Private practice physicians have to wear two hats: they must provide quality care to patients while also running a profitable business. While large hospital systems often have business administrators handling the commercial side of things, at smaller practices, this responsibility tends to fall to the doctors.
However, most physicians don’t have formal training in business and management. Medical school can teach you how to treat your patients, but not necessarily how to run your practice. Getting a Master’s of Business Administration (MBA) in healthcare can give you the skills you need to manage your practice successfully—but is it right for you?
To find out how physicians can best make this decision, I spoke to leaders of several prominent MBA programs and to physicians who have graduated from them. The experts are:
- Dr. Howard Forman, professor of management and public health at Yale University and a practicing diagnostic radiologist.
- Susannah Gawor, director of graduate business programs in medicine at Indiana University’s Kelley School of Business.
- Mercy Bradley, director of health management programs at Florida International University’s (FIU’s) Chapman Graduate School of Business.
Going back to school is a big commitment for practicing doctors, in terms of both time and money. If you are a private practice physician, here are the key considerations you should make when deciding whether to invest in a healthcare MBA:
Who is it for?
Healthcare MBA programs are best for physicians who already have several years of experience practicing medicine, and want to know how to run their practice better. Bradley’s students, for example, are required to have at least four years of clinical experience in order to enroll. Forman notes, however, that an MBA is unique among college degrees in that it can be done—and can be valuable—at many different points in one’s career.
“I’ve had attending physicians do our full-time MBA program while they were still practicing, and I’ve had… physicians practicing full-time while they were doing our Executive MBA program,” he says. “I’ve seen physicians do the program when they’re 28, and I’ve seen physicians do the program when they’re 62.”
An MBA is also ideal for physicians who aspire to the administrative side of healthcare: for example, managing a clinic or hospital. This degree can provide the foundational business, operational and financial knowledge essential for such positions. “The people who come to our program are the folks who want to move up in an organization or want to switch positions, and feel they need that extra expertise,” Bradley says.
She also notes that as physicians—especially surgeons—get older and become less mobile, efficient and precise, they frequently transition into managerial and administrative roles that require less hands-on work. An MBA is a good way to prepare for later-stage career changes.
Joint MD/MBA programs (such as the one Forman heads at Yale) allow students to get an MBA in one additional year while also attending medical school. Sabharwal notes, however, that while combined MD/MBA programs can streamline the learning process for physicians-in-training, the knowledge may be difficult for them to retain without a practical application.
“It’s not a good move for people who are straight out of medical school, in residency or just starting to become a practicing physician,” Gawor says. “You need to get in the marketplace, you need to learn your industry and you need to get that real-world experience outside of medical school… so that what you learn within the MBA classroom, you can truly apply.” But she adds that what you learn is applicable to every specialty: there’s no one field in which an MBA is more or less valuable.
What are the key benefits?
Physicians are smart, capable people with strong clinical backgrounds and a body of knowledge that’s endlessly useful on the operating table or in the exam room—but this knowledge doesn’t always translate well to the boardroom.
“It is a rare physician who actually has any business or economic background,” says Forman. “Yet every day in their practice, they’re confronted with… decisions that are best informed by having some sort of fundamental understanding of those spheres.”
An MBA gives physicians that understanding, and equips them to make well-informed business decisions. It allows them to communicate effectively with other decision-makers and provides the vocabulary they need to participate in boardroom conversations. “It gives physicians an additional skill set, and a different mindset with which to think,” Sabharwal says.
Bradley agrees that MBA programs provide physicians with a useful new framework for the way they think about their practice. “The more medicine becomes a business, the more [physicians] need to understand the things that affect them,” she says. “They need to understand Medicare and Medicaid, reimbursement, the implementation of IT systems, budgeting, contract negotiations… they need to think in terms of cost reductions and efficiencies.”
Indeed, notes Forman, healthcare as an industry is extraordinarily complex. It requires a deep understanding of not only health and medicine, but also of policy, technology, economic management, finance and more. “It demands… leaders who are capable of managing complex problems and coming up with complex solutions that will improve delivery access and reduce costs within the healthcare sphere,” Forman says.
In other words: the business of healthcare requires a depth of knowledge that only an MBA can provide. While a traditional MBA program can provide the foundational knowledge physicians need, a healthcare-focused program also provides important insights into the health system. This helps doctors understand the real-world situations and specific policy issues they encounter day to day.
What are the biggest challenges?
My experts agree that the time commitment is the single biggest challenge physicians will face when deciding to pursue an MBA.
“All physicians are going to tell you, they have zero free time,” says Gawor. “There are so many pressures on them; to maintain accreditation, board certification, to see more patients… That’s going to be the biggest challenge: how to fit it in and how to prioritize it.”
