Healthcare Administrator ROI Guide: The Return On Investment You Can Expect with a College Degree in Healthcare Administration
So, you’re considering a career in healthcare administration? Firstly, if you’re not thinking about ROI when you make your college and career selection, you might not belong in the field of healthcare administration. These kinds of calculations go right to the heart of what it means to be a leader in healthcare today, so start practicing now.
ROI (return on investment) is a basic cost/benefit analysis: It’s what you wind up getting back for spending a certain amount of money. In terms of college costs and your career, it’s a pretty straightforward formula:
Total Lifetime Compensation Over Base Rate – Total Cost of Education = Total Return
Not surprisingly, those variables can change a great deal depending on your level of education. Of course, the total cost of your education largely depends on the highest degree you earn… and naturally, the type of job—and the salary—you can command, will depend a lot on that too.
There’s also opportunity cost to consider—will you make more money over the long term by going all-in at your current job or taking two years off to earn a master’s degree with the hopes of landing a better one afterward? And don’t forget to consider the money you’re not earning while you are in school rather than working.
Realistically though, you don’t have to worry too much about coming up short on the ROI calculation when you’re going into healthcare administration. The median wage for healthcare administrators is in the six-figure range, well above the national average for all professions. Additionally, potential job growth is off-the-charts, with the Bureau of Labor Statistics expecting the number of openings to rise by more than 30 percent during the next decade. Although college costs in the United States have been rising too, and are likely to keep going up, they’re not going to hit a point where a degree in healthcare administration ever puts you upside-down.
Still, you wouldn’t be getting into this profession if you didn’t like to run the numbers. So, you still want to ensure that you are going to get the best value for your dollar and avoid starting your career with a mountain of debt eating into your wages for years to come.
Figuring Out Your College ROI Before Earning a Degree in Healthcare Administration
The average total cost of an American college degree at the bachelor’s level comes to $109,428.
That’s the cost when you total up four years of study, according to the National Center for Education Statistics’ 2018 estimates of all tuition, fees, and boarding costs.
But that’s oversimplifying things. Costs vary a lot from region to region or school to school, and more than anything, they also depend on the level of education you’re pursuing, which in turn impacts your salary. So, you have a more complicated, calculation to make. Good thing you like working with spreadsheets, right?
State Schools Versus Private Universities: Elements of Quality and Advantages to Factor into ROI
NCES tracks the differences in costs between public and private educational institutions and, as you might expect, they can be substantial:
Why don’t all future healthcare managers just go to a state college then? Well, let’s face it, you get a different reception when you walk into an interview holding a diploma from Ivy League University of Pennsylvania versus Random State Polytechnic (pro tip: don’t actually walk into your interview clutching your diploma, no matter where it’s from). So, there is value that comes with that higher tuition rate, but not as much as you may think.
Georgetown University’s Center on Education and the Workforce dug into this issue by calculating the return on investment for 4,500 American colleges and universities and found that, while private schools do show a higher ROI on future earnings relative to current costs, it’s not universal and not necessarily as wide a gap as you would imagine. In California, for example, Stanford University comes out on top, but the University of California, Berkeley, ranks above prestigious Pepperdine University by nearly 20 points. So, the specifics of your choice can matter quite a lot, particularly in the world of healthcare management where not all jobs and compensation packages are created equal.
The Kind of Tuition Assistance You Get Affects ROI Calculations At All Degree Levels
Another highly variable factor you’ll need to include in your calculations is the amount of tuition assistance you expect to receive.
If you qualify for scholarships, Federal Pell grants due to your family’s financial status, or something similar, then the amount of tuition the grants cover isn’t coming out of your pocket. But the degree you earn still will qualify you for the same salary level regardless of how you paid for your education, so you can add that cost difference into your ROI.
Financial aid can vary based on the college just as tuition costs can—many scholarships are offered by individual schools and won’t be available at other institutions. And many are highly competitive, so you’ll have to consider whether or not you’ll qualify—and will have to cover the costs yourself if you don’t.
That can mean taking out loans, which will have a negative impact on your ROI. Not only will you have to pay those loans back, but you’ll also pay the interest that accrues on them. Student loans tend to be low-interest and have generous repayment terms, but with student debt in the United States rising to a crises level in recent years, even a low interest loan can put you deep into the red right out of the gate.
According to Forbes, the total amount owed in 2020 was $1.56 trillion, with 45 million students—more than half of all public-university graduates, and three-quarters of private college graduates—left with an average of almost $33,000 to pay off after graduation. That comes to about $400 out of every paycheck — every dime of which works against your total return.
You may be able to avoid that loan repayment if you pick the right job, however. Many healthcare positions are open at nonprofit organizations or with the government, both of which may be covered under the Public Service Loan Forgiveness Program. In return for your commitment to work full-time for a qualified employer, you can have some or all of your outstanding federal loans forgiven after you have made at least 120 payments, which will reduce any outstanding costs and boost your ROI even if you had to get loans for school.
