Is an MBA right for you?

Medical Economics Journal, Medical Economics November 2021, Volume 98, Issue 11

As medicine grows increasingly corporate, doctors are finding that career advancement requires understanding the business side of the profession

Although it’s been 30 years, pediatrician Maria Chandler, M.D., MBA, can still recall when she realized she needed to learn about the business of medicine. Soon after landing her first job, with TCC Family Health in Long Beach, California, she told the clinic’s CEO she wanted to gain some administrative experience. The CEO responded by asking Chandler to attend some committee meetings of the hospital with which the clinic was affiliated.

“I was shocked at how physicians were regarded, as if we didn’t know anything about the business side,” she recalls. “So I decided that if I want to be a leader and fight for physicians I’d better do something about this and get an education. I’m going to come to the table with the same credentials [hospital administrators] have and then they’ll have to listen to me.”

Chandler enrolled in an MBA program at Pepperdine University’s satellite campus in nearby Irvine, taking classes two nights a week while continuing to work full time. Four years later, she emerged with a degree — and a better grasp of the challenges the hospital faced.

“I realized those administrators knew what they were talking about,” she says. “At the same time, I found I was being treated with more respect at the business meetings and I have been ever since. I couldn’t be happier I got that degree.”

Moving beyond the business basics

Doctors have always known that practicing medicine includes a business component; they can’t treat patients unless they earn money. But when most physicians practiced independently or in small groups it was enough to know the basics of practice finance and hire a practice manager and/or accountant to look after the rest.

As medicine grows increasingly corporatized, however, more doctors are finding that being able to read a balance sheet or profit-and-loss statement is no longer enough. Whether they work for a hospital system or own an independent practice, they are realizing they need to understand the language, concepts and skills taught in MBA programs to be able to advocate for their patients, advance their careers — or just remain in business.

“You can’t do health care without the business piece, just like the business piece can’t exist without the clinical,” says Timothy Switaj, M.D., MBA, a U.S. Army colonel who oversees health care delivery for Army and Air Force personnel in the San Antonio region.

While the number of doctors with MBA degrees is unknown, several signs point to a gradual, though uneven, increase in interest among physicians in obtaining both degrees. For example, there were fewer than 30 joint M.D./MBA programs operating in 2000, according to a study in the American Journal of Managed Care®. That compares to 60 such programs now listed on the Association of M.D./MBA Programs website. In addition, 14 schools offer joint DO/MBA programs.

The Association of American Medical Colleges reports that the number of graduates from combined M.D./MBA programs rose from 61 in 2003 to 148 in 2016, a 142% increase. But after peaking at 974 in the 2017-18 academic year, enrollment in these programs dropped to 644 in 2020-21.

The paths to an MBA

Physicians generally take one of three paths to an MBA degree. The first is by enrolling in a full-time MBA program while also practicing full time, as Chandler did. A second path is to obtain an MBA at the same time as a medical degree through a program operated jointly by a medical and business school, where students alternate between the two.

Joint-degree students at the University of Southern California (USC), for example, begin by taking two or three years of classes in the Keck School of Medicine followed by a full year of classes at USC’s Marshall Business School. The rest of their time at the university is spent completing their credit requirements for both degrees.

Independent medical schools, or those that are part of a university without a business school, sometimes will offer joint degree programs with a nearby one. Students at the Philadelphia College of Osteopathic Medicine (PCOM), for example, can take MBA classes at Saint Joseph’s University’s Haub School of Business.

The third approach to earning an MBA is through an executive program. Unlike a full-time program, executive MBA programs are geared more toward working professionals, with most classes held on weekends. That’s what appealed to internist Darren Sommer, DO, MBA, when, after five years as a hospitalist at a regional medical center in North Carolina, he enrolled in the executive MBA program at Duke University’s Fuqua School of Business. Students attended weekend-long classes at Fuqua every other weekend for two years and did coursework on their own in between.

“It was a great experience because I was directing the hospitalist program and I could come back and implement some of the things I learned in my classes right away,” he recalls. “The other good part was that I was interacting with people from all over the country who had similar backgrounds and challenges to what I was facing so we were able to learn from each other.”

Like many other professionals who return to school, Sommer found it challenging to balance the demands of coursework with job and personal life — in his case, a medical practice and a family that included three small children. “It’s kind of funny, because when you’re doing it it’s like, I never knew I could cram this much stuff into my life, but you find a way to make it work,” he says.

The pros and cons of a dual M.D./MBA degree

Each approach to obtaining a management degree at the same time as earning an M.D. or D.O., or while already in practice, has benefits and drawbacks. One advantage of joint programs is that students usually can complete the MBA component in less than the two years required in most stand-alone MBA programs. At USC, for example, students take only 48 credits rather than the normal 63, says Evan Bouffides, assistant dean and director for MBA admissions at the Marshall School.

“In a sense, any dual-degree student cuts short the amount of time and cost by one full year compared to students who pursue the two degrees independently of each other,” he says.

Italo Subbarao, DO, MBA, dean of the College of Osteopathic Medicine at William Carey University, says earning the degrees simultaneously (through the PCOM/Saint Joseph’s joint program) enabled him to understand systemic trends in health care better than many of his colleagues when he began practicing.

“It was a time when things like managed care and hospital consolidation were coming into play, and because of my MBA I could see what was coming next and started thinking about things like value-based care and quality outcomes,” he says. “The MBA allowed me to see these things a little sooner than the people around me.”

Studying for an MBA can also better prepare medical students for residency, Subbarao says. “You look at residencies a little differently because you have a better understanding of the system you’re about to enter,” he explains. “You might find a program you’re better aligned with because of what you learned through your MBA program.”

