Health Services Managers




Significant Points

  • Earnings of health services managers are high, but long work hours are common.
  • Employment will grow fastest in home health agencies, residential care facilities, and practitioners’ offices and clinics.
Nature of the Work [About this section] Index

Health care is a business and like every other business, it needs good management to keep it running smoothly, especially during times of change. The term "health services manager" encompasses individuals who plan, direct, coordinate, and supervise the delivery of health care. Health services managers include generalists and specialists. Generalists manage or help to manage an entire facility or system, while specialists are in charge of specific clinical departments or services.

The structure and financing of health care is changing rapidly. Future health services managers must be prepared to deal with evolving integrated health care delivery systems, restructuring of work, technological innovations, and an increased focus on preventive care. They will be called upon to improve efficiency in health care facilities and the quality of the health care provided. Increasingly, health services managers work in organizations in which they must optimize efficiency of a variety of interrelated services, ranging from inpatient care to outpatient follow-up care, for example.

Large facilities usually have several assistant administrators to aid the top administrator and to handle daily decisions. They may direct activities in clinical areas such as nursing, surgery, therapy, medical records or health information; or in nonhealth areas such as finance, housekeeping, human resources, and information management. (Because the nonhealth departments are not directly related to health care, these managers are not included in this statement. For information about them, see the statements on managerial occupations elsewhere in the Handbook).

In smaller facilities, top administrators handle more of the details of daily operations. For example, many nursing home administrators manage personnel, finance, facility operations, and admissions, and have a larger role in resident care.

Clinical managers have more specific responsibilities than generalists, and have training and/or experience in a specific clinical area. For example, directors of physical therapy are experienced physical therapists, and most health information and medical record administrators have a bachelor’s degree in health information or medical record administration. These managers establish and implement policies, objectives, and procedures for their departments; evaluate personnel and work; develop reports and budgets; and coordinate activities with other managers.

In group practices, managers work closely with physicians. Whereas an office manager may handle business affairs in small medical groups, leaving policy decisions to the physicians themselves, larger groups usually employ a full-time administrator to advise on business strategies and coordinate day-to-day business.

A small group of 10 or 15 physicians might employ one administrator to oversee personnel matters, billing and collection, budgeting, planning, equipment outlays, and patient flow. A large practice of 40 or 50 physicians may have a chief administrator and several assistants, each responsible for different areas.

Health services managers in health maintenance organizations (HMOs) and other managed care settings perform functions similar to those in large group practices, except their staffs may be larger. In addition, they may do more work in the areas of community outreach and preventive care than managers of a group practice. The size of the administrative staff in HMOs varies according to the size and type of HMO.

Some health services managers oversee the activities of a number of facilities in health systems. Such systems may contain both inpatient and outpatient facilities and offer a wide range of patient services.

Working Conditions [About this section]  Index

Most health services managers work long hours. Facilities such as nursing homes and hospitals operate around the clock, and administrators and managers may be called at all hours to deal with problems. They may also travel to attend meetings or inspect satellite facilities.

Employment [About this section]  Index

Health services managers held about 222,000 jobs in 1998. Almost one-half of all jobs were in hospitals. About 1 in 4 were in nursing and personal care facilities or offices and clinics of physicians. The remainder worked mostly in home health agencies, ambulatory facilities run by state and local governments, offices of dentists and other health practitioners, medical and dental laboratories, residential care facilities, and other social service agencies.

Training, Other Qualifications, and Advancement [About this section]   Index

Health services managers must be familiar with management principles and practices. A master’s degree in health services administration, long-term care administration, health sciences, public health, public administration, or business administration is the standard credential for most generalist positions in this field. However, a bachelor’s degree is adequate for some entry-level positions in smaller facilities and for some entry-level positions at the departmental level within health care organizations. Physicians’ offices and some other facilities may substitute on-the-job experience for formal education.

For clinical department heads, a degree in the appropriate field and work experience may be sufficient for entry, but a master’s degree in health services administration or a related field may be required to advance. For example, nursing service administrators are usually chosen from among supervisory registered nurses with administrative abilities and a graduate degree in nursing or health services administration.

Bachelor’s, master’s, and doctoral degree programs in health administration are offered by colleges, universities, and schools of public health, medicine, allied health, public administration, and business administration. In 1999, 67 schools had accredited programs leading to the master’s degree in health services administration, according to the Accrediting Commission on Education for Health Services Administration.

Some graduate programs seek students with undergraduate degrees in business or health administration; however, many graduate programs prefer students with a liberal arts or health profession background. Candidates with previous work experience in health care may also have an advantage. Competition for entry to these programs is keen, and applicants need above-average grades to gain admission.

These programs usually last between 2 and 3 years. They may include up to 1 year of supervised administrative experience, and course work in areas such as hospital organization and management, marketing, accounting and budgeting, human resources administration, strategic planning, health economics, and health information systems. Some programs allow students to specialize in one type of facility—hospitals; nursing homes; mental health facilities; HMOs; or medical groups. Other programs encourage a generalist approach to health administration education.

