Is an MBA worth it?

Source: Medical Economics
By: Wayne J. Guglielmo
Originally published: May 5, 2006

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When Michael Genovesi, a critical care pulmonologist in New Britain, CT, decided in the mid-'90s to go back to school after 20 years in practice, it wasn't to learn about the fall of the Roman Empire or Giotto's early frescoes. It was to study business in the University of Connecticut's Executive MBA program.

"I didn't get the degree in order to change my practice or anything like that," says Genovesi, who says he wants to practice medicine until he retires. "I did it to learn something different."


Power Points

Lots of doctors feel the same way. "They're in midcareer and need a shot of adrenaline," says Kenneth Veit, dean and senior vice president for academic affairs at the Philadelphia College of Osteopathic Medicine. Veit, an FP, completed his own MBA in 1988.

But a change of pace isn't the only reason midcareer doctors earn an MBA. Some, like Veit, start moving into leadership positions without the requisite background. Before going for the degree, he says, "I'd be sitting around the table with the CFO and other administrators, and I didn't know what they were talking about. Now I do, and my credibility has increased." Other doctors want to start a business—sometimes as part of their practice—and see the degree as a useful tool. Still other physicians simply want to manage their own practices better, and think the MBA will help bridge the serious gaps in their business knowledge.

Increasingly, doctors in training would like to bridge those gaps too. In response, medical schools have begun to beef up their "business of medicine" offerings, according to M. Brownell Anderson, senior associate vice president, division of medical education, at the Association of American Medical Colleges. These days, medical students can choose from scores of different courses, covering topics such as managed healthcare costs, cost containment, and leadership and team skills.

They can also jump on the MBA bandwagon, if they choose. To date, 46 of the nation's allopathic medical schools offer combined MD/MBA degree programs, according to the AAMC. Among colleges of osteopathic medicine, five have DO/MBA programs, which they offer themselves or jointly with another school, says the American Association of Colleges of Osteopathic Medicine.

"Students want to be better prepared for the business of medicine—and the combined MD/MBA degree is the most developed manifestation of that fact," says Anderson.

We talked to four doctors who went the MBA route. All have remained in clinical practice, although with varying degrees of restlessness. Three completed their degrees after a decade or more in medical practice. One decided to do it earlier, figuring that to go back to school later would steal precious time from his medical career.

Brian S. Jacobs, internist
Indianapolis


Two-thirds into the first year of his residency, Jacobs entered the MBA program at Indiana Wesleyan University, located in Marion, IN. (For other MBA options) "I'd always been interested in healthcare financing, and I wanted to keep my options open," Jacobs says. He started the program in early 1997, and finished it in May 1999, just about a month before completing his residency.

The MBA has proven a powerful force in his professional life. Initially, it gave him the confidence to start his own solo practice, he says, rather than becoming a paid employee. Among other things, it made him a better price negotiator for medical supplies, office space, and the like.

Then, after more than a decade building a successful private practice, Jacobs' dual degree gave him both the knowledge and bona fides he needed to start his own healthcare finance company. That company is HealthMatch (www.healthmatch.com), which aims to do for consumers with health savings accounts and their own money to spend what companies like Edmunds.com and Kelley Blue Book do for car shoppers: offer them the value and price data they need in order to make wise purchases. It also aims to rid the traditional healthcare system of costly claims processing in favor of an easy-to-use debit card, says Jacobs.

To launch the company, Jacobs had to convince investors and others that his vision—not to mention his business model—was a sound one. "I wrote and made calls to managed care executives and bankers," he says. "If I'd done that simply as an MD, I don't think my letters and calls would've been returned. But as an MD/MBA, they were returned."

At this point, Jacobs is spending about 80 percent of his time on his practice, and the remainder on his start-up, which has grown to 10 people. In fact, he wishes the scales were tipped in the opposite direction: "Not that I don't like clinical practice, but business is a lot more fun, and start-ups are especially exciting. I'd spend my whole day at the HealthMatch office, but my wife says I can't."

Birgit R. Houston, FP
Nashua, NH


Houston had been starting to feel as if she were walking around with a big target pinned to her back. "I'd been sued a couple of times, so I felt that, whatever I did, a patient who'd had a bad outcome was going to slap a suit on me," she says. To protect herself from "the exposure you get by seeing patients," she decided to move from clinical practice to an "administrative leadership role"—perhaps with a managed care company. But to do this, she would need more than the business of medicine certificate that she'd earned in 1998 from a Johns Hopkins distance-learning course.

In 2001, she enrolled in an MBA program offered by Southern New Hampshire University, located in Manchester. The school's six statewide locations and online curricula couldn't have been better tailored for a busy doctor. (Houston still saw patients three-quarters of the time and also served as chief of physician services at her eight-doctor primary care clinic.)

