those in mid-career seeking a promotion. Some here might suggest this to be an overly optimistic prediction, since if you scan the current alumni directories of established health management programs, one-quarter or more (after say 10 years after graduation) are no longer working in the health field most often explained by a mismatch of the individual’s personality to some perceived constraints of working in healthcare, better opportunities in another industry, or simply the loss of interest of being employed in the health field. In the short term, the top-ranked health management programs should continue to receive the same number of qualified applicants; the weaker programs may experience a slight downturn in candidates primarily because more potential applicants completing their undergraduate degrees are already strapped with significant debt and are concerned about its repayment in an environment where finding a good paying job is sometimes difficult to achieve. These observations should be considered in the context that the total cost of attending a 2-year residential program in health management at one of the top-ranked US universities is in excess of $100,000.
Long-range projection of enrollment in US health management programs In the long run, with a projected decrease in the percentage of GDP for health, one might speculate that what is occurring among law schools as they have experienced a significant drop in applications for admission might happen in the future to health management programs. In 2004, there were 100,000 applicants to American law schools; in 2013, this is likely to drop to 54,000 potential students.23 Such startling decreases have forced law school deans into a soulsearching mode on the future of legal education and where the profession is going overall. This significant change in number of law school candidates might be related to a number of factors: (a) a declining job market, (b) existing student loans, (c) most law schools are perceived to be too expensive, and (d) some even say the drop in applicants is an indictment of the legal training itself—a failure to keep up with the profession’s or consumer needs. Until recently, if you were looking to step on the escalator to upward economic and social mobility you went to law school, studied for an MBA at a top graduate school of business, or you matriculated at a health management program—one of them already appears to have fallen by the wayside. What would really modify the number of applicants and obviously the fiscal well-being of many health
management programs is a major shift in how amply the US healthcare system is financed. The current political scene here suggests increasing pressures from both the left and right to avoid any additional federal, state, and local indebtedness. It would be far easier to balance our ledgers if the GDP expenditure for health was not increasing twice (until recently) the rate of inflation. Before Obamacare, we had over 40 million Americans without health insurance. It would be political suicide for anyone in public office to propose universal access and some form of setting a dollar ceiling on healthcare expenditures such as with global budgets. But US policy makers now need to be thinking about such a proposal, and how it will effect health management education and the need for health managers.
Impact of implementing global budgets in the United States To set a ceiling on their total health expenditures, Canada and most European countries for decades have used global budgets as an approach whereby individual providers receive a ‘‘budget for their own costs’’; or, the country uses a second scenario ‘‘to work with global budgets for health care providers servicing a total population.’’26 Conservatives in the United States, in particular, have seriously resisted this approach citing it rations needed health services, forgetting that we already limit healthcare services (e.g. elective surgery, dental care, mental health services) by family income and by the availability of health insurance coverage. The impact that a global budget type methodology might have in restraining healthcare expenditures in the United States is rather sizable as evidenced by these studies: (1) the per capita expenditure in 1985 for physicians’ services in Canada was $202 compared to $347 in the United States (a ratio of 1.72) explained entirely by higher fees (particularly for procedures), yet the number of total physician services provided per capita being lower in the United States;27 (2) the total number of paid hours per discharge for administrative and fiscal services in US teaching hospitals in 1989 was 34.23 h compared with 18.46 h in a similar type of facility in Canada (a ratio of 1.58);28 and, between 1969 and 1999 the administrative workers’ share of the US health labor force grew from 18.2 to 27.3%, while in Canada it grew from 16.0% in 1971 to 19.1% in 1996.29 What is of obvious concern is that these reports suggest that at least one-third of the total administrative-type positions in the US health field could well be eliminated by the implementation here of a global budget reimbursement methodology.
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Those with clinical backgrounds are more likely to survive When current administrative structures would be slowly decimated under global budgeting, those with clinical backgrounds (i.e. physicians, nurses, pharmacists, physical therapists) would be in a far more shielded position than those employed in management-oriented disciplines. The reason being that patients still need to be cared for under global budgets, but most employment in the executive, business, marketing, and similar offices will be eliminated as the ‘‘competitive environment’’ is significantly curtailed. Global budgets could be expected to create mass layoffs for nonclinical management types, the decrease, based on Canadian comparisons, estimated to be up to two-fifths of then current employment levels. The health management field might no longer be viewed as a growth industry, except for possibly those with clinical, hands-on patient care skills. As a result, the administrative hierarchy of acute care facilities could slowly become far more comparable to those in Europe (i.e. physicians more often in command). In summary, highly ranked health management programs in the United States will survive because they will still attract enough qualified students; and, in addition, they will be able to retain most of their faculty on the basis of securing sufficient federal and foundation support to serve as well-funded health services research centers. Those health management programs heavily wedded into internet teaching and whose tuition is reasonably priced (some as low at $12,000–$13,000 for a MBA in health management) should still be attractive, since a relatively small investment provides an additional credential in a far more competitive job environment. The long-run prognosis for most low- and middle-level health management programs in the United States is questionable.
Non-MD health managers have tough time in Europe While for the last half century the MHA degree has been the ‘‘union card’’ to gain employment and advancement in the US health and hospital field, securing a similar executive position in Europe is somewhat more complicated. As early as the 1950s, the Kings Fund started recruiting annually qualified individuals to develop future NHS leaders. Adjusted for differences in population, the NHS program historically has roughly 300 graduates/annum compared to currently 3000/annum masters level graduates in the United States. Over the last six decades this NHS training scheme has witnessed a huge number of organizational and curricula
modifications,30 a significant advantage over the US scene is that these trainees are paid while they are learning rather than paying out of pocket for tuition and other expenses. The overall approach of NHS trainees rotating through various facilities, undertaking major projects, and having modest ties to some academic health management program reminds this American of our early (prior to 1965) attempts to produce health managers by preceptorship. Most often it failed here, since the mentored student did not obtain in the 2-year period a sufficient background in the content areas commonly taught in schools of business (finance) and in schools of public health (medical care organization). NHS trainee graduates generally receive a diploma rather than a MBA (without writing a thesis) suggesting some perceived lack of academic rigor in this NHS program. Possibly of no surprise is that Nicol,31 when tracing the issues of leadership and management of the NHS, cites it as being a ‘‘bitter and poisonous one,’’ since the 1983 Griffiths Report recommended that a hospital’s managerial control should be under the aegis of appropriately trained managers who would work closely with physicians. As a result, physicians were profoundly distressed at the real or perceived power shift in an institution’s decision-making process, particularly when nurses took up additional leadership roles too. Bate32 reported (2000) that physicians then and probably true even today to a greater or lesser degree, still do not ‘‘accept the legitimacy of management,’’ and as a result undermine managerial power. Although politically communicated to save significant public funding, one wonders whether these historically poor interrelationships between physicians and experienced managers led to the ‘‘Nicholson challenge’’ that focuses on culling of NHS administrative costs by one-third and the sacking of 45% of the middle and senior NHS managers.
