What is the business side of health care?

People often think of health care strictly in terms of the practitioners—doctors, nurses, therapists, lab technicians, etc., who all work together to help people maintain or regain their health.

But health care is a business—and one that needs careful management to continue achieving its health-related mission. Kim Miller, MBA, FACHE, a member of Capella’s School of Business & Technology Advisory Board, knows this from first-hand experience. With a background as a registered nurse, Miller later earned her bachelor’s and master’s degrees in business and health care administration, served for 20 years as a hospital CEO, and is certified in health care administration as a fellow in the American College of Healthcare Executives. She recently spent time talking about the business side of health care and why it’s important.

What is the business side of health care?

There are two sides to health care organizations: the patient side, which is always the primary focus, and the provider/health care organization side. The latter is very complex and often misunderstood. In my view, it’s as important as the patient side. The business side monitors the bottom line, which needs to be positive in order to invest in equipment, technology, software, and competitive staff compensation. The bottom line directly affects the quality of patient care and the cost of services.

What kinds of decisions do health care business administrators make?

Health care administrators need to take a big-picture approach to decision-making. For example, at a hospital I worked for, we looked at purchasing a robot to handle advanced patient procedures. The cost of the robot was over $2 million. To analyze if this was a good decision, the business side must consider: Is it adding value? Will it improve the care for the patient? Is it going to add a service we could not provide before? What are other potential solutions to accomplish the same outcome at a lower cost? What are the liabilities? What is the effect on patient cost?

Administrators also must consider how much to invest in their employees. I think this is one of the most important decisions they’ll make for many reasons, not the least of which is staff retention. Paying competitive wages, supporting continuing education, and creating workable schedules are just a few of the considerations a health care administrator must handle.

What health care innovations do you want to see implemented in the future?

The holistic cycle of care may help us achieve the best outcomes for health care and patient care. I think we need to integrate Eastern and Western medicine and ensure we’re looking at patients’ physical, emotional, and spiritual needs. That’s not to say we don’t need medications and procedures. However, alternative options like acupuncture, massage therapy, and meditation, when incorporated into a health regime, may lead to best outcomes. Of course, every patient’s needs will vary. But we need to care for the body and the mind.

I am also very excited about the potential of artificial intelligence (AI) and technology to improve patient health. Wearable devices, such as continuous blood glucose monitors for diabetics, are affordable innovations that can give us a deeper understanding of what triggers blood sugar changes and can allow for faster intervention. Another example is the wearable EKG that helps us identify heart-related irregularities before major problems arise. In addition, the use of e-visits, also known as virtual care, will further revolutionize the delivery of ambulatory services as well as the management of chronic diseases.

Do you have any recommendations for people interested in entering the business side of health care?

Look for mentors. Talk to people with background in the area you’re interested in pursuing. Also, shadow people who are doing the work you want to do, so you can see what’s involved. If you’re not coming to the business from the caregiving side, learn as much as you can about the clinical side so you can see the whole picture.

Continuing education is also important. Consider adding advanced degrees and certifications which will keep you current on what’s happening within the field. Health care changes constantly, and it’s critical to stay up to date.

Learn more about Capella University’s online health administration degrees.