The rise of the MD/MBA degree

Getting down to the business of health care.
Getting down to the business of health care.
Image: Reuters/Desmond Boylan
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For David Gellis, the spark came during a class in college on health policy in America. He had known he wanted to become a doctor, but he was looking for a way to contribute to systemic change in healthcare. His professor at the time was Donald Berwick, who later headed the Center for Medicaid and Medicare Services and made a bid this year to be the Democratic candidate for governor of Massachusetts on a platform that includes single payer healthcare. Berwick’s class inspired Gellis to think more about the business skills needed in healthcare.

Gellis decided he wanted to apply business skills specifically to primary care, and he applied to Harvard Medical School and Harvard Business School simultaneously. By the time he began his residency in internal medicine, he’d completed both degrees and had caught the attention of Iora Health, an innovative primary care practice that was planning to start up in a few cities around the country. When he finished his residency three years later, the company hired him as a primary care provider. Half a year later, he is helping to lead their Brooklyn practice.

“I have an actual management title and responsibilities, which is pretty crazy six months out of residency,” said Gellis.

According to Maria Chandler, who is president of the Association of MD/MBA Programs and herself a recipient of both degrees, the degree combination “fast tracks” graduates up the career ladder. The current nominee for surgeon general, Vivek Murthy, holds both degrees, has founded multiple organizations, and is only 36 years old.

Those with dual degrees have a particular edge when it comes to hospital administration, a field that has traditionally employed MBAs as leaders and MDs as middle managers. According to a New York Times analysis in May, the average annual salary for a hospital administrator is $237,000, compared with an average of $185,000 for a clinical physician. A 2011 study found that hospitals with physician CEOs outperformed those with non-medical leadership.

“Just like you wouldn’t want a school superintendent to never have taught, you don’t want the person leading your hospital to never have taken care of a patient,” said Vinod Nambudiri, a fifth-year internal medicine and dermatology resident at BWH and a graduate of Harvard’s joint MD/MBA program. Chandler wonders how physicians can become administrators without business training. “What industry puts somebody with no business training in front of a huge budget?” said Chandler. “Nowhere but medicine, really.”

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There is a growing complaint in medical education that the curriculum hasn’t changed very much since 1910, when educator Abraham Flexner analyzed medical school curriculums across the country and proposed standardization of pre-clinical and clinical years in his groundbreaking Flexner Report. In the last few decades, the number of students choosing to supplement their MD degrees with others in different disciplines is climbing, and more schools have begun offering joint PhD, MPH, and MA programs. The number of joint MD/MBA programs in America has grown from six to 65 in 20 years. (From 2011 and 2012 alone, the number increased by 25%.) More than half of MD/MBA programs started after the year 2000, and most offer the degree in a five-year timeframe, lowering the total cost that business school would traditionally add.

Chandler estimates that there are about 500 students in joint MD/MBA programs across the country this year. She runs the joint degree program at UC Irvine, where 20% of medical students in the incoming class are doing the MD/MBA program. In the past, interest in business was sometimes derided as a distraction from commitment to medicine: Students interviewed in 2005 said some doctors or peers saw them as “traitors” for getting MBAs. When Chandler herself got the degree in 1992, she said no one told her about the few combined programs that existed back then. She earned her MBA by attending evening classes for four years while working full-time as a pediatrician.

“Many of the greatest challenges in healthcare today are business problems,” says Evan Rachlin, an MD/MBA graduate who works in the healthcare arm of Bain Capital Ventures. As hospitals implement the Affordable Care Act, and managed care systems grow increasingly complex, many medical students and residents feel compelled to understand the business of healthcare, from team management to budgeting and accounting.

For students in joint programs, switching back and forth between cultures can be surreal. Medical students are part of a clear hierarchy: They wear the shortest white coats in the hospital, reaching only to their waists, while attending physicians wear the longest. In business school classes, however, “you are told that everyone’s opinions are equal and the people at the lowest level may have the best idea,” Chandler says.

