By: Steph Weber Running a successful solo practice today requires an increasing amount of business-savvy, but is an MBA necessary?
By: Steph Weber
Running a successful solo practice today requires an increasing amount of business-savvy. In an era where independent physician practices are competing against larger healthcare conglomerates, retail clinics, and more, any advantage is welcomed. For some, a Master of Business Administration (MBA) may provide that competitive edge.
Here's how an MBA can be helpful as well as alternative resources when another degree isn't an option.
"Historically, physicians have pursued MBA programs to learn leadership, management, and other critical business skills not gained in medical school," said Stephen Klasko, president and CEO of Philadelphia-based Thomas Jefferson University and Jefferson Health. "But shaping individuals who can navigate the highly ambiguous and evolving healthcare landscape requires even more specialized training that will foster critical, game-changing thinking."
A good MBA program offers that training. Klasko, who is designing a unique online MBA healthcare pathway for Jack Welch Management Institute, says the goal is for physicians to determine how they wish to deliver healthcare within their practice. Then, the MBA coursework can be used to figure out how to achieve those goals while still maintaining key personal and professional values. "For a physician, an MBA is an opportunity to understand and lead the changes in healthcare delivery today," said Klasko. "We are seeing changes greater than anything we’ve seen in our lifetimes and every one of these is a challenge - and an opportunity -for a small physician office."
As payer contracts become more complex, graduate-level courses can offer additional insights and understanding. "An experienced MBA with a healthcare background could be helpful in understanding the nuances of the insurance business and how to negotiate a favorable contract," said Elliot Hirsch, a board-certified plastic surgeon in Los Angeles, Calif.
Moreover, the knowledge gained from an MBA program can withstand the test of time, even in an industry plagued by constant change. "Much of what I learned during my MBA over a decade ago still applies today," said Allen Kamrava, a board-certified colorectal and general surgeon practicing in Beverly Hills and associate teaching staff at Cedars-Sinai Medical Center. "Anything with tremendous regulation has constant rule changes, [but] MBA programs teach you how to operate in the big picture."
Success without an MBA
MBAs certainly offer distinct advantages. However, many independent physicians have found success without the degree.
While the coursework covers general business knowledge, physicians are finding that more extensive expertise is what's really needed. "When starting a practice, you need an accountant, lawyer, webmaster, biller, medical assistant, and front-office [staff]," said Hirsch. "Having an MBA [provides] general knowledge of each of these areas, but the specialists are still needed to set up a corporation, keep financial records, etc." Hirsch suggests that an MBA program is better-suited for larger, more developed practices juggling multiple ventures.
Angus Matheson, a family medicine physician in Willits, Calif., says that running a successful independent practice has become increasingly complex. Today, physicians need to acquire a range of deeper knowledge, including interpreting profit and loss statements and complying with human resource and OSHA regulations, for example. He believes that MBA programs, on top of medical schools, miss the mark for solo physicians. "Medical schools and residencies could have taught the core competencies of running a medical practice, [but they] are run by academics who don't have a sense of what the independent practitioner needs," said Matheson. "I don't think an MBA [program] would have taught those skills any better."
This inability to address the areas most important to solo physicians is another common shortfall. "Most graduate business degrees focus on medicine in regards to healthcare management on a large scale," said Kamrava. "My graduate business courses taught almost nothing that pertains to a small practice."
For physicians who choose not to pursue an MBA, there are plenty of resources to fill any perceived educational gap.
Colleagues are often the most logical first stop. Hirsch relied heavily on the knowledge and wisdom of more experienced physicians when starting his practice. Now a year later, he continues to lean on those same physicians for ongoing support.
Practice consultants can also bridge any deficiencies. "A practice consultant can advise on issues like corporate structure, whether a sale is a good deal, and how to share costs," said Klasko. Additionally, consultants can be hired for specific tasks, such as social media marketing or human resources.
The internet brings a seemingly endless source of educational opportunities. Kamrava utilizes news aggregators to collect and sort online articles about several topics of interest, including entrepreneurship and search engine optimization. Physician-run blogs can provide a wealth of information as well.
Meanwhile, Matheson remains hopeful that medical schools and residency programs will eventually offer a more developed business curriculum for physicians pursuing independent practice. "The business has become so complicated [that] solo practitioners feel they can't do it," he said. "Teaching the business of medicine would help doctors remain independent, so that they are governed by the best interest of patients and not a corporate overlord's spreadsheet."
Steph Weber is a freelance writer hailing from the Midwest. She writes about healthcare, finance, and small business, but finds her passion for the medical field growing in sync with the ever-changing healthcare laws.