American College of Physicians: Internal Medicine — Doctors for Adults ®

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For business-savvy physicians, it's back to school

From the September 1996 ACP Observer, copyright 1996 by the American College of Physicians.

By Deborah Gesensway

Donald S. Furman, MD, enrolled in business school this spring to become a better doctor.

An internist and gastroenterologist in Brea, Calif., near Los Angeles, Dr. Furman decided to devote two years of his life (and nearly $50,000 for tuition and supplies) to an intensive executive MBA program at the University of California, Irvine, Graduate School of Medicine not because he wants to change careers, but because he wants to have more of a say in how he will continue to see patients. His studies come on top of full-time practice.

Only three years ago, Dr. Furman was part of a typical group of internal medicine subspecialists; today he is one of 400 doctors of the CareMore Medical Group, which is affiliated through a jointly owned management services organization with Downey Community Hospital. They even started marketing their own Medicare HMO insurance plan. Now, Dr. Furman wants to know if the integrated delivery system his group is now part of is on the right track. Does the marketing plan make sense? How can you motivate employees in a large organization? Are there better ways to structure the board?

"I decided to [go to business school] because doing nothing would have meant consigning myself to insignificance," he explained. "I have another 20 years of practice ahead of me."

From California to Florida, physicians are flocking to business management courses like never before. Organizations long known for their medical management educational offerings, such as the American College of Physician Executives and the Medical Group Management Association are filling their day- and week-long courses. Doctors who find that an accounting class here and an organizational behavior book there only whet their appetites can select from a growing number of degree-granting programs—ranging from MBAs and MPHs to certificates in medical management. Dr. Furman, for example, has enrolled in an executive-style MBA program at Irvine designed for students who need to continue working full-time while studying for a graduate business degree; it is one of the few in the country designed specifically for people in the business of health care.

According to the AMA, the number of physicians identifying themselves as working primarily in administration topped 15,600 in 1994, up by more than 1,000 from the previous year. And this doesn't include the thousands of other physicians who are discovering that hours of new administrative responsibilities requiring sophisticated management expertise have fallen into their laps over the last few years, even if they didn't want them.

Thinking like a businessperson

Maybe you need help reading the monthly balance sheet. Which cost reports do you need your accountant to do? There must be a way to negotiate a better managed care contract. Is your physician-hospital organization making unwise decisions? And what about information systems? A strategic plan?

"Physicians are faced with business decisions everyday," said Marion Hill, PhD, program director of a physicians-only executive MBA program at the University of South Florida's College of Business Administration in Tampa. "If you don't make these decisions, somebody else is going to make them for you."

And although that has been true for most practicing physicians since the days when it made business sense to accept a chicken in lieu of cash, the difference in hanging out your shingle today compared to the old days of private practice is managed care, for-profit health care systems, Medicare auditors, capitation, cost-centers and oversupply. For many, it is no longer as easy to pick it up as you go along, and seat-of-the-pants-style management might not be enough.

If the physicians who enroll in her University of South Florida program enter describing themselves as "healers," Dr. Hill said, they leave viewing themselves as "businessmen-healers—because if you don't adopt that perspective, you aren't going to be able to stay in business as a physician."

One recent graduate, for example, discovered only by taking business courses that his long-trusted business manager had been embezzling money from the practice for years. Another described to classmates how her accountant started attacking the practice's books more rigorously than ever before—and finding savings that he had previously neglected to mention—simply because the physician mentioned she was working on her MBA.

And perhaps more importantly, said Andrea Rossiter, vice president of professional development at the Medical Group Management Association, physicians who understand business principles usually end up serving as better partners with their office managers or practice administrators.

"There are any number of decisions that have to be made in a practice in which the physicians need to become informed decision-makers, not just operating from the gut or their own subjective viewpoint, but from accepted management practices or principles," Ms. Rossiter said.

Basic skills set

So what skills do physicians need to become better managers? What would be a core curriculum, so to speak, for a businessman-healer?

