The multilayered nature of healthcare makes healthcare delivery intrinsically complex. It is vast, with multiple facets and approaches. Healthcare ranges from preventive medicine and health promotion to curative care, palliative care and end-of-life care and services. It encompasses all services rendered to promote and maintain good health.
In a nutshell, it’s everything done for the patient, even services that are not typically considered medical. The practical and coordinated delivery of quality health care services requires organized systems referred to as healthcare systems.
Healthcare systems are the means to achieving the global health goal for all. With a next-to-zero margin for errors, healthcare systems require effective administration. One of the primary ways healthcare systems differ is whether they are public or private. This article will explore these differences and examine how health administrators can effectively manage resources, finances and patient care.
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What Are Healthcare Systems?
There are several definitions for what healthcare systems entail, with many authors trying to capture the essence in as few words as possible. A broad perspective provided by the World Health Organization describes the healthcare system as the coordination of people, resources and institutions to deliver quality services to meet the health needs of their clientele.
In a rather all-encompassing view, it includes everyone from the clinicians and professionals who provide the medical services to the health administrators who keep the institution running smoothly. The primary purpose is to promote, restore and maintain health.
The delivery of healthcare services needs to be strategic and systematic to ensure the proper allocation of limited resources. Several classifications and models of health systems are adopted worldwide, with multiple models co-existing within a particular country.
Basic healthcare designs such as the Bismarck, Beveridge, national health insurance model and out-of-pocket model are classifications based on the funding source of the healthcare system. Another way to group healthcare systems is based on the category of services delivered: primary, secondary and tertiary healthcare systems.
In this article, we will focus on classifying healthcare systems based on ownership. Here, they are classified into private and public healthcare systems. It is not unusual to see both systems co-exist and even thrive in a given economy. In fact, there are instances of collaboration and joint ownership referred to as private-public partnerships.
Private Healthcare System
Private healthcare refers to healthcare organizations owned and controlled by individuals, private companies or groups of individuals. In general, they are healthcare systems not owned by the government. They include for-profit health enterprises, which a single entrepreneur or conglomerates can own, and non-profit healthcare systems owned by religious bodies, charities and non-government organizations.
The private healthcare sector is a popular healthcare system, especially in developed economies.
Some countries, especially capitalist-based economies, have most of their healthcare delivery provided by private companies. In such countries, it is commonplace to see conglomerates in the healthcare business with the market forces determining the price and service delivery.
Public Healthcare Systems
Public healthcare systems are government-owned and managed healthcare systems. As with everything publicly owned, the public healthcare system is funded by taxpayer money and controlled by the government. However, the institution might be augmented with resources allocated from the government budget and subsidized fees paid by citizens for healthcare. The United Kingdom is an example of where the public healthcare system is used by the majority.
What Are The Key Differences Between Private And Public Healthcare Systems?
While the numerous benefits of private healthcare systems cannot be overlooked, there is a strong case for public health systems. The healthcare system adopted by a nation goes a long way in determining health, and a healthy nation is a wealthy nation.
A country’s health indices have far-reaching consequences on the economy and growth of the nation, so there is a need to find a balance that guarantees a healthy citizenry when adopting a national healthcare system. A common practice around the globe is for both systems to coexist, with the individual’s economic status determining the services they utilize.
A hybrid system involving a collaboration between the public and private health systems has also gained much acceptance in recent years. Although both private and public systems share the same goal of delivering quality healthcare across the board, there are key differences in the operations of both systems. Let’s examine the overlaps and similarities:
The End Goal
Whether private or public, the end game of any healthcare system is to promote and maintain the health of its clientele. In this regard, both healthcare systems are the same; they strive to deliver quality healthcare services to patients. Their mission is to holistically promote the patient’s well-being physically, mentally and socially.
The Staffing And Organizational Framework
Another similarity is the organizational framework in both healthcare sectors. Whether private or public, the core framework of human resources remains the same. The clinical services involve professionals such as doctors, nurses, dieticians, physiotherapists and pharmacists, among others providing healthcare.
The administrative end involves the hospital administrator, accountants, client services and human resources.