The value in Europe of a masters level health management education Unfortunately, in most of Europe, a degree from an established health management program is not seen uniformly as a key to prepare an individual to be anointed with leadership skills, proficiency in managing a facility, and being well versed on the delivery of healthcare services. West et al.33 noted that this is complicated by the fact that ‘‘there is growing recognition that clinical competence is not the same as managing competence, but there are many clinicians with little or no managerial training who are successful managers and leaders.’’ Possibly the best evidence for the perceived limited worth of graduating a health management program in Europe is that it is rare that the MHA or equivalent degree is required when applying
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for a position, something that would be unusual in the United States. In fact, almost all hospital managers in Europe have a bachelor’s degree and it is relatively common for them to have a master’s degree (the major not being critical). The focus there in the selection process is on management competence with more limited concern whether the candidate is well versed and experienced in the health field.
Privatization of hospitals and insurance benefits The privatization of hospitals, for example, is well underway in Germany, the United Kingdom, and the United States.34 In 2009, the proportion of German hospitals managed as for-profit overtook the number of government-sponsored facilities and are quickly approaching the available not-for-profits. In the United Kingdom, 12% of its population is enrolled in private health insurance plans and there are over 200 investor-owned hospitals, most of them with fewer than 50 beds. Graduates of health management programs will be sought after to become the executive and operational staffs of these for-profit oriented institutions. Other factors in increasing the future demand in Europe for health managers and the expansion of health management programs are dependent on such changes as: (a) whether a nation’s health leadership will start focusing on analyzing cost versus quality of care in an attempt to deliver an enhanced quality and quantity of service at a reduced cost; and, (b) whether more nations will undertake further experimentation into the possibility of privatizing healthcare insurance and its benefits. Above average income Germans can opt out of their statutory system, and thereby, can obtain a broader range of benefits, less waiting times, and more luxurious accommodations in the ‘‘private sector,’’ an option that will be of increasing interest in many other European countries.
European health management programs should position themselves The European health management programs that probably have the best chance to expand their goals and objectives in the future are those located in countries where there is an overriding national interest in delivering more and better health services for less money; where the trend toward privatization of the healthcare system is relatively ‘‘positive’’; where appointments are made on professional ability rather than on party affiliation; where their health management faculties are
willing to expend considerable resources in offering continuing education to those in the field whether it be for physicians, nurses, and various allied health personnel; and, where the professors have the interest and the ability to publish useful research findings for practitioners and public officials. Focusing only on teaching undergraduate and graduate students in health management is short sighted. Working with those in the ‘‘trenches’’ will further the health field, health managers generally, and their faculties, whether the program is located in the United States or in Europe. In the long run, in Europe and in the United States the heyday for non-clinical-oriented health managers for reasons stated earlier should be viewed with caution. More and more trade-offs between quality of care and costs will be necessary to shrink healthcare expenditures, suggesting that those with clinical backgrounds will gain the upper hand in the organization, management, and financing of health services and facilities. This view is supported by Goodall35 who proposes that the ‘‘better hospitals are managed by physicians.’’ Interestingly, a recent (2011) German study36 suggests that government hospitals (usually managed by physicians) are more efficient, but for-profit hospitals (usually managed by nonphysicians) have a higher quality of care, possibly explained by their admitting less acutely ill patients. In conclusion, there is reason to believe in the long term that those health management programs best positioned to serve the public, their university, and their graduates are those academic endeavors that can integrate business school theory and quantitative skills, with healthcare delivery-oriented concepts most often offered in schools of public health, medicine, nursing, and allied health; can provide meaningful continuing education programs and research findings; and, can sponsor community-oriented activities. Moreover, the health management program should be broadly based within the university and have a relatively large interdisciplinary faculty consisting of social and quantitative scientists; and, some professors with solid academic training, who also have had some significant hands-on experience in the field. Unfortunately, most health management programs in Europe and in the United States will fall significantly short in being able to implement these proposed goals and objectives. These are most sobering thoughts particularly as they come from one who started with an undergraduate degree in economics, is a 0 58 graduate of a hospital administration program (Yale), immediately went on over a half century ago to complete a doctoral degree from a department now named health management and policy (University of Michigan); taught hospital
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administration at UCLA; and at 33 years of age became the foundation professor and director of the health services management program at the University of Missouri-Columbia. Taught 6 months in 1969 in Australia under a W.K. Kellogg Foundation visiting professorship grant. Left the Missouri program in 1971 as a tenured full professor in their medical school and spent the last 30 years of his career as a full-time healthcare consultant. References 1. American College of Healthcare Executives (ACHE). Code of ethics. Chicago: ACHE, 2013. 2. West DJ, Filerman GL, Ramirez B, et al. CAHME. International healthcare management education. Phase I. Arlington, VA: Commission on Accreditation of Health Management Education, May 2011, 203 pages. 3. Prall CE. Joint commission on education: The curriculum in hospital administration. Chicago: Physicians’ Record Co, 1948. 4. Olsen HV. Commission on university education in hospital administration. University education for hospital administration. Washington, DC: American Council on Education, 1954. 