On the other hand, getting an MBA after being in practice a few years can yield more immediate benefits, say those who’ve chosen that route. “I think physicians who do executive MBA programs have a much richer experience because they’re able to implement some of the concepts they learn right away,” Sommer says.

Todd Shaffer, M.D., MBA, a family practitioner at the Truman Medical Center in Kansas City, decided to get a business degree in 2004 after being named residency director for the University of Missouri-Kansas City School of Medicine, which is part of the Truman Center.

Shaffer enrolled in a program at Rockhurst University that included practicing physicians and residents as well as medical students who were pursuing a joint degree. He noticed a difference between the two groups, especially in the projects students developed and worked on as part of their coursework.

“We [doctors and residents] were using our projects in our clinical settings as we were doing the course,” he recalls, “whereas the medical school students didn’t have the experience to use what they were learning, and if you don’t get to use something right when you learn it you tend not to remember it, versus if you learn something today and use it tomorrow, it’s probably going to stick with you.”

Shaffer found the program’s focus on developing leadership skills particularly useful. “We spent a lot of time figuring out what kind of leader we were. That was very useful because it helped me figure out what I’m good at and not so good at, then how to get better at some of those things,” he says.

Reasons for getting an MBA

While physicians and program administrators cite a variety of reasons why doctors obtain MBAs, they generally fall into three broad, often overlapping categories: to improve their management skills, to advance in an organization and to gain a better understanding of health care policy. The latter was Sommer’s motivation for seeking the degree.

“It was during the debate over the Affordable Care Act, and I had some pretty strong opinions about it,” he recalls. “But when I’d go to Washington to talk to congressmen, I quickly realized that having a medical degree wasn’t enough to participate in the debate. I needed a better business and policy understanding of health care to make my arguments more effective.”

Switaj credits the MBA and MHA degrees he earned through the Army-Baylor Graduate Program in Health and Business Administration with advancing him from chief medical officer at an Army community hospital to his current position as director of clinical operations and chief medical officer (CMO) for the Army’s San Antonio region.

“I always knew I wanted to get into a physician leadership role where I could explain the business piece to the clinicians and the clinical piece to the administrative staff,” he explains. “I was able to do that at lower levels, but when I got to the CMO level I realized I had a knowledge gap I would need to fill if I wanted to move up.”

Switaj says the skills he learned in the Army-Baylor program enabled him to better align the Army’s primary care resources in the San Antonio region with the places they were most needed. He also became proficient at using the spreadsheet program Excel to present data. “When I have to answer questions from my superiors or explain things to my staff, the ability to organize and interpret data and create charts and tables so they could better understand the data has been a masterful tool.

“I don’t think at any level you can completely separate yourself [as a physician] from the business side,” he adds. “Having the MBA provides that ability to speak the same language and help you better understand why some decisions are made, even some you may not agree with.”

A third reason doctors obtain MBAs is to better understand the management side of their own practice. That was the goal of Nathan Granger, M.D., MBA, when he enrolled in Rockhurst’s part-time MBA program in 2005. A decade earlier, Granger had co-founded Clay Platte Family Medicine Clinic in Kansas City and realized he needed more than on-the-job training to keep up with the rapidly growing practice’s needs.

Having an MBA, he says, helped Clay Platte in a variety of ways. The human resources and organizational behavior knowledge he acquired enabled the practice to identify and hire an administrator that matched its needs, ending the churn it had experienced at that position. “Normally for a small practice to hire a high-quality administrator is very difficult,” he says.

With the financial understanding he gained, Granger was able to prepare and present monthly updates on Clay Platte’s finances, a practice he continues to this day. He now also chairs the finance committee of the clinically integrated network to which Clay Platte belongs.

But the most important takeaway from his MBA experience, Granger believes, was to broaden his perspective on what it means to be a doctor. “I came to see that physicians don’t just have a responsibility to an individual patient,” he says. “We also have obligations to the health of our communities. That’s a basic tenet of being a physician.”

Granger’s MBA helped him meet those obligations by learning to work within and lead the network of doctors, practices, hospitals, payers and other organizations behind the treatment of an individual patient. “Being able to work with all the different players in the health care system requires leadership,” he says. “And what better person to provide that than a doctor with an MBA?”

The case against doctors getting MBAs

While many doctors with MBAs say they have benefitted from getting the degree, not everyone thinks it’s a good idea. David Zetter, CHBC, CPC, principal of the practice consulting firm Zetter Healthcare, goes so far as to call it “a waste of money.”

“An MBA will teach you about management, but it doesn’t teach you how a medical practice is run,” he says. “There are too many things that happen in a medical practice that have nothing to do with courses taught in an MBA program.”

He cites revenue cycle management as an example. “It’s the most important aspect of a medical practice but they don’t teach anything about billing, collections, follow-ups, what are the best policies and procedures. None of that is ever discussed in MBA programs.”

Getting an MBA also creates the potential for conflict with practice administrators. “I’ve got a situation now where the practice administrator is butting heads with a doc [with an MBA] who keeps sticking his nose in,” he says. “It’s gotten to the point where one of his partners said ‘why don’t you quit being a doctor and become our administrator if you think you can do it better?’”

Zetter acknowledges his biases stemming from his own work as a practice consultant and his position as president of the National Society of Certified Health Care Business Consultants. “I’m not saying all MBA programs are bad, but you have to do due diligence,” he says. “Ask yourself, ‘Why am I taking this program?What do I expect to do with an MBA degree?’ And ask other doctors with MBAs what specific aspects of their practice do they better understand because they got that degree?”

He adds that doctors, even those with an MBA, should not try to run the business side of their practice. “You’ve gone through 13-plus years of school to become a clinician and generate revenue. If you’re going to spend time also being an administrator you cut down on the time you can generate revenue,” he says. “So do you want to see patients and generate revenue or do you want to be an administrator? Because you can’t do both.”