Archive for the ‘Business’ Category

Is the MD,MBA Worth It? (Part 3)

Monday, July 15th, 2013

Six years have passed since I began the MBA program and 4 four years since I graduated.  So, after all this time, is it worth it?  The one-word executive summary is…yes.  My previous posts (Part 1 and Part 2) reflect my views when I was in the thick of it and working on completing the MBA program.  Now it is time for further reflection.

7) One of the great benefits of adding the additional letters after your name is that it sends a signal to the market.  Whether you are pursuing an MBA degree or completed one, that information tells the market you are ready for a change and are doing so with serious intentions.  There is a marketplace out there that is constantly looking for new talent.  If you have an MD or DO after your name, then you are probably already on a specific clinical career path.  An MBA degree sends new information about you to the market.  The new information is, “I’m interesting in a different path than the usual one”.  It may or may not involve a clinical career, but at the very least, it will be distinguished by an education in business administration.  There is a market for those equipped with an MD and MBA degree, and that market is very interested in finding you.  This is one way you let it know you are interested in finding them.

8) Just as there is a language for those with an MD, there is a language for those with an MBA (or equivalent business experience).  An MBA gets you a seat at the table and helps you learn how to begin to speak the language of business.  As they say in business school, “If your not at the table, then you are on the table”.  If you want to be engaged in the business of medicine, then you need to be at the table and understand what is being said.  Your interests and those of your patients need competent representation at the table.  All too often physicians think their medical degree will be enough to carry them through discussions with hospital administration.  All too often it is not enough.  Typically my biggest contribution in meetings involving physicians and administrators is in translating what each group is really saying to one another.  It is interesting to observe how two groups can speak a common language (English) and not really understand what one group is trying to communicate to the other during a physician-speak vs. admin-speak conversation.  Being bilingual is an asset under these conditions.

9) There is another business school saying which is, “All roads pass through finance”.  If you want to get anything done, that involves capital resources, then you will need to maneuver it through the budget and finance process.  It doesn’t matter if you are working with your own small business or a multi-billion dollar organization.  At the end of the day someone will need to finance your dreams.  Understanding how that is achieved is key to success.  The MBA degree provides the starter toolkit for helping you understanding the “how” of this process.  It was once pointed out to me that cash-flow is like oxygen.  You can wake up in the morning with all kinds of great plans of what you will accomplish that day, but if you can’t breath, there is only one thing on your mind… “I need oxygen”!  In business, cash-flow serves a similar purpose.  To ignore it is to ignore a fundamental principle of organizational survival.  Being a person who has a strong medical background, is versed in the language of business and skilled in the art of traveling the road through finance makes for a powerful combination to help any organization survive and thrive.

10) When you obtained your medical training, you no doubt realized that there are opportunities for leadership development if you are interested.  When you add an MBA degree to your CV/Resume, you tell the world you are very interested.  It distinguishes you and makes you more visible.  A leader, I know, likes to say, “visibility leads to credibility, credibility leads to trust, so if you want to be trusted, you need to be visible.”  Leadership requires trust.  An MBA degree is not only a way to say you are interested in a leadership position but it can also serve as one of many paths on the journey to becoming more visible.  How you build credibility with this new found visibility is up to you.  The MD/MBA path opens the door.  It really is up to you to take advantage of the opportunities it will present once you go through that door.  So is the MD/MBA worth it?  Absolutely!

The Paradox of Blame

Saturday, May 30th, 2009

Blame, when appropriately dispensed, assigns responsibility for a past occurrence.  The event that occurred is typically one which resulted in a negative outcome.  As in, “Hey, it’s all your fault.  You screwed up.”  The paradox is, there is an interesting opportunity which becomes available when blame is not appropriately assigned.  As in, “Hey it’s your fault.  You screwed up but… (wink-wink everyone knows you really were not the one who screwed up.)”  The general rule is, none of us wants to accept blame, especially when we were not the responsible party.  There is an exception to this rule and that is when everyone knows you really were not the person responsible for the bad outcome.  This is sometimes referred to as, “taking one for the team.”  By accepting blame, you now become the responsible person (and better team player).  The opportunity granted to you for accepting blame is that you can now fix the problem caused by the person who was previously responsible.  If you fail, then it really is your responsibility.  If you succeed you have now earned the right to the new position of responsibility.  Since you were not responsible in the past, you were not in a position of authority to affect the outcome. By accepting blame, under certain circumstances, you can advance to a new position of responsibility.  This assumes, of course, you learned from your predecessor’s’s mistakes and can affect a good outcome. It’s a risky tactic but one that comes with rewards if performed effectively.  The key is to recognize and guarantee the quid pro quo.  In exchange for accepting blame, you will be given the opportunity to correct the problem.  Therein lies the paradox.  Given the choice between blaming the person truly responsible, who has proven they don’t know how to fix the problem, and “blaming” the person who is not responsible, who can fix the problem, blame sometimes tends to find the problem-solver. This is more common when responsibility is distributed to many individuals, and difficult to assign, or when saving face for the responsible person is warranted, for whatever reason.  It’s an odd thing to say but sometimes “blame” is another way of saying opportunity.