5. Association of University Programs in Healthcare Administration (AUPHA). ‘‘The future of education and practice in health management and policy— proceedings from the National Summit.’’ J Health Adm Educ Special Issue, 2001. 6. Griffith JR, Warden GL, Neighbors K, et al. A new approach to assessing skill needs of senior managers. J Health Adm Educ 2002; 20(1): 75–98. 7. Calhoun JG, Vincent ET, Baker GR, et al. Competency identification and modeling in healthcare leadership. J Health Adm Educ 2004; 21(4): 419–440. 8. Saunders GE. The NHS national management training scheme in England: A chronology, February 2006. 9. Saunders GE. Themes that emerge from the fifty years of the English NHS management training scheme, February 2006. 10. Ovretveit JA. Developing public health service management in Europe. Eur J Pub Health 1998; 8: 87–88. 11. Maly I. Public health management and policy education and training: Czech Republic. In: Rosenbaum A, et al. (eds) Health care delivery systems: Opportunities for public management education in Czech, 1st ed. Bratislava: NISPCee, 2004, pp.121–141. 12. West DJ Jr, Costello M and Ramirez B. Privatization and management development in the health sector of Georgia. World Health Popul 2011; 12(4): 14–23. 13. Chubarova TV. Health management education in Russia in the context of health care policy and reforms. http:// nuspa.org/introduc/groups/public/documents/rispadee 0unpaio15017.pdf
14. Rusnakova V, Bacharova L, Boulton G, et al. Assessment of management education and training for healthcare providers in the Slovak Republic. Hosp Top 2004; 82(3): 18–25. 15. Yasar GY and Boutsioli Z. Comparison of health management programs in Turkey and Greece. Health Sci J 2011; 5(4): 320–334. 16. Loebs S. Report on graduate health management education in the United States 2001–2011 and recommendations for improvement. A study commissioned by the National Center for Healthcare Leadership, Chicago, Illinois, 2012, 39 pages. 17. Weil TP. MHA’s are not taught by MHA’s: A call for a more hands-on-orientation. J Health Adm Educ 2013; 30(2): 138–154. 18. Weil TP. MHA’s are not taught by MHA’s: A call for a more hands-on-orientation. J Health Adm Educ 2013; 30(2): 138–154. 19. Woolhandler S, Campbell T and Himmelstein DU. Costs of healthcare administration in the United States and Canada. N Eng J Med 2003; 349(8): 768–775. 20. Morra D, Nicholson S, Levinson W, et al. U.S. physician practices versus Canadians: Spending nearly four times as much money interacting with payers. Health Aff 2011; 30(8): 1443–1450. 21. Gaynor M and Town R. The impact of hospital consolidation-update. The synthesis project. Policy Brief #9. Princeton, NJ: Robert Wood Johnson Foundation, June 2012, 9 pages. 22. Weil TP. Hospital mergers: A panacea? J Health Serv Res Pol 2010; 15(4): 251–253. 23. Pharmaceutical price controls in OECD countries: Implications for U.S consumers, pricing, research and development, and innovation. Washington, DC: US Department of Commerce, December 2004. 24. Weil TP. Privatization of hospitals: Meeting divergent interests. J Health Care Finance 2011; 38(2): 1–11. 25. Bonner E. Law school applications fall as costs rise and jobs are cut. The New York Times, 30 January 2013, pp.1 and 13. 26. Schrijvers G. Global payment for health services as a solution in the financial crisis in Europe. Int J Integr Care 2012; 31(12): e228. 27. Fuchs VR and Hawn JS. How does Canada do it?: Comparison of expenditures for physician services in the United States and Canada. N Eng J Med 1990; 323: 884–890. 28. Weil TP. How do Canadian hospitals do it? A comparison of utilization and costs in the United States and Canada. Hosp Top 1995; 73: 10–22. 29. Woolhandler S, Campbell T and Himmelstein DU. Health care administration in the United States and Canada: Micro-management, macro costs. Int J Health Serv 2004; 34: 65–78. 30. Saunders. The NHS national management . . . , op cit. 31. Nicol ED. Improving clinical leadership and management in the NHS. J Healthcare Leadership 2012; 4: 59–69.
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32. Bate P. Changing the culture of a hospital from hierarchy to networked community. Pub Admin 2000; 789(3): 485–512. 33. West DJ Jr, Ramirez B and Filerman GL. Leadership and globalization: Research in health management education. World Hosp Health Serv 2012; 48(3): 31–33. 34. Weil TP. Privatization of hospitals. . ., op cit.
35. Goodall A. Physician leaders and hospital performance; is there an association? Soc Sci Med 2011; 73(4): 535–539. 36. Tiemann O, Schreyogg J and Busse R. Which type of hospital ownership has the best performance? Evidence and implications from Germany. Eurohealth 2011; 17(2–3): 31–33.
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Health management education in Europe and in the United States: A comparative review and analysis
Health Services Management Research 26(2–3) 76–85 ! The Author(s) 2013 Reprints and permissions: sagepub.co.uk/journalsPermissions.nav DOI: 10.1177/0951484813512288 hsm.sagepub.com
Thomas P Weil1
Abstract In Europe and in the United States, health management education and the role of health managers are patterned and consistent with how the country’s healthcare system is organized, managed, and financed. In the United States, the feefor-service, entrepreneurial dominated approach, resulting in health being one of the few remaining growth industries, has created a huge demand for additional health management education programs and managers. Therefore, universities finding themselves in an economic slump are attracted to establish health services administration programs (a North American term) since they require limited capital, continue to attract enrollment, and contribute to the ‘‘social good.’’ In contrast, the European countries’ healthcare systems provide universal access to care and strict, governmental fiscal control on healthcare expenditures. As a result, the American masters-level health manager model has not thrived there—although not willingly conceded is the fact that in Europe physicians continue to dominate the management ranks. After outlining a number of the current problems facing US health management education, this article focuses on: (1) a projected shuttering of the weaker American health management programs and the market for health managers being overly saturated (such as for lawyers now), because the US gross domestic product expenditures for health will decrease over the next two decades from the current level of 17.6% to be somewhat comparable to the 11.5% in Canada, France, and Germany; and (2) a projected increase in the enrollment among European health management programs for several reasons: (a) a huge spike in the demand for additional clinically oriented, health managers who can trade off concerns of cost versus quality; and (b) the constraints of most countries’ statutory health insurance plans will become increasingly more evident so that privatization of healthcare services will become an option for those with above average incomes and, thereby, generate a demand for newly minted health managers similar to the US masters-level graduate.
