Healthcare Leadership Challenges
Preparing for the next generation of healthcare
Today at $3.35 trillion, the healthcare industry represents 18% of the US GDP. As baby boomers age and the demand for healthcare increases, the industry is poised to grow rapidly. Experts predict that healthcare costs and expenses will outpace inflation. The Bureau of Labor Statistics predicts that the industry will add 2.3 million new jobs by 2026.
This increase in costs and job growth will not be easy to manage. There will be an expanding need for competent healthcare managers to lead growing teams and facilities. With changing technology and political uncertainty, healthcare leaders have to overcome several challenges. Here are the Top 5 challenges healthcare leaders need to navigate.
Challenge 1: Reimbursement
Healthcare can be expensive in the United States. There are tremendous pressures to bring down healthcare costs. Businesses and the government are seeking ways to reduce the cost of healthcare. Reimbursement models are changing. They are shifting from a fee-for-service based model to a performance based model. This means that providers can no longer count on revenue by simply providing individual services. They will be rewarded based on the quality of population health delivered and clinical outcomes. This model is being led by Centers for Medicare and Medicaid Services (CMMS).
Though these new performance based models promise better cost management, they pose several challenges. Healthcare providers need to rethink their business. It requires fundamental changes to the way they do business and provide services to their customers. Healthcare leaders must be prepared to lead their teams through these changes.
Challenge 2: Healthcare Policy
There is a high degree of uncertainty with regard to the Affordable Care Act (also known as Obamacare). The ACA had a tremendous impact on insurance markets. This uncertainty has made many healthcare systems and insurance companies reluctant to expand. Traditionally, these industries rely on a high degree of predictability. In a mature market, they can predict what populations they will be serving and therefore can better forecast expenditures and profits. With enrollment and healthcare policy being in constant flux they have had no choice but to abandon markets or raise premiums.
Unlike their predecessors, today’s healthcare leaders need to operate in constant uncertainty. They have to be confident to adapt quickly to any changes that might come about in healthcare policy and regulations.
Challenge 3: Technology
One of the most significant changes within the healthcare industry has been the emergence of new technology. These technologies range from specialized equipment to information systems. Driven by the growing demand for “personalized medicine” these technologies are increasing the cost and complexity of healthcare. Some of the emerging technologies are (but not limited to) electronic patient records, new imaging technologies, novel drug therapies, 3-d printed devices, and robotics. Not only are these technologies costly to purchase and implement, they also often demand highly specialized workers and facilities.
Healthcare leaders need to be competent and comfortable to understand, assess, and evaluate these technologies. They have to make business decisions about the right tool or system to acquire and implement. In addition, they have to be change leaders fostering adaptation to change as well as hiring and training the right staff.
Challenge 4: Workforce Shortage
Currently, the healthcare industry is facing a growing shortage of skilled and qualified workers. The shortage is especially significant in occupations like nurses, nursing assistants, imaging technicians, and pharmacists. The graduation rates of students in these fields is unable to meet the rising demands. As the industry grows, the biggest challenge the industry will face is finding the right candidates to fill the projected 2.3 million jobs. These shortages will impact the industry growth and affect costs due to the competitive labor market.
Understanding the labor market is vital for healthcare leaders. They will have to learn how to attract and retain qualified talent. Many leaders will also have to manage the rising labor costs without negatively impacting business. When teams are short staffed, leaders will have to rise and help their teams effectively navigate the challenging times.
Challenge 5: Leadership Gap
Healthcare leaders have the daunting task of managing teams and facilities in a high stakes industry. They have to adapt to the increasing expenses, job vacancies and the increasing uncertainty. However, most healthcare leaders do not have formal or adequate leadership training. Additionally, their busy schedules do not allow them the time to pursue leadership training. Most traditional leadership and professional development programs do not address the unique challenges within the healthcare industry.
Today’s healthcare professionals have the burden of stepping up and assuming leadership roles. But there is a huge gap in leadership skills and training. Most healthcare leaders have to learn on the job and sharpen their skills with limited resources. This approach results in a multitude of preventable problems in the workplace.
The Division of Pharmacy Professional Development at UW-Madison School of Pharmacy has created a leadership training course specially designed for leaders and aspiring leaders in healthcare.
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