Expect Solid Returns Even with an Associate’s Degree in Healthcare Administration
Although it’s not common, it is possible in some cases to get into healthcare administration with only a two-year associate’s degree. There are relatively few associate’s degrees in healthcare administration, but you can major in medical office assisting, medical billing or medical administration, which can serve as a steppingstone to healthcare administration roles.
Here you’ll find a cross-section of schools across the country along with the total average annual cost (including room, board and fees less the average annual federal student aid), as reported in the Department of Education’s College Scorecard database:
- Orange Coast College – Costa Mesa (public) – $4,225
- Laurus College – San Luis Obispo (private) – $12,601
- Valencia College – Orlando (public) – $5,585
- Ultimate Medical Academy – Clearwater (private) – $17,536
- Albany State University – Albany (public) – $13,066
- Lincoln College of Technology – Marietta (private) – $16,244
- William Rainey Harper College – Palatine (public) – $7,382
- MacCormac College – Chicago (private) – $14,970
- Wichita State University (Campus of Applied Sciences and Technology) – Wichita (public) – $13,875
- Grantham University – Lenexa (private) – $8,684
- New York
- SUNY College of Technology at Canton (public) – $13,728
- Monroe College – Bronx (private) – $11,128
- Pennsylvania College of Technology – Williamsport (public) –$23,435
- Platt College-Berks Technical Institute – Wyomissing (private) – $19,075
- Dallas College Mountain View (public) – $5,006
- Remington College-Dallas – Garland (private) – $18,762
- Green River College – Auburn (public) – $8,647
- Charter College – Vancouver (private) – $29,362
As you can see, your costs will range a great deal between different geographic areas and whether or not you are going to a publicly-supported community college or a private or for-profit training institution. But your projected income range can also vary in the medical administration roles you can land with an associate’s degree, as shown in this data from Robert Half’s 2021 Administrative Salary Guide:
Patient Intake Clerk:
New York: $39,691-$65,332
Los Angeles: $37,290-$61,380
Saint Louis , MO: $28,391-$46,732
In most cases, however, individuals going into healthcare administration won’t build a career on an associate’s degree. Instead, it’s just a step and one part of the ROI calculation on your way to a bachelor’s degree and the opportunities that come with a four-year degree.
What a Bachelor’s Degree in Healthcare Administration Could Be Worth
Even for entry-level positions that include real management and administrative functions in the job description, a bachelor’s degree really is the minimum that employers of any size would expect to see on your CV.
Costs for a Bachelor’s Degree in Healthcare Administration
As you probably noticed, four years of school can add up quickly—according to 2018 data from the National Center for Education Statistics (NCES), the cost is north of $100,000 for the average bachelor’s degree when factoring in room and board.
But if you’ve already earned an associate’s degree, you may catch a break on paying for all four-years if you pick a college that has a transfer agreement with the school where you earned your two-year. If you’re able to transfer in the full two-years worth of credits, that would effectively give you a discount of about $50,000, minus the cost of the associate’s which works out to nearly $22,000 on average according to NCES .
These are some typical costs for bachelor’s programs in healthcare administration, by state, for public and private schools. The figures are adjusted according to the average amount of federal tuition assistance offered to most students, but include standard cost-of-living expenses:
- California State University, San Bernardino (public) – $8,209
- Platt College – Alhambra (private) – $23,953
- University of South Florida – Tampa (public) – $9,838
- University of Miami – Coral Gables (private) – $30,841
- Augusta University – Augusta (public) – $13,438
- Mercer University – Macon (private) – $20,828
- Illinois State University – Normal (private) – $21,301
- Methodist College – Peoria (private) – $30,592
- University of Kansas – Lawrence (public) – $18,571
- Friends University – Wichita (private) – $18,065
- New York
- CUNY Lehman College – Bronx (public) – $2,910
- Ithaca College – Ithaca (private) – $33,164
- Pennsylvania State University – University Park (public) – $30,996
- Drexel University – Philadelphia (private) – $33,631
- University of Texas at Dallas (public) – $14,336
- Dallas Baptist University – Dallas (private) – $26,203
- University of Washington – Seattle (public) – $12,001
Salary Ranges with a Bachelor’s Degree in Healthcare Administration
The Bureau of Labor Statistics is the go-to resource for establishing the salary ranges you can expect for medical and health services management jobs that are open to bachelor’s degree holders.
In 2019, the median salary for the position nationwide was $100,980. That’s about $10,000 higher than management occupations in general. But it can vary quite a bit based on industry and region:
That year, the top five highest median salaries for the job could be found in:
Additionally, your salary is likely to increase during the course of your career as your experience starts to count more than your formal education. Starting out, the lowest 10 percent of positions paid $58,820 or less, while those with plenty of experience in the top 10 percent earned more than $189,000.