Keywords European programs in health services administration, health management education, health services administration
Health management: A profession? The American College of Healthcare Executives (ACHE), with its over 45,000 members, subscribes to the belief that the ‘‘fundamental objectives of the healthcare management profession are to maintain or enhance the overall quality of life. . .’’1 By participating in ACHE seminars, and by passing examinations and interviews, a US health manager can reach the level of fellowship in 8 years, which the college contends is equivalent to passing specialty board certification in a medical discipline. Many of us do not believe this proposition for a number of reasons. The evidence worldwide is that health management is not as mature a profession as medicine, law, and nursing, nor do health management programs generally
have much independent academic autonomy within their universities. Unfortunately, graduate health management programs to date, with rare exceptions, simply have not attracted students qualified for admission to medical schools nor to top law schools, although applicants visualize the field as a path ‘‘to move up the professional ladder,’’ combining a stimulating executive role with the possibility of doing ‘‘some good.’’ What may also be appealing is that health management might be briefly described as an amalgamation of some 1
Asheville, NC, USA
Corresponding author: Thomas P Weil, 1400 Town Mt. Road, Asheville, NC 28804, USA. Email: [email protected]
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business school principles and techniques tailored to the health field and an overview of the historical, social (including public health), political, and economic aspects of the delivery of healthcare services. It is within these above underlying parameters related to health management education and being a health manager that this paper has been prepared.
Purposes of this paper The purposes of this paper are fourfold: (a) to summarize the major studies in health management education in the United States and among the European nations and to illustrate how the specific country’s healthcare system is organized, managed, and financed has a huge impact on how that nation’s health management education is designed and how health managers function there; (b) to outline what appear in the United States to be the major issues in health management education; (c) to speculate on the possible impact on health management manpower needs and on the health management programs, if the United States over say two decades reduced its gross domestic product (GDP) expenditure for health from currently 17.6% to between 11.4 and 11.6%, thereby being comparable to Canada, France, and Germany; and (d) to speculate under what circumstances the role of the European health management programs and health managers will be enhanced.
Early studies of health management education in the United States When the US Congress in 1965 enacted Medicare and Medicaid legislation, there were 33 health services administration (HSA) programs (all were or were in the process of being accredited) and the GDP expenditure for health was 6.1%. Almost a half century later (2013), there are over 300 health management programs, with only 73 of them are accredited, over 3000 masters in health administration (MHA) graduates/ annum, and the GDP expenditure for health here has swelled to 17.6%. A somewhat slower growth in the number of health management programs has been the pattern worldwide.2 For over the last half century, the highly entrepreneurial, competitive, multipayer, and fee-for-serviceoriented US healthcare system has been the backdrop of at least three major studies of health management education. With a grant in 1945 from the W.K. Kellogg Foundation, a Joint Commission on Education was established that then sponsored the Prall Report,3 whose recommendations strongly favored the field’s service commitment and the schools of public health rather than the more fiscal-oriented concepts associated with the graduate schools of business. This study was
followed less than a decade later with the Olsen Report4 recommending just the reverse—that health management programs should be located in business schools. These early disagreements of the appropriate core curriculum seem today to be rather erroneous in the context that by the middle 1960s, there were American and Canadian health management programs already granting both a MBA and a MPH jointly. Today, many programs offer double degrees with law, medicine, public administration, and other disciplines. Over one-third of the 141 US medical schools have a joint MD/MBA program over a 5-year period, the MBA portion often taken as electives in the medical school curriculum.
Practitioner leadership complains about programs Just over a decade ago in the United States, major criticism was laid on the health management programs by some of the field’s most prominent practitioners for their faculties not providing the appropriate curriculum and leadership training thought to be needed by their graduates. Where there was possibly some agreement between the practitioners and these health management faculties was that insufficient attention was being given to practical learning as an integral part of the 2-year academic program. The statement that gained these faculties’ attention, even among the ‘‘quality programs,’’ was the CEOs’ suggestion that there was a lack of clear, documented advantage of hiring a master’s degree graduate from an accredited health management program compared to a ‘‘straight’’ MBA. This eventually led to the formation of the National Center for Healthcare Leadership (NCHL) and its many reports and studies.5 Eventually, there was agreement with ‘‘competency identification and modeling in health leadership’’ as outlined by Griffith et al.6 and Calhoun et al.,7 an approach that at first was highly controversial, but now has been incorporated as part of the 2011 Commission on Accreditation of Healthcare Management Education (CAHME) accrediting standards.
UK health management education Compared to the US scene, UK graduate health management education has not received the same intensity of inquiry. Conversely, there have been frequent inquiries of the National Health Service (NHS) Nation Management Training Scheme being so well documented by Saunders8,9 both chronologically and by theme. These NHS-oriented reports are consistent with Ovretveit’s10 comments early on that the ‘‘European countries could significantly increase the
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productivity of their healthcare services by reducing costs through national programs of health management development for physician managers, hospital directors, and middle-level managers.’’ The perceived impact of the graduate health management programs in the United Kingdom (that attracts mostly those in mid-career), in an environment where for all practical purposes there is one major employer (i.e. NHS), is significantly different than the HSA programs in the United States. This might be illustrated by the fact that these masters level educational endeavors or their graduates received only a few comments in the recent (2013) Francis Report; the Health and Social Bill 2011 (recommended a management staff reduction of 25,000 positions); the King’s Fund ‘‘Commission on Leadership and Management in the NHS’’; the ‘‘Talent Management in the NHS Managerial Work Force’’; and other similar reports. References were far more prevalent for the need for management training for physicians and nurses and their playing a significant role in enhancing the NHS’s future leadership and management – a theme to be discussed in some detail later in this paper.
