Healthcare Administration

How to Become a Hospital Chief Administrative Officer

How to Become a Hospital Chief Administrative Officer
Given how much they do, the CAO might just be the c-suite executive with the most expansive knowledge of the inner workings of a hospital. Image from Unsplash
Christa Terry profile
Christa Terry March 18, 2020

You're not alone if you've never heard of the CAO role. But even though it doesn't hold the cache of CEO, it's an extremely important—and well-paid—position.

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Many people assume that it’s the hospital CEO‘s job to oversee everything from patient safety to operations to human resources, but in most facilities that’s not actually the case. A hospital’s chief executive officer typically focuses on implementing a facility’s short- and long-term strategic plans, while another executive—the hospital’s chief administrative officer, or CAO—handles the actual running of the place.

The chief administrative officer is a c-level hospital administrator who typically serves alongside the chief financial officer, chief medical officer, chief information officer, chief operating officer, and other executives. Unlike those other top executives, a CAO’s responsibilities usually involve multiple departments and disciplines. It’s an excellent position for anyone who wants to work on the business side of medicine but doesn’t want to specialize.

In this article about how to become a hospital chief administrative officer, we cover:

  • What is the function of chief administrative officer at a hospital?
  • What is the difference between a hospital CEO and a hospital CAO?
  • Do hospital administrators have to be doctors?
  • How do you become a chief administrative officer at a hospital?
  • What does the advancement path look like for CAOs?
  • Are there certifications for hospital CAOs?
  • What is the typical timeline for becoming a hospital CAO?
  • Is this one of the higher-paying jobs in healthcare administration?

What is the function of chief administrative officer at a hospital?

A CAO’s responsibilities involve everything from project management to budget creation and approval to negotiating deals with suppliers. It’s a big job that’s definitely tailor-made for exceptionally organized people. CAOs manage daily operations and do things like:

  • Create the hospital’s administrative policies
  • Assist with strategic planning
  • Develop success metrics for different departments
  • Manage and direct department heads
  • Approve and track budgets
  • Analyze department success against set goals
  • Oversee human resource policies and procedures
  • Supervise marketing efforts
  • Oversee the preparation of financial reports
  • Serve as a high-level project manager across departments
  • Brief the CEO regularly
  • Meet regularly with the chief financial officer, chief strategy officer, chief information officer, chief marketing officer, vice presidents, senior vice president, etc.

Given how much they do, the CAO might just be the c-suite executive with the most expansive knowledge of the inner workings of a hospital.

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Health administration undergraduates sometimes start out in admissions, marketing, risk management, managed-care analysis, or other non-clinical staff positions and work their way into higher-level administrative roles. While it’s possible to work in healthcare administration without an MHA, it can take a lot longer to climb the managerial ladder without a master’s degree. (source)

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What is the difference between a hospital CEO and a hospital CAO?

The most straightforward answer is that the similarities and differences between these two roles are largely determined by individual hospitals. The role of chief administrative officer at one hospital might look a lot like that of the CEO at another. However, at most hospitals, the chief executive officer focuses on strategic planning, risk management, and decision-making, while the CAO is responsible for keeping the hospital running smoothly and serving as a liaison between department managers and the CEO.

Do hospital administrators have to be doctors?

Hospital CAOs and other hospital administrators don’t have to be doctors or registered nurses. They don’t even need a medical background. Some people believe, however, that doctors, nurses, and other patient-care providers make the best administrators. Dr. Suneel Dhand states as much on MedPage Today’s KevenMD.com blog, writing that “administrators completely fail to grasp the realities and rigors of the front-line practice of medicine. They are all-too-quick to enforce mandates and bandy around terms like ‘patient satisfaction’ like bumper stickers, but lose the forest for the trees in terms of reasons why their ideas are unsuccessful.”

Part of the problem is that healthcare administrators and patient-care providers frequently have competing goals. If you’re serious about becoming chief administrative officer at a hospital, you may find yourself working in environments where administrators and medical staff are at odds. The more you know about things like patient care, patient safety, medical policies, and how providers look at health care, the greater the chances that you will be able to smooth relations between the practitioners at your hospital and the administrators under your leadership.

How do you become a chief administrative officer?

Technically, the highest level of education actually required to join the ranks of hospital administrator is a bachelor’s degree. Hospital administrators earn undergraduate degrees like the:

  • Bachelor of Science in Healthcare Management
  • Bachelor of Arts in Healthcare Administration
  • Bachelor of Science in Health Services Management/Health Systems Management
  • Bachelor of Science in Business Administration and Healthcare Management
  • Bachelor of Arts in Health Services Administration

There are also plenty of top executives in healthcare and hospital administration with bachelor’s degrees in business, information technology, and finance. Some even have a bachelor’s degree in nursing. When your goal is to become a hospital chief administrative officer, you can safely choose any of these majors, provided you take advantage of opportunities to take courses in:

That said, just because there’s a small chance you could become a hospital chief administrative officer by working your way up doesn’t mean an advanced degree isn’t necessary. The reality is that most employers are looking for CAOs with hospital administration degrees or healthcare-focused MBAs. You should plan on getting a master’s degree.