Sometimes, it can be difficult for students to balance these two sets of expectations. But they say achieving this balance is the purpose of the dual degree. “Medical people tend to be very risk averse; innovations often come from outside,” said Alexi Nazem, a third-year MD/MBA resident in internal medicine at Brigham and Women’s Hospital. “Most of medicine is like a giant oil tanker you’re trying to steer with a paddle.” Earning an MBA can give a new doctor more clout in hospital decision-making.

study in 2001 found that students in MD/MBA programs at six medical schools exhibited a higher “tolerance of ambiguity”—a characteristic the authors associated with leadership ability—than traditional medical students. “When you read a business case for the first time, there really is no right answer, and initially it can be really frustrating having gone through trying to solve every problem and follow all the rules like medical school taught us,” said Gellis. “You learn how to think about uncertainty.” Gellis finds this sort of thinking relevant in his work as a primary care provider, since he is often the first line of contact for patients coming in with a problem. For example, he says, “you have to think about what one piece of data you want instead of ordering every test.”

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The MD/MBA may also be attracting more high-performing students to the specialty of primary care, which is declining in residency application numbers even as the need for practitioners increases. Business-minded types often search for problems that need solving, and primary care gives them plenty of opportunity for that. The field allows doctors to be creative while serving a high-need medical population, and to tackle preventive care rather than band-aid solutions. “If we’re going to reinvent the primary care system, we need young leaders to step forward,” said Gellis. After stumbling into primary care as a path that would let him take care of individual patients while assuming responsibility for the bigger picture of healthcare, Gellis started the grassroots network Primary Care Progress.

In primary care, doctors may be able to work a combination of clinical hours and entrepreneurial work hours. This is what Nazem, who is finishing up his internal medicine residency and searching for entrepreneurial work in conjunction with a primary care fellowship, hopes to do. The only issue with these dream-job setups is that graduates often end up having to cobble them together themselves. “You really have to be enterprising and committed because you will run into wall after wall after wall,” said Nazem.

Merck CMIO and Harvard MD/MBA graduate Sachin Jain says that’s what you often have to do in the business world anyway. “This whole notion of a path is very medicine. It’s not very business,” says Jain. “In business, it’s very organic, you have to be able to see the opportunity and lead change towards that opportunity.” The timeline and application structure for residencies or fellowships are very rigid, while the hiring for startups, for example, is fluid.

Another challenge is that most clinical residencies don’t allot time or outlets for side projects during work hours. Marissa Wagner interrupted her residency to earn an MBA at Stanford. When she returned to residency in 2013, she tried to continue a project she’d started at Stanford, but says it was a struggle to do so when working 80 hours a week. “If you decide to go back and finish residency, you sort of have to leave this stuff, at least to a certain degree,” she says.

There are an increasing number of residency programs seeking to solve this dilemma. Duke started the management and leadership pathway for residents in 2009 to solve the problems of “accidental administrators in medicine” and potential “atrophy” of business school skills during residency. Duke declared that there should not be a “binary choice between business or medicine.” The students have a minimum of 15 months of management experience over the course of the program, with approximately 6 months on clinical rotations and 6 months in management modules for two to three years.

Jain did a training program at Brigham and Women’s Hospital called HemiDoc, where he spent 50% of his time in residency and 50% pursuing his medical and business research and teaching. While in residency, Nazem has been working on a medical education side project to create and implement a residency-fellowship training pathway specifically for management and innovation in medicine. “Like there are sub-tracks in internal medicine, there should similarly be a track to train people who intend to be in clinical leadership roles and innovation roles,” he said.

Even in a typical residency, though, business training often comes in handy. When Chandler asked residency programs across the country for evaluations on UC Irvine graduates, she found that “in almost every category, MD/MBAs were listed as higher: even in non-business areas.” She says she doesn’t know if there is self-selection bias for these kinds of dual degree programs, which would mean that students who choose to pursue dual degrees may be more competitive and well-rounded to begin with.

