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Tue 2 Oct 2007 04:00 AM

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Dr business

From MD to MBA; why the business of medicine is sending the region's physicians back to school for business skills.

From MD to MBA; why the business of medicine is sending the region's physicians back to school for business skills.

When Dr Ken Ouriel was named CEO of Sheikh Khalifa Medical City, Abu Dhabi, earlier this year, he had been practicing medicine for more than 15 years.

He was chairman of the Cleveland Clinic Division of Surgery, had received the Liebig Foundation Award for excellence in vascular surgical research and had been regularly billed among America's top surgeons. Still, he felt underequipped for the job.

"Ok, I understood the clinical side of things as I'm a vascular surgeon," he explains. "I understood the administrative side through my experience at the Cleveland Clinic; but what I didn't understand was the business."

The department of medicine is a more than $100 million a year operation. You can’t, in due conscience, manage that kind of organisation without general business skills.

Ouriel is one of a growing number of physicians who are realising that an exemplary clinical record isn't the calling card it once was. In a sector faced by shrinking reimbursement, rising expenses and growing competition, sharp business acumen is more prized than ever.

To compete in the top tier, physicians need to match their skills in the exam room to their expertise in the back room. Now, a rising number of clinicians are adding MBA to the letters after their name in a bid to meet the bar.

Ouriel is halfway through an executive MBA in global business run jointly by Columbia and London Business Schools. The course, he says frankly, has had an immediate impact on his daily practices.

"Increasingly, more of what we do requires an understanding of the business," he admits. "Skills I've learnt over the last year have helped me out tremendously."

Managing change

This breed of hybrid managers with clinical expertise is the result of a turbulent healthcare sector, says Mike Stahl, Ph.D, director of the physician executive MBA (PEMBA) programme at the University of Tennessee and co-author of The Physician's Essential MBA: What Every Physician Leader Needs to Know.

The course is the qualification of choice for King Faisal Specialist Hospital, Saudi Arabia, which has, to date, seen five of its physicians graduate from the programme.

"Healthcare has changed dramatically," Stahl notes. "We've seen unprecedented demand for services, the explosion of information systems, the issues of quality improvement, and we still have to deal with the issue of how to pay, who to pay, and how much to pay for these changes.

"Physicians typically don't have the skills to answer these questions."

Universities have been quick to capitalise on this trend, and more are offering MBA programmes tailored to healthcare professionals, including some designed specifically for physicians.

Tennessee's PEMBA programme aims to bridge the gap between medicine and management and students learn from case studies pulled from hospital boardrooms.

It's a customised curriculum designed to help improve the delivery of care within the constraints of the marketplace. "The theme is physician leadership. We take the subjects you would find on a typical MBA course and drive them down to specific issues in the healthcare industry," Stahl says.

As public-private partnerships create larger healthcare organisations, doctors need formal business training to avoid floundering on the financial front. The number of physicians choosing to head back to school suggests clinicians are not taking their managerial duties lightly.

"There is a lot more recognition on the part of doctors that, as physicians, we are being asked to participate in system issues we historically have no background in," says Dr Kevin Schulman, a professor of business administration and director of the health sector management programme at the Fuqua School of Business, Duke University.

"Here at Duke, for example, the department of medicine is a more than $100 million a year operation. You can't, in due conscience, manage that kind of organisation without general business skills."

But the benefits of these additional skills are not limited to the boardroom.

Schulman, whose course has recently expanded to accommodate the increase in physician applicants, believes that lessons learnt from business can be directly applied to improve patient outcomes.

"Healthcare is still a business, which can be optimised towards a general outcome," he says. "There is no reason why those optimisation skills can't bring you an improved outcome on health or efficiency within the organisation."

Fighting back

Ambition aside, industry experts agree that physician executives are typically driven by one of two reasons. Some, like Ouriel, start moving into leadership positions and feel they lack the requisite background. More commonly, their motivation is disillusionment.

Physicians, report Stahl, increasingly feel their hands are tied by red tape, and are searching for a way to regain control of their profession.

"Physicians are sick and tired of not being able to deliver the changes in healthcare they want. They're looking to acquire the knowledge and skills set to fight back."

Surprisingly few physicians see MBAs as a way to jump ship into a non-practising role. It's an accurate assumption, Schulman notes, because the initials alone won't jumpstart your career. "The minority of students are trying to switch careers," he explains, "but it isn't a substitute for experience. The degree doesn't make you a senior partner at an investment firm."

So what are the benefits of a blue-chip qualification and do you need one? If you need to ask, says Ouriel, chances are the answer is no.

"I don't think - not by a long shot - that every physician needs an MBA," he stresses; "Only those who are really going to get involved in the high-powered financial analysis."

While all physicians should understand the basics of business- such as how reimbursement systems are structured, outlining a budget, and how to understand a financial statement - there are less time-consuming courses available to teach them.

"The average physician who wants to manage a practice, or manage a department with 10 or 12 doctors; they need courses in management in medical school," Ouriel advises. "Tackle it like any other knowledge gap you have in clinical practice."