New graduates with master’s degrees in health services administration may start as department managers or in staff positions. The level of the starting position varies with the experience of the applicant and size of the organization. Hospitals and other health facilities offer postgraduate residencies and fellowships, which usually are staff positions. Graduates from master’s degree programs also take jobs in HMOs, large group medical practices, clinics, mental health facilities, multifacility nursing home corporations, and consulting firms.

Graduates with bachelor’s degrees in health administration usually begin as administrative assistants or assistant department heads in larger hospitals, or as department heads or assistant administrators in small hospitals or nursing homes.

All States and the District of Columbia require nursing home administrators to have a bachelor’s degree, pass a licensing examination, complete a State-approved training program, and pursue continuing education. A license is not required in other areas of health services management.

Health services managers are often responsible for millions of dollars of facilities and equipment and hundreds of employees. To make effective decisions, they need to be open to different opinions and good at analyzing contradictory information. They must understand finance and information systems, and be able to interpret data. Motivating others to implement their decisions requires strong leadership abilities. Tact, diplomacy, flexibility, and communication skills are essential because health services managers spend most of their time interacting with others.

Health services managers advance by moving into more responsible and higher paying positions, such as assistant or associate administrator, or by moving to larger facilities.

Job Outlook [About this section]  Index

Employment of health services managers is expected to grow faster than the average for all occupations through 2008 as health services continue to expand and diversify. Opportunities for health services managers should be closely related to growth in the industry in which they are employed. Opportunities will be especially good in home health care, long-term care, and nontraditional health organizations, such as managed care operations and consulting firms—particularly for health services managers with work experience in the health care field and strong business and management skills.

Hospitals will continue to employ the most managers, although the number of jobs will grow slowly compared to other areas. As hospitals continue to consolidate, centralize, and diversify functions, competition will increase at all job levels.

Employment will grow the fastest in home health agencies, residential care facilities, and practitioners’ offices and clinics. Many services previously provided in hospitals will be shifted to these sectors, especially as medical technologies improve. Demand in medical group practice management will grow as medical group practices become larger and more complex. Health services managers will need to deal with the pressures of cost containment and financial accountability, as well as the increased focus on preventive care. They will also become more involved in trying to improve the health of their communities.

Health services managers will also be employed by health care management companies who provide management services to hospitals and other organizations, as well as specific departments such as emergency, information management systems, managed care contract negotiations, and physician recruiting.

Earnings [About this section]  Index

Median annual earnings of medical and health service managers were $48,870 in 1998. The middle 50 percent earned between $37,900 and $71,580 a year. The lowest 10 percent earned less than $28,600 and the highest 10 percent earned more than $88,730 a year. Median annual earnings in the industries employing the largest number of medical and health service managers in 1997 were as follows:

Hospitals $52,600
Home health care services 45,800
Health and allied services, not elsewhere classified 44,700
Nursing and personal care facilities 43,600
Offices and clinics of medical doctors  39,600

Earnings of health services managers vary by type and size of the facility, as well as by level of responsibility. For example, the Medical Group Management Association reported that the median salary in 1998 for administrators by group practice size was: fewer than 7 physicians, $60,000; 7 to 25 physicians, $76,700; and more than 26 physicians, $124,500.

According to a survey by Modern Healthcare magazine, median annual compensation in 1998 for managers of the following clinical departments was: Respiratory therapy, $57,700; home health care, $62,400; ambulatory and outpatient services, $66,200, radiology, $66,800; clinical laboratory, $66,900; physical therapy, $68,100; rehabilitation services, $73,400; and nursing services, $100,200. Salaries also varied according to size of facility and geographic region.

According to the Buck Survey conducted by the American Health Care Association in 1997, nursing home administrators’ median annual earnings were $52,800. The middle 50 percent earned between $44,300 and $60,300 a year. Assistant administrators had median annual earnings of about $35,000, with the middle 50 percent earning between $28,700 and $41,200.

Related Occupations [About this section]  Index

Health services managers have training or experience in both health and management. Other occupations requiring knowledge of both fields are public health directors, social welfare administrators, directors of voluntary health agencies and health professional associations, and underwriters in health insurance companies.

Sources of Additional Information [About this section]  Index

Disclaimer: Links to other Internet sites are provided for your convenience and do not constitute an endorsement.

General information about health administration is available from:

  • American College of Healthcare Executives, One North Franklin St., Suite 1700, Chicago, IL 60606. Internet:

Information about undergraduate and graduate academic programs in this field is available from:

  • Association of University Programs in Health Administration, 730 11th St., NW., Washington, DC 20001-4510. Internet:

For a list of accredited graduate programs in health services administration, contact:

  • Accrediting Commission on Education for Health Services Administration, 730 11th St., NW., Washington, DC 20001-4510.

For information about career opportunities in long-term care administration, contact:

  • American College of Health Care Administrators, 325 S. Patrick St., Alexandria, VA 22314.

For information about career opportunities in medical group practices and ambulatory care management, contact:

  • Medical Group Management Association, 104 Inverness Terrace East, Englewood, CO 80112.

For information about health care office managers, contact:

  • Professional Association of Health Care Office Managers, 461 East Ten Mile Rd., Pensacola, FL 32534-9712. Internet:
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