Health management programs in East Europe In contrast, a significant number of published studies and reports on health management education are available from several eastern European countries: the Czech Republic,11 Georgia,12 Russia,13 the Slovak Republic,14 and Turkey and Greece.15 As expected, health management in Eastern Europe, like elsewhere in the world, is patterned and consistent with how the country’s healthcare system is organized, managed, and financed. The old Soviet bloc, government-owned and operated acute care hospitals were managed by poorly paid physicians who received minimum training in administration while attending medical school, while formally trained health managers were virtually nonexistent. A few short courses for physicians were offered, but any semblance of a meaningful role for non-MD administrators never seemed to evolve, in spite of the fact there was a continuing need in these countries that for all practical purposes provide universal access for healthcare, to find ways to shrink the system. Since the breakup of the Soviet bloc into the Commonwealth of Independent States, some eastern European countries have experienced partial privatization of their healthcare systems and thereby have generated the usual societal concerns of creating two levels of patient services. In Georgia, for example, with the privatization of part of its healthcare system, there has been a far greater interest in the training of masters
level health managers as well as the health management programs offering short courses to all those currently employed in the field. Possibly unique to Georgia is that their private health industry has been resistant to providing student field experiences and administrative residencies without fiscal remuneration. In Turkey, a non-Soviet bloc country, historically there has been considerably more interest in health management education than elsewhere in Eastern Europe, as evidenced by the fact that in 2009 there were 17 masters and five doctoral HSA programs in a country that has a population of 73.7 million persons. The curriculum there, as well as in the neighboring Greece, is quite comparable with health management programs in the United States, except that both of them provide significantly more ‘‘practical learning.’’ Approximately 70% of those completing the Athensbased HSA program find employment upon graduation as an assistant manager. In Turkey the situation is quite similar to other Eastern European nations as health management graduates have far more difficulty in obtaining employment, since almost all hospitals are government owned and managed, and those with a masters degree in health management are generally not overly welcome. When a Turkish MHA graduate has a prior position within the government system, a promotion is usually forthcoming, although this often depends on his/her political connections. The party in power appoints its ‘‘partisans’’ to the senior hospital administrative positions. Other graduates often are forced to seek employment within the private sector, sometimes not even in the healthcare field.
Major issues facing US health management programs There are a significant number of issues facing health management programs in the United States, that undoubtedly exist frequently in Europe too, and are well documented in Loebs’ 2011 report for the NCHL.16 Some of our concerns here are summarized as follows: 1. Student enrollment. Top-ranked health management programs in the United States (e.g. the Universities of Michigan, Minnesota, North Carolina-Chapel Hill, Pennsylvania (Wharton)) have four times as many applicants as they accept for their 2-year, full-time masters program, attracting those averaging 25 years of age. The health management programs ranked at the bottom accept virtually everyone who can pay their tuition and other related costs. There are numerous executive HSA programs available, some of them now strictly online, that attract mostly mid-career health professionals, who
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are either interested in enhancing their knowledge to perform with greater effectiveness in their present position or, more frequently, are interested in a promotion or modifying their future career pattern. The American College of Physician Executives’ Masters of Medical Management program tied to four universities is one example catering to mid-career physicians interested in executive-type positions, having since 1998 conferred masters degrees on 415 graduates and currently having over 2000 physicians in its pipeline. 2. Faculty. Only 10% of the full-time faculty in the topranked health management programs in the United States have a masters or doctoral degree in health management, HSA, or health services research.17 While law and medical students (in their clinical years) are instructed primarily by lawyers and physicians, health management students here are taught by doctoral graduates from the social and quantitative sciences. And this is unlikely to change, since the majority of the current doctoral students in health services research indicate little interest in teaching positions—they aspire to be healthcare researchers emulating the preferred footsteps of their thesis advisers. What is so noteworthy is the significant shift in the last 50 years from small (12 students) ‘‘nuts and bolts’’ programs frequently taught by then-current or former practitioners to some program enrollments exceeding 100 students over the 2-year curriculum, tutored by faculty who for the most part are without any direct academic or hands-on experience in the health field. 3. Curriculum. When the program faculties were dominated in the United States by former or current practitioners, there was limited concern expressed by hospital and other healthcare executives when hiring these graduates, the young health management neophytes having received sufficient hands-on type knowledge and experience. Faced with the reality that the marketplace for MHA–PhDs in health services research (popular in the 1960s and 1970s) had virtually dwindled, the NCHL leadership decided to develop some prescribed ‘‘competencies’’ to provide guidelines to what the health management faculties should teach in order to receive CAHME accreditation. Forgetting about the merit of this proposal, the fact that the health management programs at the University of Pennsylvania, University of California-Berkeley, and Yale University indicated that they would no longer seek accreditation could be considered suggestive of some possible concerns with the accreditation process. 4. How much of a practice orientation do health management graduates really need? The traditional chasm between those who teach and those who
practice is somewhat inherent in their differing roles, but has greatly widened from the time the program faculties were dominated primarily by practitioners compared to the current environment where almost all the full-time teaching staff are PhD social and quantitative scientists. In an earlier paper,18 some recommendations were made to overcome these concerns: during the summer externship shadowing senior executives rather than working on projects with department heads; more frequently including field, community-oriented and internal management studies as part of the second-year curriculum; retired senior executives teaching case studies after a 3-month ‘‘boot camp’’ to be appropriately oriented for such a role; and all HSA students to have a preceptor or mentor with whom they can dialogue frequently through the 2-year program. Most faculties will find implementing these recommendations difficult.
