Hospitals are our safety net. We do what we can to maintain our health at home. We also trust that if things get out of hand and our family doctor isn’t able to handle an issue we might be having, we can go to the hospital and they will most likely fix the problem. Most of us think of hospitals as places to heal, and they are. Yet hospitals are also businesses. They have quotas to keep and fiscal responsibility to maintain. Hospital administrators bear the brunt of these responsibilities. So, what are the top three challenges facing hospital administrators?

According to Becker’s Hospital Review, the three challenges below are among the biggest hurdles to be overcome.

Medicaid Payments

The most recent and probably the biggest challenge faced by hospital administrators is the management of Medicaid payments. There are a few different reasons why this is difficult. The recent rise in unemployment has many Americans looking to government Medicaid for help with their health care. Medicaid is known to reimburse hospitals for health services far less than individually purchased forms of health insurance. With the new regulations taking effect soon, this lower reimbursement will be cut even more. The more Medicaid or Medicare patients a hospital serves the less money it is making. Also, medicare provides healthcare for senior citizens. The numbers of senior citizens are rising drastically as the baby boomer population continues to age. Additionally, Medicare and Medicaid have spending caps. So if more and more patients who bring in minimal revenue need served, how is a hospital administrator supposed to make ends meet?

Changes in Pay Structure

Changes in the pay structure also pose new challenges.The traditional pay per service model has become outdated. New regulations require hospitals to charge fees based on the patient’s outcome and overall quality of care. The healthcare consumer’s point of view is becoming all the more important. This change has led hospitals to doing their best to provide the most comfortable hospital experience possible. They are putting play gardens and play areas on the grounds of children’s hospitals, creating spa environments for women’s imaging facilities, and converting patient care rooms with two beds to private rooms that look more like home. Hospital administrators hope that these changes will bring up the bottom line as patient outcomes improve.

Shortage of Healthcare Professionals

Lastly, the shortage of healthcare professionals poses a major hurdle. The healthcare industry is posed to grow 2.5 times faster than any other industry annually. Healthcare professionals expect to be paid more to repay their student loans. So hospital administrators must find a way to acquire quality employees from a small pool for an ever growing pool of job openings and manage to pay them more. Acquiring these employees is more complicated than just putting out an ad. Recruiting includes building relationships with local and national schools that educate new healthcare employees and wooing them with an attractive place to work, one with benefits, lucrative pay and a feeling of passion for working at their particular facility.

All of these challenges make the position of hospital administrator a difficult one. Balancing patient satisfaction and fiscal responsibility can be quite the juggling act. Yet the fact that hospitals are ultimately businesses makes managing these difficulties in productive ways a necessity.