The Service
The range of care provided is another area of overlap. Whether private or public, the services are the same. With services ranging from medical care, surgical care, diagnostics and hospice care to mention a few.
Despite these similarities, both systems adopt different approaches in achieving their end goals. Below are some of the key differences between private and public healthcare systems:
Ownership and Control
Ownership and control are the most fundamental differences between the private and public healthcare sectors. The government owns and controls the public healthcare sector through its agencies, and administrators act in proxy, while the private healthcare sector is non-governmental. Individuals, groups, religious organizations or charities can own private healthcare entities.
Affordability
As government-owned institutions are not specifically geared to make a profit but instead operate on a socialist agenda, the services are often subsidized. This translates to cheaper services for the client than the private sector.
The healthcare sector is not exempt from this rule. The public healthcare system is, for this reason, more affordable and makes healthcare accessible for the low and middle-class populace, the uninsured and underserved communities. On the other hand, private healthcare systems and even non-profits cannot afford to subsidize as much, so they tend to be more expensive.
Funding
Healthcare delivery is very capital-intensive. Quality healthcare is not cheap, whether aimed at preventing diseases and health promotion, curative care or palliative care. The money to keep the lights on must come from somewhere, and the two healthcare systems differ in this regard.
The private sector is run as a separate entity, so funds are generated like capital for any other business. This could include loans, personal funds, plowed-back profits and investors. Government earnings sponsor the public healthcare system, so the funds come from taxes and internally generated state revenue and are accounted for in the budgetary allocations.
This difference accounts for the seeming lack of funds in the public healthcare sector compared to the private sector. While the private healthcare system has many sources to draw from with assurance of making such capital back in income, their government-owned counterparts do not have the same luxury.
Quality of Care
A point of frequent controversy, there have been debates as to why the quality of services differ between the two healthcare systems. One reason can be traced to the funding, the budgetary allocations are barely enough in many instances to achieve the barest minimum, and the amount paid for care by the clientele is mainly subsidized, so the public healthcare sector is almost always strapped for cash.
The consequence is a drought of state-of-the-art equipment compared to their private counterparts.
Another difference is in the waiting periods in public facilities. Due to the cheaper cost, the government facilities tend to be overcrowded, leading to a more significant burden on facilities and longer waiting times.
All these factors significantly reduce the quality of care in the public healthcare system. Although this is not the rule, this is usually the case.
Efficiency and Management
Another core area where the two healthcare systems differ is the administration and, by extension, the efficacy. The public healthcare system has a different approach to financing, resource allocation and staffing than the private sector. At the forefront of every decision is maximizing profit with the least resources for the private sector. This value is reflected in the administrative approach and is proven to reduce waste and promote efficiency.
More resources are allocated to areas expected to yield more returns in the private sector. However, this might be counterproductive regarding healthcare for people with rare or uncommon conditions. In contrast, the public sector approach diverts more aid to where it serves the greater good or a higher number of people.
This fundamental difference in management styles affects the decision-making and administration in both sectors.
What is Health Administration?
Health administration is a broad term that describes the management role in the healthcare sector. It refers to the role of managers beyond the walls of the hospitals to include every area of healthcare service delivery from hospices, nursing homes, medical offices, clinics and insurance companies.
The US Bureau of Labor Statistics projects an increase in healthcare jobs compared to other sectors between 2021-2031. Many of these roles will be outside core clinical roles and more aligned with management roles. A manager must plan, implement and evaluate strategies to improve services, in this case, healthcare delivery, and ensure the smooth running of the organization.
Skillset Of A Health Administrator
A health administrator’s role in healthcare systems cannot be emphasized nearly enough. The ability of a health administrator to perform their duties with the utmost efficacy depends on their skill set. A health administrator should have the necessary technical knowledge and the soft skills to apply such knowledge. These skills include:
Effective Communication And Relationship Management Abilities
Maintaining good relationships either at work or personally is hinged on effective communication. The health administrator needs to apply that skillset in the day-to-day workings of their job. They need to relate with people from patients and their caregivers to staff, other managers, community leaders and vendors.