Potential reductions in US health expenditures The projected future enrollment in health management education programs and the need for additional, welltrained health managers in the United States will be dependent on whether the percentage of the GDP for health will continue to increase, remain at status quo, or decrease. In rough terms, the United States has a 50:50 private–public healthcare system that might be most simply described as where most healthcare providers are paid on a fee-for-service basis encouraging physicians, hospitals, and others to increase the volumes of services to enhance their total revenues. This reimbursement methodology does not appear to be sustainable in the long haul when almost a fifth of our GDP are being consumed by health services. This is a serious issue as the US entitlement programs need to be contained as local, state, and federal indebtedness is becoming a major fiscal and political issue. If the United States is to reduce its health expenditure from 17.6% to approximately 12.0% of GDP expenditure for health, the field’s leadership is faced with a number of options, a few key ones are enumerated below that could potentially have a significant impact on decreasing the demand for health managers: 1. Change the processing of health insurance claims. A study19 comparing administrative costs in Canada and the United States that not only included the insurers’ costs, but also the expenses incurred by employers, providers, and governmental agencies when arranging third-party coverage, concluded
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that the Americans spent $1059 per capita on health insurance administration compared to $307 in Canada. In the Canadian province of Ontario, physician practices spent $22,205 per doctor/annum for third-party transactional costs compared to $82,975 per doctor/annum in the United States, a potential saving here of approximately $276 billion per year.20 The solution is relatively simple—issue smart cards with pertinent personal and medical information to every American and thereby, eliminate 2.5–3.0 million white-collar positions in physicians’ offices, hospitals, insurance companies, and elsewhere in the US health field. Most health managers working in the health insurance industry and in its related activities would be terminated. 2. Halt further mergers, hospital–physician integration, and electronic medical records (EMR) development—probably it is not doable nor will it be totally effective. Studies of the overall efficacy of hospital mergers in the United States, Canada, and the United Kingdom have concluded that these consolidations culminate in the formation of large systems—monopolists that result in decreasing accessibility to healthcare services, increasing medical costs, and lowering the quality of care.21,22 Once an American hospital acquires a physician’s practice, a claim’s filing to Medicare and therefore, to most other insurers, is 30% higher than as a standalone doctor’s office simply because the service is now provided by an acute care facility. EMRs were suppose to decrease costs by reducing unnecessary duplication of tests and procedures; but, in addition to the initial capital cost to install the EMR system, this approach has been found to be more expensive since physicians can order additional procedures so easily with a single click. In the United States, thousands of health management graduates are employed in securing and implementing mergers and consolidations; in the acquisition and the operation of physician practices; and, in the implementation of EMRs. Thousands of health management positions would be terminated, if the expansion of existing integrated healthcare systems was slowed to a snail’s pace. 3. Implement a pharmaceutical cost review board in the United States. Enormous political opposition would be mounted by the pharmaceutical industry, if the US Congress attempted to enact legislation similar to the Canadian Patient Medicine Review Board; the French drug pricing decisions that are made jointly by its Ministry of Social Affairs and the Ministry of Economy; or, the UK’s Pharmaceutical Price Regulation Scheme.23 When compared to the other cost-saving options outlined
herein, only a relatively few health managers are currently employed in the pharmaceutical industry. 4. Shutter underutilized health facilities and services. Since healthcare services have high-fixed and lowvariable costs, significant fiscal savings could be potentially achieved by shuttering all the underutilized hospitals, ambulatory care facilities, outpatient surgery centers, and many physician-owned offices where specialized procedures such as MRIs and CT scans are provided. One example is where a not-for-profit or small public hospital experiencing fiscal distress, most often because of low occupancy or an adverse third-party patient mix, rather than being shuttered is now frequently being privatized; thereby, assuring existing accessibility for care to its local residents and maintaining existing jobs.24 No one wants an empty hospital building in the center of their community. Significant savings could be generated by phasing out all the ‘‘marginal’’ (particularly in terms of utilization) health facilities and services; such a downsizing of the healthcare market would eliminate a significant number of health management positions. These above cost reduction options are all politically tacky undertakings since they involve limiting access to care and often result in the loss of local jobs.
US enrollment in health management programs in the short term Continued high enrollment in the United States 2-year, full-time health management programs is dependent on whether enough individuals in their 20 s continue to visualize healthcare as a growth industry; and, for the online executive programs for an MBA in health management, whether those in mid-career healthcare positions still sense the need for additional training to maintain their existing job, desire to pursue opportunities closer to the top, or, aspire to have an additional credential to be better positioned to potentially modify their careers. With the implementation of Obamacare, and all its new rules and regulations (but without providing universal access nor with significant cost controls), there will be an increasing demand for health management personnel to implement these legislative measures (e.g. the new health insurance exchanges). More health management positions at the entry level should be in the offing in the United States for at least several more years. In fact, one should anticipate that a few additional health management programs will be established in the United States, particularly those that facilitate learning online, an approach that continues to gain more
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popularity particularly among those in mid-career seeking a promotion. Some here might suggest this to be an overly optimistic prediction, since if you scan the current alumni directories of established health management programs, one-quarter or more (after say 10 years after graduation) are no longer working in the health field most often explained by a mismatch of the individual’s personality to some perceived constraints of working in healthcare, better opportunities in another industry, or simply the loss of interest of being employed in the health field. In the short term, the top-ranked health management programs should continue to receive the same number of qualified applicants; the weaker programs may experience a slight downturn in candidates primarily because more potential applicants completing their undergraduate degrees are already strapped with significant debt and are concerned about its repayment in an environment where finding a good paying job is sometimes difficult to achieve. These observations should be considered in the context that the total cost of attending a 2-year residential program in health management at one of the top-ranked US universities is in excess of $100,000.
