What is Health Administration?

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  • Written By: Keith Koons
  • Edited By: Lauren Fritsky
  • Last Modified Date: 25 November 2019
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Health administration is the business management side of a medical organization, and the department's ultimate goal is to ensure that clients are provided the best quality of service in the most cost-efficient way. With a health administrator at its helm, it is typically composed of two functional areas: the clinical side, which refers to the health care professionals and their practice, and the non-clinical side, which involves all other personnel. Doctors’ clinics, hospitals, and chemical rehabilitation centers all require health administration specialists to regulate the types of services provided by the institution.

In a medical center where daily operation is performed by hundreds or even thousands of employees, the functions of health administration are distributed among several departments, each headed by an administrator. It is common to find administrators specifically in charge of patient services, medical billing and finance, human resource management, and several other departments, each of them tasked with providing a specific service so that the facility can function as a whole. Each of these department managers reports to the top hospital administrator, who works alongside the board of trustees to ensure that all needs are being met. Another function of this panel is to develop policies that ensure that the hospital administration runs smoothly and remains financially viable.


The scenario of health administration is much more streamlined in a doctor's clinic where the practicing physicians are the actual owners, because they often take charge of the clinical supervision without further assistance. This allows the health care administrator to personally attend to the day-to-day operations, such as patient concerns, manpower, training, and numerous duties in public relations. The only tasks that usually get delegated are ones that require a great deal of time, such as bookkeeping, health insurance claims, records maintenance, and the procurement of supplies. While the owners look after the clinical area, the health administrator remains responsible for keeping the business sustainable.

One of the biggest challenges of health care administration is maintaining the balance between satisfactory service and profitability. For this reason, this field has taken advantage of technology to benefit from cost-saving labor assistance from home-based workers and outsourcing companies. It is now customary for health administration to outsource call routing, medical billing, and health information processing so that the department can focus on providing optimal patient care. This development adds a new dimension to health administration, because even the smallest outpatient systems can function like a much larger organization without increasing payroll or other expenses.


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