The ability to present ideas, thoughts and instructions clearly and precisely in a way that is understood by the team and client alike is necessary for the health administrator. They should be able to interpret the organization’s goals and strategic action plans to all members of staff. Effective communication is not limited to speaking alone, it also includes writing and listening.
Leadership Skills
A good leader inspires positive change, while a boss gives orders. The complexity of the healthcare sector makes good leadership even more crucial. A leader should be able to take charge and take responsibility.
Leadership involves making hard decisions for the greater good. The health administrator must make tough calls and assume leadership in discharging their duties. Leadership skills are a must-have for a good health administrator.
Technical Know-How
A good administrator must be well-versed in healthcare legislation. It’s not enough to have a general knowledge of health regulations, bills and laws like everyone else. They are required to have a good grasp of the rules.
As industry leaders, they are expected to be at the forefront of innovation in healthcare. Working knowledge of the latest technological advancements and medical facilities is a job requirement for them.
Business Acumen
Healthcare delivery is a business, and the administrator should have a sound knowledge of the business side of healthcare. Beyond patient care, the operational and strategic aspects should be given equal attention. Business acumen refers to the ability to understand and apply business principles and practices in the context of an organization. In healthcare administration, business acumen is essential to ensure the effective and efficient delivery of healthcare services.
Education
Having the right qualifications is non-negotiable in managerial roles. Being in the healthcare sector for numerous years in other posts is not a substitute for formal education. So when enrolling in an Executive Master in Health Administration program, such as the one at The Telfer School of Management at the University of Ottawa, you will learn what is health administration and the skills and responsibilities that make it a vitally important role in the healthcare industry.
How Do Health Administrators Approach Management In Healthcare Systems
The approach to health administration in healthcare systems, private or public, involves specific roles and responsibilities. The roles and responsibilities of the health administrator in the healthcare system include finances, resource allocation, patient care management, staffing and other oversight roles.
Finances and Budgeting
The success of any organization is dependent on the proper allocation of resources. The healthcare industry is no different. The role of the administrator includes financial planning. It is figuring out how to allocate scarce resources with the best possible outcome effectively. Budgeting also falls under the purview of the health administrator. In the public sector, more resources are allocated to services that will do the most benefit for the majority of people. In the private sector, profitable ventures are prioritized.
Planning
The central role of a manager is planning. At every managerial level, there is the need to plan, set goals and targets for the organization and make plans towards achieving them. The health administrator is a manager; they are duty-bound to set targets and map out plans to achieve them. In the private sector, their plans are subject to the veto of shareholders, board members or individuals, as the case may be. On the other hand, public institutions can exercise some independence as they are usually established by law.
Human Resources and Client Services
The team is the backbone of any organization, even more so in a service-based industry. The administrative staff is responsible for the staffing of the healthcare system. Their role is to ensure adequate staffing and recruitment of frontline workers. Hiring in the private sector is usually done in-house, with the HR team having the authority to recruit and manage personnel. On the other hand, in the public sector, personnel are hired as public servants through the body in charge of such recruitment in the country.
Community Outreaches and Collaboration
Healthcare systems should have a close-knit relationship with the community they serve. One way to achieve this is through collaborations and community projects. Sponsorship of community projects and outreaches are just two ways that private sector healthcare organizations foster mutually beneficial relationships with the community. The healthcare administrator is at the forefront of bolstering such collaboration. They facilitate community outreaches and promote healthy habits in society.
Health administrators in the public sector, however, might not invest so much in this regard as they are usually already recognized as a part of the community.
Conclusion
Healthcare delivery is a complex and multifaceted system that requires effective administration to ensure the delivery of quality healthcare services. Health administrators play a critical role in managing the day-to-day operations and the strategic planning and implementation of healthcare services. To succeed in this role, administrators need to have a strong understanding of both the clinical and business aspects of healthcare and the ability to navigate the challenges and opportunities presented by the healthcare industry. Health administrators are essential to the successful running of any healthcare system, whether public or private. A seasoned administrator with sound knowledge can easily navigate the healthcare system’s pitfalls and capitalize on the gains.