Long-range projection of enrollment in US health management programs In the long run, with a projected decrease in the percentage of GDP for health, one might speculate that what is occurring among law schools as they have experienced a significant drop in applications for admission might happen in the future to health management programs. In 2004, there were 100,000 applicants to American law schools; in 2013, this is likely to drop to 54,000 potential students.23 Such startling decreases have forced law school deans into a soulsearching mode on the future of legal education and where the profession is going overall. This significant change in number of law school candidates might be related to a number of factors: (a) a declining job market, (b) existing student loans, (c) most law schools are perceived to be too expensive, and (d) some even say the drop in applicants is an indictment of the legal training itself—a failure to keep up with the profession’s or consumer needs. Until recently, if you were looking to step on the escalator to upward economic and social mobility you went to law school, studied for an MBA at a top graduate school of business, or you matriculated at a health management program—one of them already appears to have fallen by the wayside. What would really modify the number of applicants and obviously the fiscal well-being of many health
management programs is a major shift in how amply the US healthcare system is financed. The current political scene here suggests increasing pressures from both the left and right to avoid any additional federal, state, and local indebtedness. It would be far easier to balance our ledgers if the GDP expenditure for health was not increasing twice (until recently) the rate of inflation. Before Obamacare, we had over 40 million Americans without health insurance. It would be political suicide for anyone in public office to propose universal access and some form of setting a dollar ceiling on healthcare expenditures such as with global budgets. But US policy makers now need to be thinking about such a proposal, and how it will effect health management education and the need for health managers.
Impact of implementing global budgets in the United States To set a ceiling on their total health expenditures, Canada and most European countries for decades have used global budgets as an approach whereby individual providers receive a ‘‘budget for their own costs’’; or, the country uses a second scenario ‘‘to work with global budgets for health care providers servicing a total population.’’26 Conservatives in the United States, in particular, have seriously resisted this approach citing it rations needed health services, forgetting that we already limit healthcare services (e.g. elective surgery, dental care, mental health services) by family income and by the availability of health insurance coverage. The impact that a global budget type methodology might have in restraining healthcare expenditures in the United States is rather sizable as evidenced by these studies: (1) the per capita expenditure in 1985 for physicians’ services in Canada was $202 compared to $347 in the United States (a ratio of 1.72) explained entirely by higher fees (particularly for procedures), yet the number of total physician services provided per capita being lower in the United States;27 (2) the total number of paid hours per discharge for administrative and fiscal services in US teaching hospitals in 1989 was 34.23 h compared with 18.46 h in a similar type of facility in Canada (a ratio of 1.58);28 and, between 1969 and 1999 the administrative workers’ share of the US health labor force grew from 18.2 to 27.3%, while in Canada it grew from 16.0% in 1971 to 19.1% in 1996.29 What is of obvious concern is that these reports suggest that at least one-third of the total administrative-type positions in the US health field could well be eliminated by the implementation here of a global budget reimbursement methodology.
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Those with clinical backgrounds are more likely to survive When current administrative structures would be slowly decimated under global budgeting, those with clinical backgrounds (i.e. physicians, nurses, pharmacists, physical therapists) would be in a far more shielded position than those employed in management-oriented disciplines. The reason being that patients still need to be cared for under global budgets, but most employment in the executive, business, marketing, and similar offices will be eliminated as the ‘‘competitive environment’’ is significantly curtailed. Global budgets could be expected to create mass layoffs for nonclinical management types, the decrease, based on Canadian comparisons, estimated to be up to two-fifths of then current employment levels. The health management field might no longer be viewed as a growth industry, except for possibly those with clinical, hands-on patient care skills. As a result, the administrative hierarchy of acute care facilities could slowly become far more comparable to those in Europe (i.e. physicians more often in command). In summary, highly ranked health management programs in the United States will survive because they will still attract enough qualified students; and, in addition, they will be able to retain most of their faculty on the basis of securing sufficient federal and foundation support to serve as well-funded health services research centers. Those health management programs heavily wedded into internet teaching and whose tuition is reasonably priced (some as low at $12,000–$13,000 for a MBA in health management) should still be attractive, since a relatively small investment provides an additional credential in a far more competitive job environment. The long-run prognosis for most low- and middle-level health management programs in the United States is questionable.
Non-MD health managers have tough time in Europe While for the last half century the MHA degree has been the ‘‘union card’’ to gain employment and advancement in the US health and hospital field, securing a similar executive position in Europe is somewhat more complicated. As early as the 1950s, the Kings Fund started recruiting annually qualified individuals to develop future NHS leaders. Adjusted for differences in population, the NHS program historically has roughly 300 graduates/annum compared to currently 3000/annum masters level graduates in the United States. Over the last six decades this NHS training scheme has witnessed a huge number of organizational and curricula
modifications,30 a significant advantage over the US scene is that these trainees are paid while they are learning rather than paying out of pocket for tuition and other expenses. The overall approach of NHS trainees rotating through various facilities, undertaking major projects, and having modest ties to some academic health management program reminds this American of our early (prior to 1965) attempts to produce health managers by preceptorship. Most often it failed here, since the mentored student did not obtain in the 2-year period a sufficient background in the content areas commonly taught in schools of business (finance) and in schools of public health (medical care organization). NHS trainee graduates generally receive a diploma rather than a MBA (without writing a thesis) suggesting some perceived lack of academic rigor in this NHS program. Possibly of no surprise is that Nicol,31 when tracing the issues of leadership and management of the NHS, cites it as being a ‘‘bitter and poisonous one,’’ since the 1983 Griffiths Report recommended that a hospital’s managerial control should be under the aegis of appropriately trained managers who would work closely with physicians. As a result, physicians were profoundly distressed at the real or perceived power shift in an institution’s decision-making process, particularly when nurses took up additional leadership roles too. Bate32 reported (2000) that physicians then and probably true even today to a greater or lesser degree, still do not ‘‘accept the legitimacy of management,’’ and as a result undermine managerial power. Although politically communicated to save significant public funding, one wonders whether these historically poor interrelationships between physicians and experienced managers led to the ‘‘Nicholson challenge’’ that focuses on culling of NHS administrative costs by one-third and the sacking of 45% of the middle and senior NHS managers.
The value in Europe of a masters level health management education Unfortunately, in most of Europe, a degree from an established health management program is not seen uniformly as a key to prepare an individual to be anointed with leadership skills, proficiency in managing a facility, and being well versed on the delivery of healthcare services. West et al.33 noted that this is complicated by the fact that ‘‘there is growing recognition that clinical competence is not the same as managing competence, but there are many clinicians with little or no managerial training who are successful managers and leaders.’’ Possibly the best evidence for the perceived limited worth of graduating a health management program in Europe is that it is rare that the MHA or equivalent degree is required when applying
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for a position, something that would be unusual in the United States. In fact, almost all hospital managers in Europe have a bachelor’s degree and it is relatively common for them to have a master’s degree (the major not being critical). The focus there in the selection process is on management competence with more limited concern whether the candidate is well versed and experienced in the health field.
