The health care industry had posted the highest recorded profits last year. Two things could be drawn from this record-high achievement: 1.) Health care leadership had been so effective that their management strategies had paid off and 2.)
Health care leadership had focused more on prioritizing income-generating schemes that boosted the record-high profits.
Soaring prices are the driving force behind recent transformations in the health care system. Annual increases in the cost of health care over the past three decades have been nearly triple that of inflation overall.
Although those trends have tapered in recent years, America’s health care system remains expensive by international standards. Spending on health care in 2004 comprised more than 16% of the U.S.’s gross domestic product (GDP), a higher proportion than any other industrialized nation (NCHC Website).
This is quite alarming since the GDP measures the total output of goods and services produced within the borders of the U.S.
According to Goldstein (September 2006), in order for health care management leaders to be successful, they must learn establish strong credibility, which is the underlying driver of many of these characteristics. Credibility can be established through a variety of venues.
Certainly a demonstrated track record of meeting budgets, effective implementation of well-articulated strategies, timely response to challenges, and ability to produce consistent, reliable, and predictable operating performance are the foundations for credibility. A management team also builds credibility with timely disclosure of favorable and unfavorable events.
It is clear that there is a leadership crisis in health care. The crisis extends from the level of values and ethics to the politics and practices of individual institutions. This critique is not intended to blame the current leaders in health care.
However, the changes in health care need to be examined thoroughly to ease out the leadership challenges and require the industry to redouble its efforts to build leadership capacities for the future. The health care leadership should not focus on gaining profits for the industry; rather it should re-engineer all its efforts to improve the quality of its services and to make it available and affordable for everyone.
Goldstein, L. (2006, September). Assessing Management and Leadership in the Hospital Industry: What Does Your Hospital’s Credit Rating Say about Your Management? Healthcare Financial Management 60(9): 136-137.
NCHC. (2006). Facts About Healthcare. Acquired online 13 October 2006 at www.nchc.org/facts/cost.shtml.