Review: Healthcare leaders must simplify administrative structures

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For today's “complex, highly technical and system-based” practice of medicine, a noncomplex administrative structure in healthcare offers many advantages for healthcare systems, according to an article published in the May edition of the Journal of the American College of Radiology.

Lead author Lane F. Donnelly, MD, from the department of radiology at Cincinnati Children's Hospital Medical Center, and James M. Anderson, Esq, CEO of Cincinnati Children's, wrote: “The current administrative structures of most U.S. (and international) academic medical centers have multiple, often independent parts that must negotiate and come to agreement on any new changes…. In a simplified, integrated structure, strategic goals and cultural changes can be more easily executed across the organization.”

They explained that the administrative structure at Cincinnati Children's—a tertiary-care hospital with more than 12,000 employees and an annual budget of $1.6 billion—is different from and simpler than that of many same-sized institutions. The CEO is charged with overall responsibility for all medical center functions to whom all organizational employees report and the actions of the CEO are overseen by the board of trustees.

“The CEO leads a senior executive cabinet that includes medical, surgical, research, nursing, quality, finance and business leaders, so that strategy can be set and decisions made in a coordinated, cooperative manner,” wrote Donnelly and Anderson. In addition, any proposed changes are debated and propagated through one system.

The article noted that although the administrative simplicity took “decades to achieve,” it has increased the “nimbleness” and “teamwork” of the institution. “We believe administrative simplicity has been a key component in our ability to change and improve the delivery of healthcare to the children we serve,” wrote Donnelly and Anderson. “This structure has enabled us to make progress in quality improvement and patient safety.”

While Donnelly and Anderson noted that many articles point to common language and effective communication as reasons why there are issues between physicians and hospital managers, the article suggested that this current problem is “exacerbated by the fragmented administrative structures that have evolved in most medical systems, characterized by administrative silos for physician and hospital services,” as the visions of these two groups can conflict if they are not aligned.

The article said that while the traditional, multipart administrative model can be effective for decision-making, it can potentially take longer.  “In the process of negotiating agreements among the stakeholders, the initial intent may be compromised or the opportunity lost,” they wrote.

“If you were going to design an optimal administrative structure to deliver healthcare, you would never reproduce the multipart structures of most university hospitals today,” concluded the article. “Although removing historic administrative structures is difficult, we encourage healthcare leaders to consider ways to simplify their administrative structures when such opportunities arise.”