From MD to MBA

Crystal Run Healthcare has come a long way from its 1982 beginnings as a one-physician, one-site practice with an unfinished floor. And so has its founder, Hal Teitelbaum, MD, a former academic who launched the practice with no business experience and no money.

"I knew absolutely nothing about running a business," Teitelbaum recalls. "I spoke to my father, a CPA ... and I said to him, 'What's going to happen if my projections are off, and I don't see as many patients as I think I will?' He said, 'You'll go broke, but we won't let you starve.'"

He hasn't gone broke or hungry. On the contrary, Crystal Run has blossomed to 450 employees in seven sites in Orange and Sullivan counties, N.Y. The multispecialty practice last year opened a new 72,000-square-foot office (with a finished floor), has added a host of new services including obstetrics and gynecology, neurology, and nephrology, and has become a dominant player in its market between New York City and the Catskill Mountains.

Teitelbaum doesn't credit all his success with his decision to enter Columbia University's executive MBA program in 1996. But it's surely no coincidence that most of Crystal Run's rapid growth has come in the last few years. In 1994, the practice had two doctors, including Teitelbaum; today, it has 60, plus 10 midlevel providers. In the last year alone, Crystal Run doubled its employee size and physician base, in addition to its new clinical services. It could not have grown so quickly, says Teitelbaum, had it not been for the business planning and accounting skills he acquired at Columbia.

Nor could the practice have devised as effective and aggressive a marketing strategy as it has. Crystal Run sponsors its own cable television and radio shows in addition to doing advertising and maintaining a consistent presence at local health fairs. Teitelbaum's vision of building an "unavoidable" healthcare system to counteract the forces of managed care has been realized.
"And we've done it all with projections that are 100 percent on target," he says. "That's the power of understanding what you're doing."

Growing popularity

While there's no doubt you are a trained expert in the exam room, how well do you understand what you're doing in the back room, where payer contracts are negotiated, new physicians are recruited, staff is trained, and decisions are made about opening new offices and adding new services? How confident are you in those arenas?

If you're like most physicians, you went to medical school to treat patients, not to become a business tycoon. Your ambitions may be more modest than Teitelbaum's. But the world of shrinking reimbursement, rising expenses, overwhelming paperwork, and increasing competition has made a sharp business acumen more valuable than ever - and a lack of it more glaring.
As more doctors realize this, despite the hectic nature of their lives already, more are choosing to hit the books again. More universities are offering programs tailored to healthcare professionals, including some designed specifically for physicians.
Take the University of Tennessee, for instance. Its Physician Executive MBA (PEMBA) program is aimed at "helping physician leaders regain control of healthcare," says Mike Stahl, PhD, the program's director and a management professor. The physicians who enroll, says Stahl, come from all branches of the healthcare delivery system - from solo practitioners to hospital administrators to insurance executives - but all have in common at least five years' experience (a requirement for admission), a sense of optimism about healthcare's future, and a determination to understand it better in order to function within it more effectively.

"Many physicians ... have found that, because of the changes in the healthcare system, they have lost control," Stahl says. "Third-party payers and the government are too often positioned between them and their patients, and that interferes with their ability to deliver the quality they want. So they're looking to acquire the knowledge and skills of business to reshape that relationship to something that's more like what they're used to."

Programs like PEMBA - those that specialize in training healthcare professionals in business - are not uncommon. Some universities tailor MBA programs for healthcare; others offer master's degrees in medical management (MMM).

Many physicians, though, opt to enroll in straightforward business programs, arguing that healthcare is too insular already. A standard MBA usually takes two years to complete, but many programs tailored for busy professionals have been condensed to one year. And they often accommodate students' schedules in other ways, for example, by offering classes in person and online - in real time or when it's convenient for the student.

The PEMBA program involves all three modes. Students attend four weeklong seminars in Knoxville, Tenn., and take courses online the rest of the time. "Your assignments are all outlined in Lotus Notes on the calendar, so you pretty much know for the whole year when everything's due," says Ed Diamond, MD, a PEMBA graduate. "It's a nice balance."

Pros and cons

Should you pursue a business degree? It depends on your goals, your motivation, and your schedule.

Most academic officials argue strenuously against entering a healthcare-oriented program if you have become so disenchanted with the healthcare system that you're in danger of leaving the profession altogether. Before you enter any program, make sure you know what you want out of it. OB/GYN Brent Bost enrolled in the mid-1980s in the MBA program at Lamar University in Beaumont, Texas, where he was working as a solo practitioner, because he worried managed care might ruin medicine for him.

"I thought, 'What can I do if this job really stinks?'" Bost recalls. His answer was to gain enough business expertise to work as a physician executive or a practice management consultant. But as it turned out, Bost would soon merge his practice with several others, and he no longer is the managing partner. Meanwhile, managed care didn't stick in rural Beaumont. In retrospect, while Bost doesn't regret getting his business degree, he admits its uses for his training are limited.

Timothy Bricker, MD, director of the Heart Center at Texas Children's Hospital in Houston, is grateful for his business training at the University of Chicago, but the experience did not much change his management of the Center. "I can't say there were areas that made clear how wrong we'd been," he says. "Much of what I learned was affirming."

On the other hand, some physicians credit their business training with helping them turn their practices into more important players in their markets. Diamond, who is president of Suburban Lung Associates, a Chicago-area practice specializing in pulmonary medicine, says he's a better manager of people and a more capable evaluator of new initiatives because of the program.

For example, when a nearby hospital was engaged in a campus renovation, "I convinced it to divest itself of its own pulmonary function lab, and let me develop a much more advanced lab that would be under our ownership," Diamond says. He could not have written the 100-page business plan needed to persuade the hospital without his business training, he says.

The practice also is engaged in an effort to redesign the healthcare delivery processes that affect patient satisfaction and the perception of quality. It was his PEMBA experience that helped Diamond realize the importance of understanding process.

Knowledge is power

Business school is helpful to the professional who wants to learn how to evaluate business plans, devise a marketing strategy, negotiate contracts with payers, or reshape relationships with hospitals. And if you've set your sights on an executive career with a hospital, insurance company, or pharmaceutical firm, a business degree may be a prerequisite.

But you may be disappointed if you believe healthcare is so unique it has little to learn from other professions. Even in the healthcare-oriented business programs, students spend much of their time analyzing other industries.

"The mission ... of the program is to develop leaders who can face the challenges of the future of medicine, so they're using standard business theory and relating it to healthcare," Diamond says. "For example, in the course on information technology, we studied cases from nonmedical industries, like Mrs. Field's Cookies or the airline industry, and the professor discussed how information technology was used in each of those, then relates those back to medicine."

Moreover, acquiring a business degree is a grueling experience even for someone without a full-time job. Even programs that make efforts to accommodate the busy lives of professionals demand a lot of time, so consider carefully whether you are able or willing to make the commitment.

You should also think carefully about whether the information you hope to extract from the program is worth the effort you'd put in. If you're just looking for some pointers on practice efficiency, you probably don't need a full-fledged degree.

"Those were two of the best-spent years of my life, and they were also two of the most difficult years," says Teitelbaum. "These are intensive programs. They're nothing to be entered into lightly. ... There's a tremendous amount of work to be done outside class, a lot of getting together with classmates, a lot of number crunching. Meanwhile, I was practicing medicine full-time, and I have a family and was trying to have a life."

Bob Keaveney, editor for Physicians Practice, can be reached at bkeaveney@physicianspractice.com.

This article originally appeared in the March 2003 issue of Physicians Practice.