Physicians as Hospital Employees

Sunday, September 21st, 2008

Hospital administrators view things differently. One of the primary reasons any firm in any industry (health care included) brings an individual who provides a service or produces a product in as an employee is to reduce transaction costsFirms exist because transactions that occur within them are more efficient than if those same transactions occur outside of the firm.  Once the marginal cost of a physician’s services consistently exceeds the marginal benefit the physician provides to a hospital it is in the hospital’s best economic interest to employ the physician in order to control the costs or improve the benefit. For example, as physician reimbursements decrease and their costs increase they must seek alternative revenue streams or practice efficiencies in order to maintain the same income. With the paltry 1.1% raise coming from Medicare and the July 07-08 inflation rate at 5.6% it is not difficult to understand why this is happening. As physicians struggle to keep up it seems it is inevitable they will lean on hospitals to either boost revenue (stipend for call, reimbursement for uninsured patient care) or cut costs (EMR support, medical office space). These are transaction costs administrators are willing to support in order to keep the hospital doors open. When it is less costly to employ a physician than pay these costs hospitals must as a practical matter move toward employing physicians. It’s an expensive choice but when the alternative is more costly it becomes the best alternative to a negotiated agreement (BATNA).  In order for physicians to remain independent they must be able to generate revenue and decrease costs in a manner that does not make them dependent on the hospital. I don’t claim to know where this will lead to in the coming years but I think as long as physicians squeeze more of their revenue stream out of the hospitals they will ultimately increase the probability they will become employees of the hospital.

The Knowledge Worker & the Cost of Healthcare and Education

Monday, July 28th, 2008

The knowledge worker is an expression first described by Peter Drucker in 1959.  Over the last fifty years the knowledge worker has become the most essential and fastest growing member of the workforce.  It can be argued the knowledge worker has always been the most essential member of any workforce but in the information age they have taken on new value due to their vast numbers.  What is interesting is not only the growth in numbers of knowledge workers but also the cost of maintaining this booming generation.

Each age places an extraordinary amount of value on that which most contributes to output.  When we were primarily an agricultural economy value was placed on the land and the means to grow, harvest and bring to market the crops it could produce.  During the industrial age a factory’s plant, property and equipment were the primary assets of value.  In both ages the owners of the land or factory invested a relatively large amount of resources to insure the most efficient use of the assets that were the drivers of production and the creators of wealth.

The times are changing and it is the knowledge worker that has become the primary asset that creates future wealth.  Due to the growth of this member of the workforce is it any wonder that the value we place on health and education has increased?  Education is the way we maintain and upgrade the intellectual capital of the knowledge worker.  Healthcare is not only a way to repair and heal the knowledge worker during the down-time of injury and illness it is a way to maintain the long-term operational effectiveness and efficiency of this valuable workforce.  When we look back on the rapidly rising cost of our healthcare system we may find that one of the primary reasons for doing so was to preserve and protect the knowledge worker and the value they bring to our society and our economy.

Is the MD, MBA Worth It? (Part 2)

Friday, June 6th, 2008

This is a continuation of my previous post on this subject.  I am at the halfway point in pursuit of an MBA degree and have found myself reflecting on this question once again.  The first time I did this was before I applied to the Executive MBA program at ASU.  This time it is after a year of study and a great deal of “If I knew then what I know now would I still make the same decision” thinking.  The short answer is yes but I’ve made some observations over the last year that may be of interest to any physician considering the same decision.  (For the initial three observations click on the previous post link above.)

4) Nobody will value your investment in an MBA degree more than you.  This may seem obvious but it is an extremely important point.  When you invest time during the course of your studies this time commitment will mean someone else will be responsible for covering your practice in your absence.  The people who cover you may be your business partners, employees of the hospital or colleagues who you have asked to assist you while you are away.  At first it will be easy for them to cover but if they are doing it out of the goodness of their heart that arrangement will grow thin over time.  At some point in time it will become obvious to them that if they do not feel like they are benefiting from the arrangement the deal will go bad.  While you are away studying they are covering you and despite all their initial support for your endeavors they will come to regret it.  The looser your coverage arrangements the quicker the deal will derail.  If there is some value they will get in return for your endeavors the greater the likelihood they will support you.  If they perceive no value in return, while covering for you, the greater the likelihood they will sabotage your efforts.  That is painfully obvious to me now but I was completely unaware of this a year ago.

5) An MBA degree, or any other investment in human capital for that matter, expands and alters your view of the world.  What you do with that new view is up to you so ultimately the answer to the question of whether it is worth it to pursue such a degree will always be in the hands of its possessor.  An MBA degree provides a view of the world in which you live and work that is different than the one you previously held.  It also provides specific tools you can use to re-evaluate how you approach your work.  It’s similar to what I experienced the first time I used the Internet.  I thought “That is really cool”.  Little did I know at the time how indispensable it would become in my life.  Anytime we can view the world differently and that knowledge can add a significant benefit to our lives it is worth it.