A basic set of skills for physician-managers would include accounting, budgeting, human resource management, strategic planning and perhaps also marketing, negotiation, communication and organizational theory, according to the experts. But doctors might want to keep in mind that just as the practice of medicine has been changing, so too has the theory of management, said Roger Schenke, executive vice president of the Tampa, Fla.-based American College of Physician Executives. "Traditional management roles—where people were hired basically to watch other people—are going away. Management now means managing process rather than managing people."

That means, he said, to be effective administrators, physicians today need to know more than the basics of marketing and finance, but also be familiar with theories and practices of managed care, how to develop an information system and how to manage the health of populations.

To learn finance or to improve negotiation skills, physicians can seek out courses at any community college or local university. If you want to try to pick it up on your own, Mr. Schenke said, good texts to try are "Essentials of Accounting," by Robert Anthony, and "Getting to Yes," by Roger Fisher and William L. Ury.

George E. Linney Jr., MD, of Charlotte, N.C., a pediatrician who now works as a consultant and physician-executive recruiter with Tyler and Co., suggested brushing up on communication skills like the ability to listen and talk to people, persuade them and lead them. After all, he said, being a manager means "you have to figure out how to get work done, get things accomplished, through people rather than through yourself. That's a big shift for most physicians to make."

In terms of human resource management, Ms. Rossiter said physicians frequently find their work lives improve when they have in hand a few standard tools for managing employees. These include how to write job descriptions, interview, set up performance standards and read difficult situations, she said.

At MGMA, she said, "we are not trying to turn [physicians] into businessmen and women, but to get them up to speed on all the business issues that they are being forced to address these days."

Most health care business experts recommend that physicians looking to improve their management skills take a few classes before committing to a degree program. If you're serious about changing careers, however, physician-executive recruiters are more likely to be searching for physicians who also hold MBAs, MPHs and other master's degrees, such as those in health administration, medical management or public administration.

"Five years ago when recruiters came to us, they said find us someone who's good," said Mr. Schenke of the American College of Physician Executives. "Now they say, degree preferred. Five years from now, they are going to say, degree required."

Said California's Dr. Furman, "Physicians, for the good of themselves, and for the good of the patients and maybe even the country, have to be able to communicate effectively with all the players in health care, and the only way they can effectively do that is to understand the business of health care. ... You don't learn that in medical school."


Brushing up on business administration

So, you want some training in business administration? The following organizations offer classes specifically geared toward the needs of physicians and other health care professionals. Local universities and community colleges also usually offer business curricula.

American College of Physician Executives (800-562-8088)

ACPE began 21 years ago as an organization for medical directors and has since branched out to represent physicians in all kinds of management positions. ACPE offers an extensive catalogue of courses, ranging from one-on-one programs in communication skills and business writing to day-long and week-long "Physician in Management" seminars.

In conjunction with Tulane University in New Orleans, ACPE offers a certificate in medical management program and a master of medical management degree.

Medical Group Management Association (303-397-7869)

MGMA, a 70-year-old organization of medical group managers—practice administrators, office managers and physicians in management&3151;offers a series of courses (called The MED Series) on everything from the fundamentals of financial accounting to legal issues in health care. The courses are offered on-site for large groups or professional societies around the country.

MGMA also runs a week-long "Leadership Institute" in conjunction with Northwestern University's Kellogg Graduate School of Management in November. It co-sponsors an MBA in Medical Group Management with the University of St. Thomas in Minneapolis.

American College of Healthcare Executives (312-424-2800)

Among ACHE's dozens of seminars and conferences offered throughout the country are a number of seminars and self-assessment programs aimed at improving mangagement skills, including administrative communication skills, teamwork and mentoring.

Several other universities offer MBA programs specifically geared toward physicians and health care issues. They include the University of South Florida College of Business Administration (813-974-2615); the University of California, Irvine, Graduate School of Management (714-824-5374); and the University of Missouri, Kansas City, Henry W. Bloch School of Business and Public Administration (816-235-1478).

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