As for which master’s degree, a Master of Health Administration (MHA) is a safe bet. On-campus and online MHA programs are intensive business administrative programs almost entirely focused on the healthcare industry. Students take classes in:

  • Healthcare management
  • Nursing management
  • Financial management in healthcare
  • Human resources management in healthcare
  • Analytics for healthcare management
  • Health policy administration
  • Hospital administration
  • Long-term care administration
  • Performance improvement in healthcare
  • Legal aspects of healthcare
  • Healthcare ethics
  • Medicare and Medicaid policy
  • Health insurance and managed care
  • Patient-centered care

Some MHA programs offer students the opportunity to choose a concentration or specialization. Consider focusing on healthcare operations and health systems management when your goal is to become a hospital chief administrative officer. These tracks will prepare you to run a complex healthcare organization like a hospital.

The best alternative degree is probably the MBA with a healthcare concentration. Some people who go into healthcare administration choose the MBA over the MHA because the former gives them more flexibility in their later careers. Whereas the MHA is laser-focused on healthcare, the MBA is still primarily a generalist degree broadly applicable in a wide variety of fields. It better facilitates transitioning out of healthcare in the future, should you want to leave that option open.

In either case, know that it’s not unusual for master’s degree programs for hospital administrators to require applicants to have three to five years of relevant work experience. Don’t worry if your background isn’t in health management and you’ve never worked in medical operations, however. There are MHA programs, like the one at George Mason University, that don’t require previous experience in health administration.

What does the advancement path look like for CAOs?

Once you graduate from a relevant bachelor’s program, you’ll probably spend some time working in associate staff positions in hospitals or healthcare networks. Entry-level administration jobs in hospitals include:

  • Operations assistant
  • Assistant administrator
  • Health information technician
  • Medical claims insurance examiner
  • Program reimbursement specialist
  • Human resources (HR) associate
  • Business development associate

Mid-level administrators in hospitals work in every department and may oversee operations in admissions, HR, marketing, and in medical specialty departments like radiology or maternity. You might also spend a few years working in other healthcare settings, like nursing homes or large medical practices, before becoming a hospital administrator. From there, an administrator will generally be promoted to an executive-level position in a specific department (e.g., vice president of health information or director of the children’s health department) before advancing into a senior leadership position like CAO.

Are there certifications for hospital CAOs?

You won’t need any specific certifications to become a hospital’s chief administrative officer, but having one or more voluntary specialty certifications can provide an advantage when you’re looking for work. There aren’t a lot of hospital-specific administration certifications, but you’ll find some useful healthcare administration and management certifications as well as certifications for administrative services managers in healthcare.

The American College of Healthcare Executives, for instance, offers a Fellow of the American College of Healthcare Executives certification, and the American Association of Healthcare Administrative Management offers five revenue-focused certifications.

What is the typical timeline for becoming a hospital CAO?

Most senior-level managers and executives in hospitals (like CAO, CFO, CIO, executive vice president, department presidents, etc.) have at least ten years of professional experience, if not a lot more. Add the years you’ll spend in school to that (it typically takes four years to earn a bachelor’s degree and two to earn a master’s degree), and it can take seventeen to twenty years to become a chief administrative officer in a hospital.

Is this one of the higher-paying jobs in healthcare administration?

Chief administrative officer is a high-paying position, period, whether you’re working in healthcare or in another industry. Sites like Glassdoor and Salary.com don’t typically break down CAO salaries by field, but according to those sites, the average chief administrative officer salary probably falls somewhere between $118,000 to $343,000. CAO salaries in healthcare tend to be higher than they are in other fields, but how much you actually earn in this position will almost always depend on factors like your location, the size of the hospital you work for, and the experience you bring to the table. Salary.com reports that chief administrative officers with advanced degrees earn more, but that’s true in most industries. By the time you become a hospital’s chief administrative officer, chances are that you’ll have already earned at least a master’s degree.

Advancement potential may be more important to you than salary, however, especially once you reach a role this close to the top of the corporate ladder. Chief administrative officer is typically considered one of the likely stepping stones on the path to CEO. If you like the idea of becoming a hospital or healthcare network CEO someday, aiming for CAO is an apt strategic move.

Questions or feedback? Email editor@noodle.com

About the Editor

Tom Meltzer spent over 20 years writing and teaching for The Princeton Review, where he was lead author of the company's popular guide to colleges, before joining Noodle.

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