6) The immediate non-financial return on investment (ROI) from an Executive MBA program is the contact and connections you make with your classmates.  They come from a wide variety of industries and cultures but in many ways they are like minds.  They have the same love of learning and need for intellectual stimulation as you do.  They wish to acquire a new skill set and view of the world which will further open their field of opportunities.  Regarding the long-term ROI I liked the response Hugh O’Neill, the Associate Dean of the Executive MBA program at UNC, gave.  MBA programs attract “climbers”, “shifters” and “launchers”.  The climbers are already established in a company and wish to move up the corporate ladder.  The shifters are those who wish to change their career or move to a different type of job in the same industry in which they currently practice.  The launchers are the entrepreneurs who wish to start their own business.  Each of these types of people wishes to enhance the quality of their life and for that reason alone, for them, the pursuit of an MBA is worth it.  Follow this link if you want to see the relationship between an MBA and the financial ROI regarding salary.  As a general rule it increases but physicians should note well it can also decrease if they are in the shifter category.

In Pursuit of Intellectual Capital: Is the MD, MBA Worth It?

Thursday, June 5th, 2008

Less than a year ago I entered the Executive MBA program at Arizona State University to scratch an intellectual itch that I’ve had for the last decade.  Throughout my career as a physician it became increasingly obvious to me that the business of health-care plays a dominant role in what we as physicians can do for our patients.  It permeates everything we do in medicine.  It determines what tests can get ordered, what medicines can be prescribed and what treatments can be provided.  Instead of fighting the beast I decided it was better to learn from it.  It begins with learning the language of business and immersing oneself in the culture.  It is like the Grateful Dead once sang, “What a long strange trip it’s been.”

Since I have another year to go before I complete the program and actually receive an MBA degree it is a bit premature for me to make any grand conclusions to the question I proposed.  What I can do is offer a few observations I’ve made so far.  In future posts I plan to add to the list.

1) Physicians, particularly older docs (myself included) tend to prefer to either work alone or work within a pyramidal type of team structure.  I know that may sound harsh but it’s true for many of us.  In our program we are assigned to groups and much of the work done for class is the result of teamwork.  When I first met with my team I explained to them that they need to understand that as a Trauma Surgeon my idea of teamwork is when they do what I tell them to do.  It was meant as a joke but the one or two nervous laughs it got proved it wasn’t all that funny.  It is easy to forget that there are different types of teams with different approaches to problem solving.  A pyramidal form may work well with a severely injured patient in the trauma room but can be a disaster when leadership must be a shared activity.  I learned a great deal from my team members and classmates this past year and so far that has made it worth it.

2) Physicians tend to be suspicious of physicians who study business.  I was warned about this prior to starting the program but considered it paranoid thinking on the part of the person who said it.  It’s amazing but if a physician develops their human capital through lessons on golf, skiing, painting, gardening, woodworking, wine-tasting, a new language, statistical methods or any other form to improve their mental or physical capacity they are rewarded by their colleagues with smiles and approval.  Mention an MBA degree and all you will see is raised eyebrows.  Since beginning the program I’ve been told that I have “gone over to the dark side”, “taken up with the enemy” and begun to “practice in the dark arts.”  It has been a disappointment to see so many who value education so highly to so easily dismiss the value of a business education.  It reminds me of Plato’s Allegory of the Cave.  Once you leave the cave there may be no turning back.

3) An MBA is to the business world as an MD is to the medical world.  It’s a starting point.  It lays the groundwork for understanding how that world functions.  It is not meant to replace the real world knowledge and experience gained through years of training under the guidance of senior management or attending physicians.  The degree is a way to get your ticket punched and it is the punched ticket which allows you to access the next level where the practical education occurs. 

Human Capital:Our Most Valuable Asset

Friday, May 30th, 2008

It is with great dismay we watch one of the Wall Street giants take a tumble today.  In just over a year Bear Stearns Cos. went from a market capitalization valued at $25 billion down to its fire sale value of $1.4 billion.  What is even more disconcerting is that 7000 of its employees will be searching for new jobs according to the WSJ.  Despite the massive loss of financial capital the more pressing concern for these former employees is what to do in the short-term. 

In Charles Wheelan’s book, Naked Economics, he defines human capital as, “…the sum total of skills embodied within an individual: education, intelligence, charisma, creativity, work experience, entrepreneurial vigor, and even the ability to throw a baseball fast.”  Well, there probably will not be any Bear Stearns employees fighting for a position in the baseball draft but this disruption will release an enormous amount of human capital.  There will be tough times for many in the coming months but ultimately this is a group of people who will rally back and use this experience to their benefit as well as ours.  It is the most painful but necessary part of what Joseph Schumpeter described as creative destruction.  Out with the old and in with the new as some would say. 

While we have gotten use to to layoffs and mass reductions in the workforce as a blue collar phenomenon the 21st century has demonstrated a predilection for those of the white collar type.  At the level of the individual there are very few people who ever considered losing their job as a good thing regardless of their job description.  My heart goes out to these fine people.  Some may have been directly involved in the practices that led to the downfall of Bear Stearns but most were not.  All is not lost though as they still possess their most valuable asset: human capital.