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Management in the Healthcare Sector class notes
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Management in the healthcaresector
1ST LESSON 20/02/2023
1. Introduction
What is management?
People issues
o Organizing the employees
o Strategy: deciding where you want to work and what to do
o Finding compromises, dealing with the employees and other people outside
Documentation
Finances: dealing with the money
Quality
o More important when it’s high regulatory (regelgeving)
o Like in the biotech or pharmaceutical companies
…
Manager is not a very ‘standardised’ profession
Job of a manager of a biotech company has to do a lot with innovation
Job of a manager of a large multinational company is dealing with the finances
It depends on different companies, the position you’re at etc.
Difficult to describe ‘management’ = a broad area !
Example to discuss the essence of management
Harvesting potatoes
1 people can harvest 10 kg of potatoes per hour
2 people can harvest 20 kg of potatoes per hour
…
But it doesn’t go up in a linear way like this
o At a certain point you’ll hit obstacles, you’ll run into a shortage off resources
o There’s a field full of potatoes, but there’s not enough equipment or a wheel cart
o Example: the 6st person is there but is waiting for someone to provide him with tools
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, 10 people but only 9 are working bigger outcome how is this possible?
10th person is organising the others, he/she is coordinating the others
Essence of management = to coordinate people
Later: specialising, like the tall people do something and the short people do something else,
because it’s more efficient
Management as paradox:
The fact that you don't participate in the production process, increases the efficiency of the production
process !
This is contra intuitive, because you always assume that the more people you’ve that
participate in a task, the more output/results you’ll have but you’ll hit resources
Examples in the field of healthcare
In the hospital: head nurse and the other nurses
o Head nurse will coordinate the other nurses
o The work is done more efficient because of this
Management in old English means: ‘to spread manure’ (mest uitrijden)
When a farmer is spreading manure, he is definitely not harvesting the crops (gewassen)
He is doing something that takes effort because the reward will be very big afterwards
Idea: that by coordinating, by organizing the work in a better way you’ll get better results
You get better results: not by working harder, but by working smarter !
Why this course?
To confront the students
o Without previous exposure to management
o With the discipline of management
To present an overview of general management
o Jargon free introduction to management ideas
Knowledge about the most commonly used terminology
o Special attention to not-for-profit organizations
Book deals mostly with commercial companies that work for profit (goods)
In this course it’s supplemented with examples from the healthcare sector and
non-profit organisations (services, not goods: taking care, insurance etc.)
Why course on ‘healthcare’ management?
Management = dealing with resources by trying to improve the way you use them
Every year health expenditure grows in all the countries on this list between 2-6%
Every year healthcare takes more of the wealth of the country
If the total wealth of the country grows by 1,5 per year, and the cost of healthcare grows by 2-
4% per year after a while all the national money will be spend on healthcare (in theory !!!)
We (people that work in the healthcare field) need to help find ways to reduce the growth in
cost of healthcare, because it’s unsustainable = this is the reason why we get this course !
If we can’t manage it better, wealthy people will get better healthcare than poor people
o Now in Belgium we’ve a system that is similar for everyone (rich or poor)
o In theory everyone in Belgium has the same healthcare coverage
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,Case Salleramics: Read + prepare answer on 4 questions (5 min)
Do you think this is relevant? Realistic story?
o It’s realistic, the way Sally started on her own and slowly growing, getting more
problems and readjusting (bijstellen)
o Examples of existing companies that started like this: Amazon, Microsoft etc.
o It often happens like this with small start-up companies (1/2 people working together)
Describe the evolution of Sally’s company, and the steps in her career?
Sally's company starts small and grows with time. In total 4 phases can be distinguished:
Phase 1: From production to coordination
Sally first made a pottery in her garage, she did everything herself. There’s no coordination
because coordination starts when there are more people. Next the orders exceeded her capacity
and she hired Tim (a friend from pottery classes), his pay would depend on the number of pots
sold. Sally's husband helped her keep the books and an accountant was contracted.
Phase 2: Division of labor – specialisation
More orders led to more co-workers/assistants including a Job Training Scheme trainee. As not
everyone can do everything, you will get specialization. If you specialize you can't do everything
yourself anymore, so you will need coordination and management. Sally hired a pottery school
graduate and two others who had a little experience. She spent more time with customers and the
accountant and less time in the studio making pots.
! The more specialisation you’ve, the more coordination you’ll need = dirty side of specialisation.
The more people that’re specialised, the more people you need who’ll coordinate them. Because
the specialists only look at their own thing, and they may make too much of certain product like
cups, but too less of others, because they’re specialised in making cups.
Phase 3: Structure: division
Not everyone works in production. Some people work as managers others do transportation etc.
Because not everyone works in production, it becomes complicated. So they adjust their structure
and develop business units. → less complexity (for example each unit makes a different car, the
different faculties of the KUL).
Tim was re-titled Studio Director, a sales administrator was hired, Tim introduced changes
whereby each worker did only one task. The firm became divisionalised with 3 divisions:
consumer products, contract products and designer products.
So they changed the structure: instead of having one company that deals with everything, they
create different divisions that do different things (example: other types of pottery).
Phase 4: From private to public (changes in ownership)
Money comes from the profit they make on the pots, because they sell the pots for more money
than they cost. If you grow a company the first type of money you’ve is from the production cycle.
But this money is not enough when you want to grow your company very fast!
Solution: get other investors that buy shares of the company public ownership
With the more growing company more money is needed (bigger infrastructure etc.). So Sally had
to change from being the owner (putting in her money in the company/ private) to the need of
investors. The investors will buy shares (aandelen) on the stock market (beurs). These people
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, become co-owners of the company, so Sally's company becomes public ownership.
→ from private to public (ownership)
Advantages of public ownership is that you spread the risk. When your company goes bankrupt,
you don't lose all your own money (private: it’s only Sally who loses money). Growing faster than
the company can generate money or than she can put in herself = main reason of getting investors.
Disadvantages of public ownership: you’ve to reach certain goals otherwise the share will drop in
value.
➡ So in public ownership there is a strong focus on achieving objectives and less on long term,
while in private ownership, there is more focus on the long term.
What aspect of the ceramics production do your studies prepare you best for?
You get your degree and you’re going to work in a pharmaceutical company
What aspects of the pharmaceutical company are you best prepared for?
o For the technical part/knowledge
What will most of you be doing later, or spending most of their time on?
o Most people to a certain degree evolve into a form of management
It could not be fulltime, for example your run a lap
o You maybe start in an lab as a technician and then you get additional tasks like
Recruiting the employees
Taking care of the other employees
Financial aspects of the company, like purchasing materials and equipment…
o Most people will get some aspects of management in the job that they do
o Typical carrier path, because you want people to coordinate that know what to do
o Not everyone gets management tasks/becomes a manager! Example: basic scientist
Management as a practice
Science: management has a certain scientific aspect to it
o They do research about what are better/worse management practices
o This is difficult to study because there’s a factor of luck and context
Would Bill Gates have the same company if he was born in Africa with the
same talent?
o You can’t do random trials to compare different companies, it’s only observational
o Science about management isn’t so developed as BM field yet
Craft: experience, practical learning
o You’re getting a lot of experience by doing it, or by working with somebody else who
is a mentor for you you’ll learn management by doing it (just like the surgeons)
Art: there’s also a creative site to management
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