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    Dissecting the value of an MBA to private practice physicians

    A few years ago, Anthony D. Cox, MBA, Ph.D., was doing some consulting work for a hospital-based radiology practice

    He noticed an interesting trend in the practice’s annual patient satisfaction survey: Patients and their families were furious about … the parking.

    “The biggest single complaint the family members and the patients had was that they had to pay for parking. They would say, ‘I go to the mall and I buy something at Cinnabon and they validate my parking ticket, but my husband gets a $50,000 surgery and I have to pay for parking,’” remembers Cox, a professor of marketing at Indiana University’s Kelley School of Business and chair of the school’s Business of Medicine Physician MBA program,

    As much as physicians believe that patients evaluate them solely by their clinical performance, the truth, Cox says, is that patients judge physicians by the overall service they receive. It’s not a lesson taught in medical school; it’s lesson from business school, and Cox covers it with physicians enrolled in his MD/MBA program.

    “Healthcare providers can learn from successful service retailers,” Cox says. “There are a lot of parallels.” Among them, he says, are site selection, building design, facilities upgrades and hours of operation. Medical practices that improve in non-clinical areas actually see increases in clinical satisfaction —a halo effect, Cox calls it.

    Until recently, virtually all doctors avoided the business side of medicine. Instead of worrying about management skills, balance sheets and marketing plans, physicians did what they did best: care for their patients. Even physicians running their own practices focused more on patients and care, steering clear of networking, branding, market research and other tenets of small business.

    But that’s changed quickly. In less than 25 years, the number of U.S. medical schools offering dual-degree MD/MBA programs has grown more than tenfold, from six in 1993 to more than 65 today, according to Maria Chandler, MD, MBA, a pediatrician who founded and heads the dual-degree program at the University of California at Irvine and a member of the Medical Economics Editorial Advisory Board. 

    Every year, 300 to 500 physicians earn MBAs, says Chandler.

     

    Why business school?

    An MBA makes sense to physicians looking to climb the administrative ladder at a hospital, pharmaceutical company or government agency. Entrepreneurial doctors launching new medical devices or biotech startups seem like obvious candidates as well. But what about physicians in small or midsized private practice?

    Cox thinks they might benefit the most. 

    “They are running a small business, a really complex small business,” he says. “You have to make decisions on where to locate the practice, how to recruit the best people and train them and lead them, how to manage cash flows and deal with insurance reimbursement. There’s [information technology]. There are regulatory issues.”

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