Management of Hospitals and Health Services:  Strategic Issues and Performance Management of Hospitals and Health Services:  Strategic Issues and Performance
By Rockwell Schulz and Alton C. Johnson
2003/07 - Beard Books
1587981742 - Paperback - Reprint - 343 pp.

A provocative and useful compendium of ideas and historic perspectives that are still current and applicable.

Publisher Comments

Category: Healthcare

This title is part of the Healthcare Administration list.

Of Interest:

Building a Health Care Organization: A Challenge for Physicians and Managers 

Competitive Strategy for Health Care Organization 

Falling Through the Safety Net: Insurance Status and Access to Health Care

Health Care and Insurance: Distortions in the Financing of Medical Expenditures

Health Care Risk Management: Organization and Claims Administration

Hospitals, Health and People

Hospital Turnarounds: Lessons in Leadership

Legal Aspects of Health Care Reimbursement

Long-Term Care in Transition: The Regulation of Nursing Homes

Partners: Forming Strategic Alliances in Health Care 

The White Labyrinth: Guide to the Health Care System

Health care is a highly dynamic and changing industry. While the hospital still occupies a major position in the system, more specialized organizations have increased significantly in number and importance, such as health maintenance organizations, clinics, long-term care institutions, laboratories, and outpatient units such as surgicenters. This probing and incisive book aims to educate administrators to relate not only to the environment of their particular organization, but to others that have both direct and indirect relationships. Changes in governmental regulations and societal changes are reviewed in detail, with a view to showing their impact on the industry. Managerial issues and functions covering a panoply of major responsibilities form the core of the book.

From the back cover blurb:

... In outlining their strategies, the authors have boldly selected the approaches that they felt would be most helpful to managers in improving their performance. However, they never lose sight that the overriding mission is to provide access to high quality health care while containing the costs.

From Henry Berry,
Nightingale's Healthcare News, July-Aug. 15, 2007

The modern hospital is an intricate web of relationships, interests, responsibilities, and goals. For a hospital to operate effectively, its senior managers must be adept at balancing all of these parts. High-level hospital administrators have always had to attend to internal factors such as staffing, facilities, and patient care, but in recent decades with the growth of the population and its increased diversity, external factors have come to be a part in the operations and position of hospitals. Among these external factors are government regulations, community relations, and policies and goals of HMOs and other corporate healthcare organizations.

Because of these external factors, the role of the hospital CEO is now "best described as that of chief strategist," says Rockwell Schulz and Alton Johnson co-authors of Management of Hospitals and Health Services -- Strategic Issues and Performance.

While hospital CEOS remain the final decisionmakers, the main work of the CEO -- and the work that requires the greatest skill -- is being attuned to and providing for the interests of physicians, employees, unions, patients, community leaders, and trustees. These diverse interest groups often have competing objectives, which puts pressure on the smooth operation of a hospital. The ongoing challenge of hospital administrators is to navigate a way through the straits of such competing interests.

As Schulz and Johnson describe it, this is accomplished by "creating the general culture or ambiance of the organization, negotiating and resolving conflicts with major stakeholder groups and developing the forward or strategic plan." Most hospital administrators agree that their objective is "to efficiently improve patient outcomes and community health and to provide access to high quality health care for those in need." These universal objectives can be compromised or even abandoned, however, by "inverting ends and means of the organization [or] managing symbolically rather than to achieve outcomes." Examples of means "inverting" ends include an obsessive concern over career advancement, which results in employees spending an inordinate time on networking and creating contacts outside of one's area of responsibility. It also results in managers having a myopic focus on management itself rather than outcomes or progress.

The irrelevance of such behavior to patient care and stakeholders' interests is apparent. Holding pointless meetings, endlessly collecting data, and reflexively forming committees are all indicative of "symbolic management" in lieu of providing leadership and substantively addressing issues.

Schulz and Johnson set different ends for the hospital administrator -- offering optimal patient care, maintaining an appealing work environment, and creating a good reputation that is necessary to attract physicians and inspire the community's confidence in the hospital.

The different paths that must be pursued in tandem comprise the five main parts of the text. These parts address the broad social and economic environment a hospital has to work in; the elements of strategic management applicable to hospital operations; specific health service organization issues, especially pertaining to doctors and nurses; group dynamics, quality control, human resources, relationships with unions, and other pragmatic, day-to-day management issues; and lastly, future challenges and ethics.

Two codes of ethics for CEOs and other top executives, as well as for managers, consultants, and similar health industry professionals are also reproduced in this book. These codes of conduct emphasize guidelines for ethical standards in pursuing the primary end of fine patient care - the achievement of which necessarily involves good community relations and good working relationships between the various interest groups and between employees and upper-level administrators and managers. The first code is "Statement on Ethical Conduct for Health Care Institutions," developed by the American Hospital Association Advisory Committee on Biomedical Ethics as a model for all hospitals and healthcare organizations. The other code is the "American College of Healthcare Executives Code of Ethics." Together these codes of ethics cover the two primary areas of responsibility for an upper-level healthcare organization executive or manager -- namely, the operating standards of the hospital and the standards of behavior of the top, most visible, and most representative employees. The ethical standards of the top employees are particularly important because they serve as standards for all of an organization's employees. Such ethical standards are also essential in creating an organization's "culture or ambiance" within which all operations take place and relationships develop and where external and internal factors come together positively or problematically for the healthcare organization. A comprehensive, relevant code of ethics is not only a pronouncement of ethical standards to staff members, employees, and members of the surrounding community, but is also tells the administrator and his associates what to focus on and what should guide the central activity of an organization.