By the time Houston's May 2004 graduation rolled around, however, the opportunities for physician executives had shrunk significantly. Faced with mergers and consolidations, "insurance companies had started to lay off a lot of their medical directors," she says. The choice she faced was a stark one: look for other executive opportunities, perhaps in other parts of the country, or put her MBA to use where she was.

She chose the latter, and things have worked out well. Although she doesn't get involved with budgets and accounting—those areas are handled by the clinic administrator—she does use her business training in other ways. "We just rolled out an electronic health record, and I managed that process," Houston says. As chief of physician services, she also uses her training in human resource management, organizational leadership, and quality improvement.

But perhaps her biggest role these days is that of translator. "Having a general understanding of the language of business permits me to translate what each side is saying when my colleagues and people from the business world sit down around the same table."

Was getting the MBA worth it? Houston is unequivocal: "Yes, it was worth my time and effort. I have knowledge that I didn't have before, and I'm able to look at the world in different ways."

Eric D. Ladenheim, vascular surgeon
Fresno, CA


By the late 1990s, Ladenheim, then a member of the Permanente Medical Group had been practicing surgery for nearly a decade. He still enjoyed medicine, but he was at his wit's end as an employed physician with little control over his practice and practice environment. "I was frustrated and discontented with medical practice, and I knew I needed a change," he says. He decided to go for an MBA, perhaps so he could hone his executive skills to become a physician leader within the Permanente group.

In 1999, he enrolled in the executive MBA program at the University of California, Irvine, which permitted students who also held other jobs to take four days of classes every three weeks. "It was the least destructive midlife crisis that I could have," says Ladenheim, looking back.

But the further he got into the program, the more he realized that he wanted to leave clinical practice altogether and focus exclusively on medical administration, perhaps as a managed care executive. There was a hitch, though, and it had little to do with the job availability problem that FP Birgit Houston would encounter a few years later. It had to do with money. In fact, after he surveyed what companies were paying their physician executives, he realized that the pay scale was far below what he was making as a vascular surgeon, now in private practice. "At that moment, I gave up on the idea of administration, and decided to use my MBA skills to augment my practice," says Ladenheim, who received his degree in 2001.

Since then, he's been able to call on his training to figure out the baffling organizational intricacies of his hospital, resulting in smoother relationships with administrators; to communicate knowledgeably with his accountant, so that he gets the most from his advice; to market his practice successfully; and to negotiate realistically with health plans. ("I don't knock my head against the wall trying to accomplish something that's futile.")

The MBA also taught him to be more of a team player, he says: "Prior to the degree, I paid lip service to teamwork, but I really practiced medicine as a solo sport. In the MBA program, I learned how much more could be accomplished when people work together, and put the interests of the team ahead of individual interests. Getting my MBA really helped me to grow up."

Mark J. Bolton, emergency physician
Heath, OH


As an employed physician, Bolton has the "freedom to do other things," as he puts it. One of those things is creating a blueprint for his life after medicine. "With enough intellectual capital and the right planning, there's no reason why any of us in this country can't do very well financially in retirement," says Bolton, who's 46.

To add to his own intellectual capital, Bolton enrolled six years ago in the online MBA program offered by Regis University in Denver. As a half-time student, he completed the degree in two-and-a-half years.

Since then, he's worked hard to create the "income generating business" that he hopes will see him through his post-medicine retirement. Among his moneymaking ventures, he's established his own consulting business, drawing on both his medical and business training to work with attorneys, physician recruiters, pharmaceutical marketing firms, and assisted living facilities.

But he's also chosen to donate his time and skills to promote and nurture a unique group of bluegrass musicians known as "The Lovell Sisters Band." Made up of three sisters ranging in age from 15 to 19, plus two additional members, the band gained national attention last year when it won a teen talent competition sponsored by American Public Media's A Prairie Home Companion.

Bolton says that, as a friend of the family, he's only helping them get started. He's already met with Wal-Mart and Cracker Barrel about distributing the band's second CD—negotiations during which his MBA training came in handy. "When I was meeting with the Wal-Mart VP in charge of music distribution, I wasn't just some crazy doctor calling up with a harebrained scheme to make the sisters the next big thing in music," he says. "I had a carefully worked out marketing plan, and that never would've happened had I not completed my MBA."

As for Bolton's own entrepreneurial dreams, beyond his consulting business, Bolton says: "I have great faith that, sooner or later, something will drop into my lap."

