Throughout your life you may have been faced with making important decisions. For example, which college to attend and what your college major and career choice would be or whether to buy a house or rent. These decisions will affect your wellbeing and have either a positive or negative outcome on your life. In the health care field, it is equally important for health leaders and administrators to make decisions that are in the best interests of their health care organizations, patients and communities. Their decisions have significant impacts on quality patient care delivery and the success of their organizations.

Just as there are tools that individuals can utilize to help them make decisions with positive outcomes, there are also tools for health care administrators and managers to use in making better informed decisions. The practical decision model named Evidence-based Management (EBMgt) is one of those tools. In this article we will explore the principles and processes of EBMgt.

Health care is a fast-changing field that presents many challenges to health leaders and administrators of health care organizations. According to the Centers for Medicare and Medicaid Services (2020), the U.S. health care system spent $4.1 trillion on national health expenditure which accounted for 19.7 percent of our gross domestic product (GDP) in 2020. A study conducted in 2020 indicated that approximately 25 percent of total health care spending was wasteful in the U.S. health care system despite efforts to reduce overtreatment, improve care and address overpayment (Shrank, Rogstad, & Parekh, 2020).

Health care administrators and managers are faced with making better decisions in order to reduce skyrocketing health costs, to improve quality of patient care and to achieve their organizations’ mission, vision and core values. For example, is there a need for a hospital to expand its health services to reach out to more patients in its community? Is it justifiable to purchase a robotic surgical system for a cost of over $2 million in a critical access hospital? How do health care administrators allocate their organizational resources adequately and fairly to meet the needs of their patients and communities? Regarding managing the issues of human resources in health care organizations, who should be hired and/or who should be promoted and be given awards? If these types of decisions are made by uninformed administrators and managers, unconscious biases and/or errors can be caused due to poor human judgment.

Traditionally, the care of patients was influenced by the experiences and opinions of physicians who provided patients with medical diagnosis and treatment. However, since the early 1990s, physicians have begun to use Evidence-based Medicine (EBM) which is a new approach to the practice of medicine established by Drs. Archie Cochrane and David L. Sackett. Dr. Sackett said to medical students, “Half of what you learn in medical school will be shown to be either dead wrong or out-of-date within five years of your graduation; the trouble is that nobody can tell you which half.” With advanced developments in medical research and information technology, it is hard for health care professionals to keep their knowledge in the field up to date due to their busy medical practices.

Although the early EBM movement received some criticism, a growing number of physicians and other health care professionals such as pharmacists, physician assistants, nurses, physical therapists, speech language therapists, audiologists, occupational therapists, etc., have accepted the use of EBM and Evidence-based Practice (EBP). The whole process of EBM/EBP is the integration of the best current available research evidence with clinical expertise and patient values. Influenced by the EBM/EBP movement, health care administrators and managers have become interested in the evidence-based approach and slowly adopted it in their health care management decision-making process in recent years (Guo, Berkshire, Fulton, & Hermanson, 2017). That concept has become known as Evidence-based Management.

Let’s explore the definition of EBMgt and how it can be put into practice in health care management decision-making. Evidence-based management is defined as making decisions about the management of employees, teams or organizations through the conscientious, explicit and judicious use of the four sources of evidence (Center for Evidence-Based Management, 2022). The four sources of evidence to be used for making decisions include: the best available scientific evidence, organizational data, professional experience and stakeholders’ values and concerns. There are five steps in the application of the EBMgt model: 1) formulate a management question; 2) acquire research evidence; 3) appraise the quality of the evidence; 4) apply the evidence to the decision; and 5) evaluate the outcomes of the decisions implemented in health care management.

From these five steps of the decision-making process, we can see that EBMgt is an effective professional practice for improving quality decision-making. It uses the best current available research evidence and critical assessment of the validity and quality of the evidence to reduce biases. It also involves looking at the organizational facts without solely relying on anecdotes and building a culture in which health care administrators and managers are encouraged to tell the truth to maintain integrity, even if it is unpleasant. In addition, there must be a commitment to putting in the time and effort to acquire and apply the best evidence to make decisions that will improve the effectiveness and efficiency of the organizational performance.

Why is it so important for health care administrators and managers to adopt the EBMgt model in their decision-making? Research evidence showed that health care administrators and managers rarely used qualitative and quantitative data to make decisions in health care management (Liang, Howard, & Rasa, 2011). A study showed that the main sources hospital administrators used for decision-making were personal experience and organizational data (Guo, Farnsworth, & Hermanson, 2015). This may result in errors of human judgment such as group think, authority bias, recall bias, false consensus effort, the Halo effect, etc. These types of errors and biases in human judgment drive the need for more evidence-based decision-making in health care business and management.

There is a sense of urgency to improve the quality of management decision-making. Scholars stated that an evidence-based practice would improve the competence of the decision-makers and their motivation to use more scientific methods in health care management decision-making (Kovner & Rundall, 2006). Shortell, et al., stated that consistent, sustainable improvement in U.S. health care systems is unlikely unless EBM and EBMgt are linked together (Shortell, Rundall, & Hsu, 2007). The research showed that in recent years there has been a growing number of health care administrators and managers who have positive beliefs and attitudes toward the use of EBMgt and have also adopted this model in their management decision-making (Guo et al., 2017).

Although EBMgt is considered a best practice model in health care management decision-making, it is noted that this model does not answer all management questions. There are some barriers in the practice of this model such as lack of time, lack of training opportunities, unfamiliarity with EBMgt and lack of skills in searching and appraising the quality of evidence (Guo, Berkshire, Fulton, & Hermanson, 2018).

Therefore, it is important to provide educational training on the process and skills of practicing EBMgt decision making to improve the quality of health care business and management decisions. Since 2013, my colleagues and I in the Health Care Administration Program at Idaho State University have provided EBMgt training to health care administrators and managers throughout Idaho. Since the launch of the unique Master of Healthcare Administration program at our College of Business, I have incorporated EBMgt content into my health care administration courses. My hope is that graduate students who are the new generation of health care administrators and managers will be better equipped with basic knowledge and skills in the practice of EBMgt for making better health care management decisions. I also hope their decisions will be based on the best available scientific evidence in conjunction with their professional wisdom, organizational data and stakeholders’ values and concerns.

In conclusion, when health care leaders and administrators make better decisions using the EBMgt model, their decisions will ultimately improve population health, patient safety and quality of care and health access. Their ability to meet the widespread demands for reducing health care costs and wastes will increase and the efficiency and effectiveness of their health care management will improve.

Ruiling Guo is a professor of health care administration in Idaho State University’s College of Business.