Why Business Schools are Melding Medical and Management Science

More doctors and medical students pursuing MBAs, so as to complement their clinical training and broaden their career options in a fast-changing industry

In 2012, Adam Brown did something that seems unusual: after undergoing several years of expensive medical training, he went to business school for an MBA.  

Brown wants to use his medical expertise to help more patients, having previously worked as a physician and medical director in emergency departments across the US. He saw nursing shortages, slow patient throughput times and financial strain — a few of the myriad challenges facing America’s ailing healthcare industry. 

“I recognized that if I could create solutions, I would impact more lives,” says Brown, of pairing clinical and business acumen. 

An Online MBA from UNC Kenan-Flagler Business School between 2012 and 2014, gave him skills for accounting, strategy and negotiation. Brown uses these daily in his job: senior vice-president for Envision Healthcare, where he’s ultimately responsible for some 750,000 patients’ lives and more than 250 clinicians across the US. 

Brown says: “The MBA gave me the vocabulary, knowledge and mindset to address real business challenges facing healthcare.”  

An increasing number of healthcare professionals are pursuing MBAs

Brown’s story sounds unique, but he’s part of a global trend: doctors and medical students pursuing MBAs, so as to complement their clinical training and broaden their career options in a fast-changing industry. 

In the US, the move towards electronic health records and value-based fees, away from fees per service are two significant shifts facing medical professionals. The latter change was brought about by the Affordable Care Act, sweeping reforms to US healthcare. 

“The complexity and rapid pace of change in today’s US healthcare system requires leadership, management and business skills,” says Markus Saba, executive director of the Center for the Business of Health at the Kenan-Flagler school. “Medical schools do not have enough time to teach these topics.” 

[See the Top 10 MBA Programs for Healthcare / Pharma / Biotech]

He reports gradual growth in the number of physicians seeking a business education in the past three decades, especially the school’s flexible Online MBA. “We expect the trend to continue to increase.” 

Harder evidence backs this claim. The number of students earning dual MBA/MD (Doctor of Medicine) degrees has doubled over the past decade to 200 in 2018, according to the Association of American Medical Colleges. 

This figure is not big, yet there’s little doubt about the growing appetite for MBAs among medical professionals. In June, Harvard Business School and Harvard’s Graduate School of Arts and Sciences (GSAS) launched a joint MBA/MS degree in biotechnology. The two-year program trains leaders to work at the interface of life sciences and business. 

Emma Dench, dean of GSAS, says the course fills a unique need. “Students yearn for an opportunity to become conversant in biomedical science and business together. Nearly half of HSCRB (Harvard's Department of Stem Cell and Regenerative Biology) graduates are now entering careers in biotech/pharma, biomedical consulting and finance,” she says. 

Also, schools say a larger number of MBA students from business backgrounds want to work in healthcare, using financial acumen to decrease costs and improve quality of care to make a positive impact on society. From September, students at NYU Stern School of Business will be able to pursue a new MBA specialization in healthcare, for example. 

Melding medical and management science

In March, the University of Michigan Ross School of Business launched the Pinkert Scholars Program through a $5.4m gift. It provides full-ride scholarships to MBA candidates who wish to work in healthcare and innovation. There’s also a $500,000 venture capital fund for students’ healthcare startups.  

“The intersection of health and business is an exciting, opportune place to be with so many possibilities for innovation and enterprise,” says the donor Michael Pinkert, CEO of MHM Services, a US healthcare group.

The full-time MBA at Duke University Fuqua School of Business attracts plenty of entrepreneurs and innovators: about 20 percent of the incoming class are focused on healthcare management, says David Ridley, faculty director of the Health Sector Management Program, a certificate course for MBA students. 

“Entrepreneurs want to use their knowledge of healthcare to help launch new technologies,” he says. “Innovators want to stay in front of the way we organize and pay for healthcare. They’re frustrated with misaligned incentives and want to improve efficiency and patient outcomes.”

Melding medical and management science is a global trend. Dennis Christmas, head of healthcare innovation at Maastricht School of Management (MSM) in the Netherlands, says: “There seems to be an urgent desire among physicians and other healthcare professionals to [acquire] management and business knowledge.” 

MBA students can take a healthcare management specialization at MSM, and there’s also a summer program focused on the industry. Between 30 and 50 percent of students on these courses are medical professionals, says Christmas, noting that cost pressure on global health systems has helped to raise demand. 

“In many societies, the growth and greying of the population has put a big strain on healthcare systems, professionals, and constraints on budgets,” he says. “Medical professionals want to reform their practice into viable businesses.” 

The pressure on complex and interdisciplinary health systems means employees from banks, technology and consulting companies that support or service healthcare providers, are also enrolling in MBA programs in larger numbers, schools say. 

“We see more participants like sales and brand managers, strategy consultants or finance specialists from the healthcare industry. They aim to understand the trends, developments and business opportunities in the market,” says Rainer Sibbel, academic director of the MBA in International Healthcare Management at Germany’s Frankfurt School of Finance and Management. 

Adapting to the digital health revolution

One of the biggest developments is the digital health revolution. Even senior executives need to hone their digital skills as healthcare providers’ strategies are being increasingly shaped by technology that’s used to cut costs and increase efficiency. 

“The strategic impact of these IT-based innovations like telemedicine, personalized care, artificial intelligence, big data and blockchain technology is huge,” says Sibbel, noting that this is discussed in the MBA.  

Yet the challenge for healthcare professionals is the massive cost of MBAs — top programs charge seven-figure fees. Medical school is pricey too, with US doctors often saddled with $200,000 to $500,000 in student loan debt, says Kenan-Flagler’s Saba. 

The opportunity cost of not working is also high, since the median pay for American physicians and surgeons was $208,000 last year, according to the Bureau of Labor Statistics. 

For this reason, Nicole Tee, director of Graduate Studies at NUS Business School in Singapore, says the largest increases in medical professional enrolment are seen in part-time MBAs. Across NUS MBA and EMBA programs, the number enrolled has increased by 20 percent in the past five years. 

Tee puts this down to increased healthcare needs among the rapidly ageing population of Singapore, where government spending on healthcare, as well as wealth is surging. 

“Most of the doctors in Asia choose to do the part-time MBA or one of our Executive MBAs,” she says. The advantage with this approach is that they can retain a salary and apply what they learn directly in the workplace. 

However, Kenan-Flagler’s Saba says the very long hours and declining reimbursement for the work doctors do because of the Affordable Care Act make it “very difficult to justify the additional time and expense of an MBA program”. 

But with the healthcare industry facing profound challenges and sea change reforms, investing in an MBA looks increasingly attractive.

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