Policies are of two types: general and operational. General policies apply to the entire organization, whereas operational policies pertain to a specific unit, department or service.

Procedures, on the other hand, are used to define specific actions for organizational members. They usually come in the form of a sequence of steps to complete a task.

Examples of these are procedures for admitting or discharging patients or ordering supplies. Good policies have a number of characteristics: (1) They are consistent with larger organizational objectives, (2) Their impact is well thought out before they are formalized, (3) They are flexible so they can be applied in typical as well as unique situations, (4) They are ethical and legal, and reflect the values of the organization, (5) They must be clear and understood and (6) They must be consistent with each other.

(Manual for the Board of Governors Examination in Healthcare Management; page 120)