But for physicians with their sights set firmly on an MBA, make no mistake; it's a gruelling degree. Expect to interrupt your career, disrupt your family, and invest a substantial amount of money in the process.

Even courses tailored for practicing physicians demand a significant amount of time, and nearly all require some degree of face-to-face learning. Ouriel recommends considering carefully whether you can devote the time required to complete the course successfully. "It's certainly challenging," he admits. "I have a day job where I'm working 14-hour days, and I need to add four hours to that to incorporate my course demands. I'm learning to sleep less!"
Knowledge is power

Dr Fatih Mehmen Gul is a Saudi-based physician. His MBA has equipped him for an executive career that has included setting up air ambulance projects in Saudi Arabia and coordinating domestic and international healthcare projects.

Commenting on his degree, he says; "I gained an overall understanding of the business of healthcare. I became an effective member of the game, rather than just a member of staff."

The industry is looking for leaders to have demonstrated competence in management, and the certification to prove it.

And for those in the trenches, business training provides hands-on practical skills that can be utilised in daily clinical practice. Schulman uses the example of a physician hoping to pitch a new outpatient clinic.

"If you had an idea of how to improve a process, or a new service to offer to patients, how would you go about it? How would you formulate a business plan, and how would you attract management attention or outside investment in order to go forward and bring your idea to your patients?

"With general management skills, you can answer those questions."

The pay-off can be immediate, says Ouriel. One of his first lectures at Columbia dealt with organisational charts. Ouriel used the information he was given to overhaul SKMC's organisational structure, and improve operational efficiency.

"Almost immediately, I was able to talk the issue over with colleagues and come up with a plan that improved how staff reported to each other, and how we divided up departments and divisions," he explains.

Business school is also credited with helping to break down the barriers between medics and managers. In an industry that pays homage to credentials, physician executives report increased kudos from management colleagues who learn they have an MBA. Stahl relays the story of a chief financial officer who was always dismissive of physicians' involvement in the hospital's financial decisions.

When he discovered the chief operating officer was nearly at the completion of his MBA, his behaviour changed. "The CFO recognised that the MD, soon to become an MBA graduate, was in a position to participate in, and influence, financial discussions," Stahl explains.

"Every discipline has its own language. If the people you are trying to influence know you have a knowledge of business, they will attribute more credibility to your opinion."

Equally, for a profession reputed for its ego, management courses can teach physicians to be better team players. According to Schulman, graduates typically come away with a new appreciation for their colleagues.

"Business is a team culture and so [students] are socialised into that. We deliberately bring in people from other aspects of healthcare, so they get some appreciation for their role with the system; something you never get in formal medical training."

Customised courses

Outlining what you want from an MBA will go a long way towards helping you pick a suitable programme. Standard MBAs typically take two years to complete, but many programmes designed for professionals have been condensed to one year, to allow for career demands.

And they often accommodate students' schedules in other ways, such as by offering classes both in person and online. Tennessee's PEMBA, for example, blends four one-week residency courses, with online classes delivered every Saturday. Students are divided into online groups, based on time zones, so they still benefit from class interaction.

While many courses are tailored specifically to healthcare, a number of physicians opt to enrol in generic business programmes, arguing that medicine is too insular already. For Ouriel, whose MBA focuses on global business, the course offered a more varied experience.

"An MBA programme gives you the opportunity to work closely with someone from a different background," he explains. "You understand they are aiming for the same goals you are."

There are pluses and minuses to both styles of course, Schulman acknowledges.

"One of the benefits of not doing the physician-only programmes, is that it doesn't reinforce the idea that there is something special about physicians as a member of the team," he explains.

"[But] without the healthcare piece, you as an individual find you are accountable for the translation. You can lose the thread of how to apply the concepts you are learning."

Physicians may find they struggle on MBA courses typically designed for accountants or bankers, Stahl warns. "The faculty will teach at the level of financiers, because that is who the course is aimed at, and physicians will be at a profound disadvantage."

The opportunity for peer learning is better in physician-only courses, he adds, because students are on the same page.

"Our students have an average of 18 years experience so people understand the issues and examples. You can broaden the theory or principle and it just clicks."

Investing in the future

MBAs are typically two years of commitment, rigorous coursework, and demanding workload - on top of the trials of daily practice life. But they are increasingly a requirement for the upper reaches of the healthcare sector.

Physician leaders, Stahl notes, are no longer elected on clinical skills alone. "The industry is looking for leaders to have demonstrated competence in management, and the certification to prove it."

With a foot in both camps, physician executives are uniquely placed to influence the changes in healthcare. While he admits his bias, Ouriel firmly believes that, as a clinician, he has an advantage over an executive who is a non-physician.

"I've been through the training, I've been in the trenches with these people," he shrugs. "It is clinicians that take care of patients and health outcomes, and I understand what they do day-to-day."

Clinical leadership is set to have a real impact on the direction of healthcare, Schulman promises, by giving physicians the skills to bring to the bargaining table.

"All the things we think are fixed within healthcare; how we're organised, how we're paid; those all seem very final," he explains. "In truth they are all variables and they are all choices. And understanding that you are empowered to advocate for change in those choices is an incredibly powerful idea."

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