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Business Matters

By Erika D. Peterman

FMA Managing Editor

Many of the problems we deal with in medicine today are not actually the science of medicine. It's trying to get it delivered to people in an efficient and cost-effective way,...Patrick Duff, M.D., Associate Dean for Student Affairs at the University of Florida College of Medicine

By the early 2000s, FMA member Coy Irvin, M.D., M.B.A., had spent 25 years in primary care and developed a bustling Milton, Fla.-based group practice that had grown to employ 11 physicians and eight healthcare extenders in five locations.

He knew how to practice medicine. However, the ongoing administrative and financial frustrations of running a practice convinced Dr. Irvin that he needed to know much more about business. Even with practice managers on staff, he and his fellow partners were often tied up in monitoring crucial cash flow matters.

"You're supposed to be taking care of patients, but you're spending so much of your time trying to make sure people are getting paid," said Dr. Irvin, who is now Chief Medical Officer of Archbold Medical Center, a four-hospital, three-nursing home health center in Thomasville, Ga.

He had also been considering a transition from full-time private practice to hospital administration, "But if I was going to do that, I needed to understand why [hospitals] operated the way they did."

So in 2005, the same year he became Interim CMO for Baptist Health Care, Dr. Irvin enrolled in the Physicians Executive M.B.A. program at Auburn University.

"I wish I'd gotten it sooner," he said.

Dr. Irvin is among a growing number of physicians and residents who have either earned M.B.A. degrees or are pursing them so that they'll be equipped to handle the complex non-clinical responsibilities doctors face. Whether in large groups, small independent practices, hospital health systems or academic administrative positions, physicians are constantly confronted by issues they didn't learn much about in medical school.

Nonetheless, the ability to handle non-clinical pressures -- managing budgets and employees, understanding compliance laws and human resources rules, identifying waste, and effectively solving a variety of problems outside the exam room -- can greatly affect a doctor's patients, payments and overall
career. These skills are especially important as the American health care system increases its emphasis on value, population health, efficiency and teamwork.

An M.B.A. certainly isn't required for a physician to successfully practice medicine, and there are many other programs, such as the FMA's Karl M. Altenburger, M.D. Physician Leadership Academy, that are designed to sharpen those skills. Yet, experts say all doctors should be mindful of this fact: Medical practices and health systems are not like other businesses, but they still have business challenges.

"Many of the problems we deal with in medicine today are not actually the science of medicine. It's trying to get it delivered to people in an efficient and cost-effective way," said Patrick Duff, M.D., Associate Dean for Student Affairs at the University of Florida College of Medicine. "Whether you're trying to do that on a national level or at the level of UF Health or an individual department, if you can't sustain your revenues, you're not going to be able to provide care to patients.

On the other hand, if you can't make your operation more efficient so that you can do more with less income, you're not going to be providing a great service to your patients."

According to the Association of American Medical Colleges, there are 70-plus formal M.D./M.B.A. programs nationally, including those at the University of Florida, the University of Miami and the University of Central Florida. In 2016, almost 150 students were enrolled in such programs -- a seemingly small number, but a 143-percent leap from 2003. There are 12 D.O./M.B.A. programs in the U.S., according to data from the American Association of Colleges of Osteopathic Medicine.

That doesn't count the many physicians who earn M.B.A. degrees apart from medical school. FMA member Kyle Moyles, M.D., M.B.A., an orthopedic surgeon in solo practice at Melbourne Hand Center, completed his M.B.A. online at Florida Atlantic University and a hand surgery fellowship at Brown University simultaneously in 2013. The double commitment was intense, but Dr. Moyles' business knowledge yields a return every time he spots an insurance company's mistake.

"Today is my day off, and all I'm doing is going over the bills," he said during a telephone interview. "My M.B.A. training allows me to not only enjoy doing it, but to do it pretty efficiently. I figured out that the most valuable asset on an hourly basis is my administrative time."

