What is the Difference Between Healthcare Management and Healthcare Administration?
Last Updated February 3, 2022
The healthcare industry reached an impressive milestone in 2018. After decades of rapid growth, it became the top employer in the United States, passing manufacturing and retail, based on U.S. Census Bureau figures. The data shows the level of demand. U.S. Bureau of Labor Statistics projections anticipate a 16% increase in the number of healthcare jobs between 2019 and 2030*. That translates into about 2.6 million people joining the healthcare workforce.
This growth, combined with the complexity of the healthcare industry, has made the need for innovative, business-minded healthcare leaders greater than ever. It’s an attractive option for professionals who want their management and leadership skills to have an impact on the health and wellbeing of others.
Those who choose this route typically pursue careers in healthcare management and healthcare administration. While these terms are often used interchangeably, there are differences between healthcare management and healthcare administration that are important to know and understand before deciding on which to pursue as your career path.
Healthcare Management
In most industries, those in leadership positions either have a focus on day-to-day-operations or more “big picture” strategic goals. The same holds true in healthcare.
Those who choose a career in healthcare management focus on the overall management and big picture of the organization or specific department they oversee. In focusing on the big picture, such as developing the operation’s business strategy, those in healthcare management often work with the organization’s governing board to shape overall direction.
Job Titles in Healthcare Management
These managers can work anywhere within healthcare, from hospitals, community clinics, surgery centers, physicians’ offices and nursing homes. Based on the healthcare setting and organization’s size, healthcare management professionals may hold a variety of job titles.
Job titles in healthcare management can include:
- Hospital administrator
- Medical and health services manager
- Administrative services manager
- Physicians’ clinic manager
- Nursing home manager
- Healthcare compliance manager/officer
Many healthcare management jobs are available outside of the direct patient care settings of hospitals, clinics and nursing homes within companies that supply and support patient care organizations. These can include consulting firms, pharmaceutical companies and medical equipment manufacturers.
Roles and Responsibilities of Healthcare Managers
Wherever they may work, healthcare managers focus on managing all business aspects of their organization, often digging deeper into the day-to-day activities of departmental staff, processes and budgets and finance.
While job duties differ, general responsibilities can include:
- Identifying and collaborating with external partners and managing outsourced business services
- Developing and maintaining the organization’s emergency procedures
- Fostering employee engagement and performance
- Setting the organization’s vision and mission for improving the quality of care
- Striving for overall operational efficiency and financial effectiveness
These responsibilities require expertise in working with financial budgets, knowledge of healthcare laws governing operations, critical thinking, negotiations, supervisory management and people leadership skills.
Educational Requirements for Healthcare Management
While it’s possible to enter the profession with a bachelor’s degree, master’s degrees are common among those working at the management level or hire and earning a graduate degree can lead to higher earnings and higher-level positions.
For those focused on the needed management skills and business acumen, a Master of Science in Healthcare Management could be the graduate degree of choice. This degree program is usually housed within a college of business and provides an interdisciplinary approach to the study and application of best healthcare management practices with a business-centered focus.
“This degree provides the business acumen to be highly successful in running a business—but a healthcare business. It’s business encircled by healthcare,” explains Dr. Michael Rip, Program Director of the Master of Science in Healthcare Management at Michigan State University.
Healthcare Administration
A healthcare administrator oversees the day-to-day activities of an organization’s or department’s clinical staff and the processes followed in how the department or unit goes about its work.
Healthcare Administration vs Healthcare Management
While healthcare management oversees the business of a healthcare organization, healthcare administrators oversee the day-to-day delivery of patient care and services, often by department, unit or even floor, depending on the type and size of the healthcare organization.
Roles and Responsibilities of Healthcare Administration
Job titles in healthcare administration can include:
- Clinic director
- Hospice care director
- Medical practice administrator
- Consulting healthcare administrator
- Home healthcare administrator
Healthcare administrators need expertise in process and project management, working with financial budgets, and the latest techniques in attracting and retaining top talent. Other key skills include critical thinking, active listening, communication and evidence-based decision making.
All of these skills are critical to the administrative responsibilities of:
- Recruiting and developing staff
- Overseeing staff work schedules and processes
- Creating a safe, quality work environment
- Developing goals and objectives for their department
- Establishing departmental budgets and allocating financial resources
- Signing off on the purchase of needed equipment and other resources
Educational Requirements for Healthcare Administration
Much like healthcare management, it’s possible to enter healthcare administration with a bachelor’s degree, but many organizations prefer candidates that have a relevant master’s degree.
Whereas the Master of Science in Healthcare Management is grounded in a business school, a Master of Health Administration (MHA) is typically offered through schools of public health, allied health or even by schools of medicine, with the degree’s focus being to equip medical professionals with administrative skills and knowledge.
“Traditional MHA degrees provide you with a lot of healthcare knowledge, but in fact, not superior business acumen,” says Dr. Rip. “You have to understand the business side of healthcare to have that financial understanding of budgets and be able to adjust your business model to stay solvent—it’s complex.”
Management and Administration in the Business of Healthcare
The healthcare industry needs leaders who understand the nuances of healthcare organizations but can approach the management of them from a business perspective.
“Healthcare is not based on traditional supply and demand; it can’t run like it’s a ‘product’ to stock and sell,” emphasizes MSU’s Dr. Michael Rip. “It’s not that kind of business model.”
Healthcare spending has reached $11,172 per person, a number projected to grow in the coming years. These rising costs, along with an increased demand for services, shifting government regulations, technological innovations and applications within healthcare and the COVID-19 crisis, mean the need to make operations more efficient while also providing improved care has never been greater.
From healthcare management to healthcare administration, the industry needs leaders with the expertise to navigate these many challenges and successfully guide organizations forward in their number one goal—providing quality patient care.
Study healthcare management within a solid business framework with a concentration in the field of Leadership.
*National long-term projections may not reflect local and/or short-term economic or job conditions and do not guarantee actual job growth. Information provided is not intended to represent a complete list of hiring companies or job titles, and degree program options do not guarantee career or salary outcomes. Students should conduct independent research on specific employment information.