Sabharwal agrees: “The biggest challenges in pursuing an MBA are making the commitment to time for studying, and balancing this with a full-time job as well as possibly a family.”
Attending physicians often have to consider the needs of others in their practice when making the decision to go back to school, too. Forman points out that doctors must get their partners and office staff to buy into the new scheduling arrangements before making a commitment. Those in certain specialties, such as surgeons, may not be able to complete a full-time MBA program while practicing.
No matter who you are, going back to school after being out for a long time is challenging, Bradley says. She notes that older physicians in particular may “underestimate the amount of work required,” and often struggle with the quantitative side of the program, such as accounting and finance courses.
Of course, university staff understand the pressures physicians are under, and try to tailor their programs to work with doctors’ demanding schedules. FIU’s program, for example, meets on Saturdays; they also have an online program. Gawor points out that the Kelley School of Business’ program is a hybrid curriculum, combining both online and in-residency learning. And Yale’s Executive MBA program holds class on alternating weekends, allowing physicians to still practice full-time while earning their degree.
What do these programs focus on?
Typically, a healthcare MBA teaches you everything you would learn in a regular MBA program, but in conjunction with healthcare concepts. “We’ve got finance, management… and the health policy side is really important,” says Bradley.
Yale’s program, Forman notes, is not a healthcare-specific MBA—but after meeting the core MBA requirements, students in the full-time program can take as many healthcare courses as they want. And in the Executive MBA program, he says, “about 25 percent of the program is at least loosely, if not firmly, attached to healthcare.”
The Business of Medicine MBA at the Kelley School of Business, Gawor says, spends the first year covering the core business topics physicians need to learn: finance, marketing, management, leadership, statistics and more. But in the second year of the program, they focus on a variety of topics that change according to the most pressing current issues in healthcare: for example, care coordination, clinical integration, medical technology evaluation and performance management. Students are instructed to take the core skills learned during their first year and apply them to solving these problems in the classroom.
“We’re not trying to make physicians into CFOs or even CEOs,” Gawor says. “We’re trying to make them into physician executives who are empowered to make the decisions they need to make.”
All of these programs are experiencing growth in demand and enrollment, too. Many people have realized that healthcare is essentially a recession-proof industry, and interest in healthcare has grown partially due to the availability of employment opportunities, Bradley explains.
The Affordable Care Act (ACA) has also brought healthcare to the forefront of the national discussion for doctors and patients alike. “I think it’s highlighted for everybody just how important healthcare is as an industry,” Forman says. The uncertainty the ACA has created for physicians and the desire to be better prepared for the changes it will continue to bring is another driving factor behind enrollment, notes Gawor.
How can getting an MBA improve the functioning of your practice?
Private practice physicians need every possible advantage in a healthcare market that is becoming increasingly corporatized, Gawor says. They need the business acumen, management skills, marketing capabilities and financial knowledge necessary to compete with large hospital chains and corporate healthcare organizations—and physicians without those tools are at risk of having their practices swallowed up by larger, more powerful businesses.
Without formal training, physicians may be unaware of the financial intricacies involved with running a practice—and therefore, may be unaware of ways in which they could deliver care more affordably and efficiently. Sabharwal notes that understanding financial calculations was one of the greatest benefits of his MBA education: “The applications of what [physicians learn] may help improve the quality of care they deliver, and at the same time, reduce costs.”
Forman agrees that financial knowledge is key. “I considered myself reasonably well-versed [in finance] by the time I enrolled in the program,” he says. “Immediately, within three months, it completely changed the way I think about everything in my life, but most importantly healthcare.” This financial training, Forman adds, helped him raise salaries and close departmental deficits during his first few years of employment at Yale.
Marketing is another field in which physicians tend to be inexperienced. The marketing and communications coursework that is typically part of an MBA, says Bradley, can help physicians learn how to attract more patients and retain their business through a better customer service experience.
Strategy and operations are a few other spheres of learning that can really make an impact on how physicians run their practices. “I can’t stress enough the importance of organizational behavior and strategic management,” says Sabharwal. Forman also notes that the MBA program improved his ability to manage complex systems, equipped him to make better operational decisions and boosted his knowledge of competitive strategy.
Bradley says that the management skills gained in an MBA program can help physicians conduct day-to-day business more efficiently, decreasing wait times for patients and making for happier customers. And according to Gawor, leadership skills are key. “Healthcare will truly grow if we make physicians our leaders,” she says. “[Our program] empowers them to be the leaders within the industry.”
So, if you are a private practice physician who has been in business for some time, consider pursuing an MBA. Not only can it help you make more money—it can also help you gain a deeper, more comprehensive understanding of your practice and your industry as a whole. Whether you like it or not, healthcare is a business: wouldn’t you like to know how to run your business better?