Don’t forget to factor in benefits. Healthcare organizations tend to have excellent healthcare benefits packages, which come with a substantial dollar value. According to Forbes, health coverage can be worth between $5,000 and $30,000 in value annually, depending on your plan and the size of your family. Most employers offer retirement plans that you’ll need to account for and some sweeten the deal with life insurance, dental benefits, tuition reimbursement, and other perks.
Of course, you could get lucky and land in an even more lucrative role by dint of your experience and expertise. But if you really want to boost your ROI, you’ll be looking at the next step: a master’s degree.
A Master’s Degree Helps Ensure the Biggest Return On Your Investment in Education
The highest-paying roles in healthcare administration almost entirely comprise professionals who have earned a master’s degree in the field. The MHA is always a solid bet, and MBAs in Health Services Management and similar concentrations are also among the most attractive to headhunters filling C-suite slots for positions where you’ll be expected to turn a tidy profit and boost revenues yearly for the business.
Earning that degree and competing for one of these positions comes after several years in the field and a lot of experience on the business side of healthcare, solving problems and fattening margins. There’s no prescriptive formula for making it at this level, and a master’s degree alone is no sure bet. But by earning your stripes in the trenches, demonstrating your value with real results, and getting noticed by the right people, that master’s degree will serve as one critical element you will need to have on your CV if you’re going to be considered for one of these high stakes executive roles.
Costs for a Master’s Degree in Healthcare Administration
While you are free to skip earning an associate’s degree on your way to getting a bache’s, if you are considering earning a master’s degree, of course you’ll also need to count the cost of getting a bachelor’s first.
Since graduate schools can be picky about the candidates they accept, it’s wise to choose a bachelor’s program from a well-recognized university if you plan to get into a more prestigious master’s program. Of course, with that recognition and prestige comes a steeper price that you expect to recoup with a better return on the investment.
Then there’s the cost of the master’s degree itself. According to 2018 NCES data , the national average annual costs for public and private university graduate schools worked out to:
Our analysis of MHA tuition rates for Commission on Accreditation of Healthcare Management Education (CAHME)-accredited programs found substantial regional differences in average costs. Note, these are total program costs, not annual figures:
And it could be that you don’t need or want an MHA as your advanced degree. Other types of master’s programs offering concentrations related to health services administration could make more sense:
Even with a healthcare management concentration, these types of degrees come with a different emphasis and blend of expertise. The costs also vary from MHAs, with MBA programs being the priciest. In 2019, Poets & Quants, a publication covering business and financial education, found that top MBA programs were increasing in cost by as much as 18 percent every three years in response to demand. Total costs at top schools, such as the MIT Sloan School of Management, are well over $200,000. Average costs at executive MBA programs, according to a November 2019 article from CNBC, were $86,000.
But good news can be found in a survey highlighted in the same article: in the short period between enrollment and completion, graduates of those programs reported seeing their overall compensation increase by an average of 13.5% , representing a major boost to ROI.
Salary Ranges with a Master’s Degree in Healthcare Administration
So what is a master’s degree worth in actual dollars? Well, it depends a lot on your specialization and the kind of healthcare company you decide to work for. But according to the Crain’s Modern Healthcare 2019 salary survey, compensation packages going to healthcare execs are not only good, but are rapidly getting better.
The average total cash compensation for health system executives in the U.S. went up by 6.5% between 2018 and 2019, a trend that is expected to continue for the foreseeable future.
That kind of increase makes your ROI hard to calculate before you get there, but all the uncertainty tilts in the right direction: Up. Way up.
Consider these major roles open to master’s degree holders in healthcare administration at hospitals nationwide:
And, in larger healthcare systems that run large networks of hospitals, surgery centers, and clinics:
The ownership and annual revenues can matter a lot, too, particularly if your degree and experience take you all the way to the top:
- Hospitals with Net Revenue Over $300 Million
- President and CEO, stand-alone hospital – $777,000
- President and CEO, system-owned hospital – $475,000
- Hospitals with Net Revenue Below $300 Million
- President and CEO, stand-alone hospital – $524,300
- President and CEO, system-owned hospital – $310,000
Location is important too, just as it is when you are looking at degree costs. According to the Total Compensation Solutions 2019 Hospital Executive Compensation Report, the spread for top financial executives in several cities around the country could be measured in the hundreds of thousands:
Bonuses are the Sugar On Top of ROI for Senior Executives
Although they’re harder to calculate, bonuses and other perks are an important part of your compensation at the senior executive level.
These can vary tremendously from company to company and person to person because they are usually based on set key performance indicators (KPIs). You can’t know what those are going to be before you get into the job, but, according to Crain’s Modern Healthcare, a president or CEO of a large healthcare system can see as much as $474,000 above base salary if they hit all their targets. For those working with public companies, stock grants or discounts can prove even more lucrative.