During his studies at Auburn, Dr. Irvin and other physician M.B.A. candidates spent about four days each semester on campus and did most other coursework remotely.

"It was so funny, because on Sunday night, you'd see everyone get online at about 10 until midnight, when everything was due," he said.

Organizations are made up of people, and you don't create patient satisfaction unless you create physician and staff satisfaction. It's a holistic approach....Steven Ullmann, Ph.D., Professor and Chair of the Department of Health Sector Management at the University of Miami

What Dr. Irvin learned transformed his view of day-to-day operations -- for example, determining whether a new practice service would be self-sustaining or a resource drain; not wasting money on unnecessary equipment; scrutinizing contracts and knowing what the acronyms mean.

"It can be something simple, like the drug representatives coming in and showing you some statistics and data on their drugs, and you can tell it's not exactly the real deal," he said. "We all took statistics in medical school but we hated it and didn't pay attention to it, but it's a big part of what we do. You have to really understand the statistics and how they can be manipulated to show you a false narrative."

Catherine Walkington, M.D., M.B.A., a graduate of the University of Miami's joint M.D./M.B.A. program, still remembers a lesson she and her fellow students received on their first day of class. Steven Ullmann, Ph.D.,

Professor and Chair of the Department of Health Sector Management, simply challenged the group to decide how to divvy up a pie.

"We asked each other questions like, 'Who hasn't eaten?' and 'Is there a diabetic in the room?' " said Dr. Walkington, a Kendall, Fla., native who is in an OB/GYN residency program at the University of Texas Southwestern-Parkland Health & Hospital System. "Ultimately, we were all so proud of ourselves until Professor Ullmann said, 'No one offered to help pay for the pie.' "

It became obvious to Dr. Walkington that learning about business "was not necessarily about making a profit, but how to be a successful business so we could keep taking care of patients."

"If a Starbucks closes, even though we might be very sad, it's not millions of dollars of health care resources that are wasted and ultimately can't go to save somebody's life or improve the quality of life for hundreds of thousands of people," she continued. "If access to health care is reduced, there's a part of our community that isn't healthy, and the costs are transferred to the rest of the community. It was a huge eye-opener."

At the University of Florida and the University of Miami, joint M.D./M.B.A. candidates step away from their clinical studies between the third and fourth year of medical school for a year of intensive business instruction. Professor Ullmann noted that a number of physicians who are already established medical directors or health system CMOs enter U.M.'s executive M.B.A. program because they want to become better leaders.

"Organizations are made up of people, and you don't create patient satisfaction unless you create physician and staff satisfaction. It's a holistic approach," said Ullmann, also Director of the university's Center for Health Sector Management and Policy.

"When physicians take accounting courses, they aren't going to become accountants, but they understand enough to be able to talk to the people who are working in those areas within the health care organization so they can make better decisions," he said. "When you have an environment that is working more efficiently, the physicians have more time to do what they want to do."

Doctors without business acumen also run the risk of making bad deals that can cost them millions. Ullmann recalled a conversation with a university colleague who was preparing to sell the physician practice that he and his son owned for $1.6 million. After only 20 minutes of doing some calculations, Ullmann advised his colleague that the practice was actually a $6.1-million operation.

"He came back to me and said, 'Thank you,' " Ullmann said. "They were ready to sell for $1.6 million and they sold for $6 million. Physicians who aren't aware of some basic aspects of the business of health care these days are like deer in the headlights."

Dr. Walkington hopes to return to South Florida after residency and build a career in academic hospital administration. In the meantime, she's making keen observations about the relationship between margin and mission thanks to her M.B.A training.

"We know it's not about the money; it's about taking care of the patient 100-percent. But it's almost myopic to say you can't think about the money," she said. "Even as I'm practicing in residency right now, I realize it has changed my perspective."

Article reprinted from Florida Medical Magazine with permission from the Florida Medical Association.

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