What an MBA can—and can't—do for you


These doctors' stories also point up some of the pros and cons connected with adding an MBA degree to your name. The benefits of earning the credential are substantial. An MBA degree can:

Enhance your credibility in the business world. It can change people's perceptions of you, as several of the doctors we talked to said. With it, you're no longer considered "just a doctor"—someone who's probably superb at what he does but who may not know beans about the commercial world. You've been admitted to the club, so the calls you make are more likely to be returned, and your ideas taken seriously. In short, the added credential boosts your clout in the world beyond medicine.
Introduce new subject areas and new ways of thinking. An MBA degree can also give you the knowledge, vocabulary, and perspective you need to succeed in business, whether that means running your own practice better or building a new business, as internist Brian Jacobs has done. And the degree can give you the skills you need to become a more effective physician leader. Doctors in those positions "have a larger vision of medicine beyond clinical practice and need the skills and perspective that the MBA teaches to realize that vision," says Mindi K. McKenna, co-author along with FP Perry A. Pugno of Physicians As Leaders: Who, How, and Why Now? (Radcliffe Publishing, 2005) and a faculty member in the Physician MBA Program at Rockhurst University, in Kansas City, MO.
Build teamworking skills. As vascular surgeon Eric Ladenheim found out, the business and medical school approach to education is very different. For him, the MBA's team approach and its disciplined system for tackling projects have proved life changing, and his reaction isn't uncommon. "When students who've had business-school training come back into the medical world, they're much more accepting of working as part of a team," says Ken Veit of the Philadelphia College of Osteopathic Medicine. "They know they can't simply dictate. They're eager to work with the nurses, techs, and administrators to make, say, an OR schedule work better."
Renew your love of learning. Even if you have no practical goal in mind, getting an MBA can simply be a lot of fun—a way to meet new people, learn new things, and stimulate another part of your brain.

But there are also things an MBA can't do for you—so think twice before taking the plunge. One of those things is guarantee you'll get an administrative position, if the degree is part of your exit strategy from medicine.

"If practicing doctors think they can get an MBA degree and move directly into an administrative position, they're deluding themselves," says Barbara Linney, vice president of career development of the American College of Physician Executives. "They need management experience as well as the degree." Linney is even more emphatic when it comes to medical students who obtain dual degrees. "Recruiters have a number of baseline requirements—board certification in your specialty, five years of clinical practice, good communication skills, and management experience," she says. "Without at least these requirements, students shouldn't really expect to move forward."

But even with experience and credentials, doctors looking to exit clinical practice for management may have it tough. "There are a fair number of physician executives on the market, so recruiters can pick and choose," says Linney. "Once people retire, there'll be a need for younger people to take their place, but, right now, the market is tight." Doctors whose primary motivation for seeking an executive position is to escape the frustrations of clinical practice will face an especially hard time. Says Linney: "If a candidate is simply running away, recruiters and hiring organizations will pick up on that. They're looking for candidates who are moving toward something."

So, an MBA, clearly, isn't right for every doctor. But if you have a realistic motivation, clear goals in mind, and don't mind the extra time commitment, it just might be right for you.



Choose the program that suits you best

With so many schools now offering midcareer and dual-degree MBAs, there's almost certain to be a program out there to suit you. For the practicing doctor who needs to pursue the degree part time, schools offer a variety of options, ranging from online programs to campus-based programs to programs that combine the two approaches.

Regis University in Denver (where FP Mark Bolton earned his degree) offers an MBA online program (www.MBARegis.com) that can be completed in two years or in as little as 16 months, for students admitted into the fast-track option. Regis offers four MBA concentrations: general emphasis, marketing, finance and accounting, and healthcare management. For each concentration, there are 11 required courses, totaling 36 credit hours. For the 2005/2006 school year, tuition is $1,800, $600 per credit hour. (There's also a $75 application fee plus the cost of books and other materials.)

If you live in an area with a college or university nearby, you have the option of attending an on-campus program as a part-time student. If, on the other hand, you live a distance from a school's main campus but near one of its regional locations, you may be able to combine online and site-based learning, as FP Birgit Houston, of Nashua, NH, did when she earned her MBA degree from Southern New Hampshire University.

But an MBA isn't the only way to enhance your business savvy. FP Bernd Wollschlaeger of North Miami Beach, FL, completed the AAFP's "Fundamentals of Management" course, and says he increased his practice revenue by 30 percent. Cost for the 2006 course, now completed, was $1,400 for an individual physician, and $2,300 for a physician/practice manager team. (The AAFP is in the process of revamping the course, which will be offered again in 2008; for general information on the course, go to http://www.aafp.org/online/en/home/c...rses/fom.html).

The American College of Physician Executives also offers a variety of online courses, including one on practice management (net.acpe.org/Resources/Brochures/InterAct/InterAct.pdf). For ACPE members, the price ranges from $500 to $750, depending on whether or not you choose the self-study option with online discussion. Nonmembers pay from $575 to $825. (ACPE has also partnered with several universities to offer both an MBA and a Master of Medical Management degree [www.acpe.org/degrees] ).