Hospital administrators, managers, and others who desire to bring people and institutions together in a way that is responsive to the "human need" of the enjoyment of good health will find Schulz's and Johnson's work, first published in 1990, instructive.

Rockwell Schulz is the founder and former director the Health Services Administration program of the University of Wisconsin's Medical School. Before this, he was a hospital administrator and was associated with the medical schools at Tulane and Texas universities. Alton C. Johnson (d. 1998) was chairman of the Management Department at the University of Wisconsin.

From David L. Everhart, President Emeritus
Northwestern Memorial Hospital, Chicago

"It is a provocative and useful compendium of ideas and historic perspectives that are current and applicable. It is a worthy contribution to the health care literature."

Rockwell Schulz is Professor Emeritus at the University of Wisconsin Medical School, where he founded and directed the programs in Health Services Administration. He received a Masters in Hospital Administration from the University of Minnesota and a Ph.D. from the University of Wisconsin. Before his academic career, he served as a hospital administrator and as Assistant and Associate Dean at Tulane University Medical School and the University of Texas Medical School.

Alton C. Johnson also received his Ph.D. from the University of Wisconsin, where he served as Chairman of the Management Department. He had numerous publications in management and health services. He was an Earhardt Foundation Fellow and research grantee of the Ford Foundation. He died in 1998.

1. The Growing Importance of Management to Institutional, Patient, and Community Health 3
Stages in health services management 4
Public health period: into the 1920s 4
Physician period: 1930s into 1960s 5
Hospital period: 1960s into 1990s 6
Framework for a strategic management role to improve patient outcomes and community health 9
Conclusions 15
2. Health and the Health System 17
Inputs to health 17
The health system 21
Personal health care system 25
Physician services 27
Hospital services 31
Conclusions 32
3. Environmental Pressures from Cost Controls and Consolidation 35
Are health care costs too high? 35
Why are costs rising? 36
Who pays and how do they try to control costs and quality? 36
How are physicians paid? 38
How are hospitals paid? 40
How do payers control costs and quality of care? 41
Future prospects for cost controls 46
Implications of cost control on management of health services 46
Consolidation of health services 47
Investor-owned health systems 49
Are horizontal, vertical, and for-profit consolidation beneficial? 51
Implications of consolidation on management of health services 51
4. Strategic Management Defined 57
The concept of ultrastable equilibrium 58
The strategic management process 60
The major components of the strategic management process 61
The role of the strategic manager 63
Competencies 64
Summary 67
5. Strategy Formulation 68
Determining the mission, goals and objectives 69
Social responsibility 72
Competitive position 73
The SWOT analysis 75
Strategies 76
The strategy plan 76
Grand strategies 76
Summary 81
6. Implementation Processes 83
Change 83
Management initiatives/styles 87
Training 95
Structure 96
Resource deployment 97
Policies 99
Culture 101
Summary 104
7. Changing the Roles of the Chief Executive Officer with Special Emphasis on the Evaluation/Control Processes  106
Role models -- an overview 107
Roles/processes 110
Monitoring/evaluating/controlling 117
Conclusions 125
8. Organizational Arrangements of Health Services Delivery Systems 129
Health service functions and the patient care systems 133
Organizational design 136
Joint ventures 140
Conclusions 140
9. Governance of Health Services Organizations 142
Functions of governing boards 142
Structural characteristics of a governing board 143
Who really controls hospitals and health services? 149
Hospital performance seems to relate to accountability 150
How does consumerism relate to governance? 151
Board decision processes 153
Conclusions 154
10. Physicians 157
Barriers to physician/management relationships 158
Who are physicians? 159
Who become physicians? 159
What is the conditioning process of medical education? 160
The physician surplus 161
Organized medicine 162
Hospital medical staff organization 164
Corporate integration of physician services 165
Management and physicians 168
11. Nursing 177
Nursing in transition 177
Issues in nursing 182
Implications for management 187
12. Other Health Professionals and Programs 193
Other health professionals 193
Management of professional services to patients 203
13. Functional Managers 208
Functional managers 210
Computer systems -- medical and management information systems -- decision support systems 214
Marketing 216
Planning 219
Human resources management 220
Materials management 221
Risk management 222
Public relations and volunteer services 225
Consultants 226
Management contracts 227
Factors that might improve effectiveness of functional specialists 227
Conclusions 229
14. Management of Access: an Epidemiological Approach to Marketing 231
Marketing and demarketing health services 232
An epidemiological approach to marketing 233
Marketing 233
Epidemiology 238
Managing access to care: balancing community and institutional health needs 241
15. Management of Quality and Costs 245
Forces for more attention to quality 248
Approaches to evaluating quality of care 248
Methods for managing quality of physicians' services 250
Management of quality or cost? 253
The bottom line and the rational manager 255
16.  The Management of Human Resources 261
The nature of the human resources function 262
Management's human resources tools 271
Summary 278
17. Managing Conflict and Labor Management Relations 280
The nature of conflict 281
Individual conflict 281
Interpersonal conflict 281
Group conflict 282
The status factor 283
Client/Organization conflict 283
Mitigation of conflict 284
Win/win strategies 285
Action program for mitigation of conflict 285
Participative management 287
Managerial/organizational stress 287
Collective bargaining 289
Changing philosophies regarding unions 289
Employees, managers and unions 291
Collective bargaining process 293
Contract administration 295
Summary 299


18. Managerial Performance and Ethics for Hospitals and Health Services Into the Twenty-first Century 305
Organization and management strategies for meeting future challenges to management 306
Diseases of health services management 308
Management of organizational decline 309
An ethical framework for health services management 310
Personal approaches to management 319

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