Privatization of hospitals and insurance benefits The privatization of hospitals, for example, is well underway in Germany, the United Kingdom, and the United States.34 In 2009, the proportion of German hospitals managed as for-profit overtook the number of government-sponsored facilities and are quickly approaching the available not-for-profits. In the United Kingdom, 12% of its population is enrolled in private health insurance plans and there are over 200 investor-owned hospitals, most of them with fewer than 50 beds. Graduates of health management programs will be sought after to become the executive and operational staffs of these for-profit oriented institutions. Other factors in increasing the future demand in Europe for health managers and the expansion of health management programs are dependent on such changes as: (a) whether a nation’s health leadership will start focusing on analyzing cost versus quality of care in an attempt to deliver an enhanced quality and quantity of service at a reduced cost; and, (b) whether more nations will undertake further experimentation into the possibility of privatizing healthcare insurance and its benefits. Above average income Germans can opt out of their statutory system, and thereby, can obtain a broader range of benefits, less waiting times, and more luxurious accommodations in the ‘‘private sector,’’ an option that will be of increasing interest in many other European countries.
European health management programs should position themselves The European health management programs that probably have the best chance to expand their goals and objectives in the future are those located in countries where there is an overriding national interest in delivering more and better health services for less money; where the trend toward privatization of the healthcare system is relatively ‘‘positive’’; where appointments are made on professional ability rather than on party affiliation; where their health management faculties are
willing to expend considerable resources in offering continuing education to those in the field whether it be for physicians, nurses, and various allied health personnel; and, where the professors have the interest and the ability to publish useful research findings for practitioners and public officials. Focusing only on teaching undergraduate and graduate students in health management is short sighted. Working with those in the ‘‘trenches’’ will further the health field, health managers generally, and their faculties, whether the program is located in the United States or in Europe. In the long run, in Europe and in the United States the heyday for non-clinical-oriented health managers for reasons stated earlier should be viewed with caution. More and more trade-offs between quality of care and costs will be necessary to shrink healthcare expenditures, suggesting that those with clinical backgrounds will gain the upper hand in the organization, management, and financing of health services and facilities. This view is supported by Goodall35 who proposes that the ‘‘better hospitals are managed by physicians.’’ Interestingly, a recent (2011) German study36 suggests that government hospitals (usually managed by physicians) are more efficient, but for-profit hospitals (usually managed by nonphysicians) have a higher quality of care, possibly explained by their admitting less acutely ill patients. In conclusion, there is reason to believe in the long term that those health management programs best positioned to serve the public, their university, and their graduates are those academic endeavors that can integrate business school theory and quantitative skills, with healthcare delivery-oriented concepts most often offered in schools of public health, medicine, nursing, and allied health; can provide meaningful continuing education programs and research findings; and, can sponsor community-oriented activities. Moreover, the health management program should be broadly based within the university and have a relatively large interdisciplinary faculty consisting of social and quantitative scientists; and, some professors with solid academic training, who also have had some significant hands-on experience in the field. Unfortunately, most health management programs in Europe and in the United States will fall significantly short in being able to implement these proposed goals and objectives. These are most sobering thoughts particularly as they come from one who started with an undergraduate degree in economics, is a 0 58 graduate of a hospital administration program (Yale), immediately went on over a half century ago to complete a doctoral degree from a department now named health management and policy (University of Michigan); taught hospital
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administration at UCLA; and at 33 years of age became the foundation professor and director of the health services management program at the University of Missouri-Columbia. Taught 6 months in 1969 in Australia under a W.K. Kellogg Foundation visiting professorship grant. Left the Missouri program in 1971 as a tenured full professor in their medical school and spent the last 30 years of his career as a full-time healthcare consultant. References 1. American College of Healthcare Executives (ACHE). Code of ethics. Chicago: ACHE, 2013. 2. West DJ, Filerman GL, Ramirez B, et al. CAHME. International healthcare management education. Phase I. Arlington, VA: Commission on Accreditation of Health Management Education, May 2011, 203 pages. 3. Prall CE. Joint commission on education: The curriculum in hospital administration. Chicago: Physicians’ Record Co, 1948. 4. Olsen HV. Commission on university education in hospital administration. University education for hospital administration. Washington, DC: American Council on Education, 1954. 5. Association of University Programs in Healthcare Administration (AUPHA). ‘‘The future of education and practice in health management and policy— proceedings from the National Summit.’’ J Health Adm Educ Special Issue, 2001. 6. Griffith JR, Warden GL, Neighbors K, et al. A new approach to assessing skill needs of senior managers. J Health Adm Educ 2002; 20(1): 75–98. 7. Calhoun JG, Vincent ET, Baker GR, et al. Competency identification and modeling in healthcare leadership. J Health Adm Educ 2004; 21(4): 419–440. 8. Saunders GE. The NHS national management training scheme in England: A chronology, February 2006. 9. Saunders GE. Themes that emerge from the fifty years of the English NHS management training scheme, February 2006. 10. Ovretveit JA. Developing public health service management in Europe. Eur J Pub Health 1998; 8: 87–88. 11. Maly I. Public health management and policy education and training: Czech Republic. In: Rosenbaum A, et al. (eds) Health care delivery systems: Opportunities for public management education in Czech, 1st ed. Bratislava: NISPCee, 2004, pp.121–141. 12. West DJ Jr, Costello M and Ramirez B. Privatization and management development in the health sector of Georgia. World Health Popul 2011; 12(4): 14–23. 13. Chubarova TV. Health management education in Russia in the context of health care policy and reforms. http:// nuspa.org/introduc/groups/public/documents/rispadee 0unpaio15017.pdf
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