Do you need an MBA, or are there alternatives?
■ A column about keeping your practice in good health
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The American College of Physician Executives says that at any one time, at least 2,000 physicians are enrolled in its affiliated master's degree-level programs to improve their business and management skills. The number of physicians who are returning to the classroom to get physician executive MBAs has spiked in the past couple of years, as has the number of medical students who are pursuing a combined MD/MBA degree. Other doctors are getting advanced business degrees from programs that cater to the general student.
Does that mean that every doctor needs a business degree?
Experts say that physicians who want to become more business-savvy aren't hurt by seeking an MBA. But they also say that doctors who want to learn how to manage their practice better have other, less-expensive and time-consuming options.
"I'm not sure the MBA program is worth the expense for a solo practice physician whose sole goal is to better their practice. Maybe seminars are a better mix," said Chapel Hill, N.C., orthopedic surgeon Selene G. Parekh, MD, who co-authored a study on the effect of MBAs on physicians' careers.
The advanced degree, experts say, is best for those doctors who want to take a leadership role in health care, move into the business world or have some entrepreneurial bent beyond the everyday work of their practice.
"An MBA program will introduce you to some accounting, but it won't teach you how to balance your books. It will teach you concepts in marketing, but not how to go out and sell yourself," said Francine R. Gaillour, MD, executive director of Physician Coaching Institute in Bellevue, Wash. Dr. Gaillour has an MBA.
Advanced-degree business and management programs tailored for physicians emerged during the 1990s.
Interest was driven by such trends as health plan mergers, reduced reimbursement, hospital and practice mergers, and other changes that experts say made everyday business skills much more essential for physicians. In 1995, Tufts University School of Medicine in Boston was the first to introduce a combined MD/MBA study track, and now at least 50 medical schools have one, according to the Assn. of American Medical Colleges.
Dr. Parekh, an assistant professor of orthopedics at the University of North Carolina School of Medicine and the holder of an MBA, reported in the February 2007 Journal of Bone and Joint Surgery that physicians' most common reason for seeking an MBA was "learning about business aspects of the health care system." That response was given by two-thirds of 161 MBA-holding physicians who were surveyed.
"Physicians need to make more business decisions," he said. "With an MBA, they can make more well-informed business decisions."
One decision these doctors tended to make was to spend less time treating patients. That wasn't a big surprise, since "finding a more interesting job" was the second most common response to Dr. Parekh's question asking why they had enrolled in MBA programs.
Prior to enrolling in business school, physicians spent an average of 58.3% of their time on patient care. After graduation, that number fell to 31.8%. Before enrollment, the surveyed doctors spent 11.8% of their time on administration. After graduation, that number went up to 33.5%.
Steven Shu, MD, a family physician in Crystal, Minn., enrolled in the University of Tennessee's year-long physician MBA program with a mind toward expanding his business. Three years after his 2005 graduation he opened a new family medicine/specialty care clinic. He also is making plans to open a procedure institute where he would teach other physicians how to perform colonoscopies, endoscopies and other procedures.
Dayton, Ohio, pain management specialist Amol Soin, MD, received an MBA in 2007 with an eye toward opening a pain management clinic and developing related software.
"Having an MBA helped me when I went to the bank. I was able to show them a business plan that I helped develop and provide my expected return on investment. It was a slam dunk to getting the financing I needed," Dr. Soin said.
Still, he concedes the physician MBA program may not be for every physician, and advises doctors to do some soul-searching before deciding what form of business education they want and need.
"You need to know what your goals are and pick a curriculum that suits them. If your goal is health care administration, for instance, there are other programs with a more administrative emphasis," he said.
Dr. Gaillour said there are better, and less expensive, resources for physicians whose only objective is to better run their practice: seminars run by various medical associations, management programs available at community colleges, and nine-month business certificates offered by some universities.
For example, Tennessee lists its MD/MBA program as costing $59,000 for one year, and requiring 24 hours per week of course work. Certificates can run around $7,500; seminars can be less than $100.
Kenneth Hertz, spokesman for Medical Group Management Assn., warned that getting an MBA should not preclude physicians from having a practice manager or someone else to help with day-to-day operations.
"Getting an MBA is helpful to a solo practice physician, but I would caution against a physician getting a degree, then taking over everything in the office," said Hertz. "It is critical to understand the distinction between governing a practice and managing a practice."