Improving subjective decision making in health care administration

Managing a health care institution typically requires the consideration of many nonquantifiable factors, such as community relations, quality of service, and employee morale. As a result, subjective judgments are an inevitable, and often major, part of decision making in health care financial management. A large body of scientific research has shown that people's subjective, or intuitive, judgments tend to be biased and inaccurate. This article reviews the major types of errors typically found in four phases of decision making: defining the problem, estimating the effects of different alternatives, choosing an alternative, and evaluating the outcomes as the basis for subsequent action. In addition to alerting health care administrators to these potential judgment errors, several methods to improve subjective decision making are explained.