The benefits run both ways: Chandler says that earning an MD may help make business-minded people more careful and compassionate. Businesses who hire MD/MBAs tell her that these graduates are “ethical businessmen” who use the medical creed to influence their actions in the business world.

Unlike medicine, where applying for jobs can be a slow and methodical process, the business world can present unexpected opportunities. In his second year of residency, Jain got a phone call asking him to work at the US Department of Health and Human Services. As he worked to improve nationwide policy and implement the Affordable Care and HITECH Acts, said Jain, “my MBA was used every day we were building new organizations, hiring new talent, and thinking about strategy.” Now that he’s the first chief medical information and innovation officer at Merck, Jain still sees patients at the Boston VA medical center and is a lecturer of health policy at HMS, is affiliated with the research institute at HBS. He also launched a journal focused on healthcare delivery and innovation.

Chandler, too, says leadership opportunities have appeared for her at every turn. She found herself launching the new MD/MBA program at UC Irvine in 1997—which started with one student—when she inquired about how to encourage medical students to pursue the school’s MBA degree. In addition, Chandler oversees nine nonprofit clinics in Los Angeles County.

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Practicing medicine requires passing through a series of sequential gates: medical school, board certification exams, residency, fellowships, and re-certification. Many successful MD/MBAs warn against straying from this path. “Clinical credibility matters,” said Jain. “A lot of folks will get off the path, do the MD/MBA, leave, and don’t do residencies. I think it’s a huge mistake. Having completed a clinical residency has enabled me to practice clinical medicine, which is so important and so relevant to my ability to understand what the systemic problems are in the delivery of healthcare that need solutions.”

According to a study published in June 2014 that surveyed Wharton MD/MBA graduates from 1981 to 2010, 29 of 148 respondents (about 20% of respondents) did not enter residency. The same study showed that recent graduates of the program have entered residency at slightly lower rates than older alumni.

Fisayo Ositelu, who works on consumer health insights at NerdWallet, decided not to do a clinical residency when he graduated with his MD/MBA from Stanford. “I’ve always wanted to work on a large scale versus a one-on-one basis. I think there’s a lot that can be done on a systemic level,” he said. Currently, NerdWallet’s health arm is focused on helping consumers reduce their medical bills.

Evan Rachlin, currently working in healthcare venture capital at Bain Capital Ventures, chose not to do a clinical residency when he graduated from Harvard’s joint degree program. When the time came to apply, he felt that there was little point in practicing at a hospital for just a few years and then leaving the clinical setting altogether. “It forced my decision between clinical care and business earlier, because I knew I didn’t want to leave clinical medicine right after doing a residency,” he said. In the end, he decided to go straight into the business world. He worked at McKinsey as a healthcare consultant, calling the experience “in many ways a business residency. They have an enormous number of doctors. My first case there, everyone on the team was either a PhD or an MD.” Now, at Bain, Rachlin and his team talk to 500 healthcare startups a year to determine where to place multimillion dollar investments.

Some wonder if it would be more useful for students to pursue MDs and MBAs one at a time, immersing themselves in medicine before applying to business school. “The downside of doing [the MBA] too late is you can become stuck in your ways,” said Gellis, adding humorously, “I’m already seeing how I’m calcified.” Chandler says she sees a major advantage to earning the MBA during medical school. “You have this really unique perspective, like you’re wearing two sets of glasses all the way through,” she says. Most MD/MBA joint programs are five years: three years of medical school, a fourth year in business school, and a fifth year that’s a combination of both. Rachlin says that it was radically different to come back to his last year of clinical rotations with some business training. “I didn’t take what I was experiencing in the hospital with medicine as the only way it could be done,” he says.

Nazem would like to see some element of management training become the norm for medical students. “80% of what we learn [in business school] should be taught in medical school,” said Nazem. “There are a lot of things you learn in medical school that are not as relevant to the practice of medicine as management and leadership are.”

Jain says that much of what he learned in business school wouldn’t be essential for doctors who simply want to practice medicine. “Even though I think the degree is valuable to anyone, I don’t think everyone should get an MBA,” said Jain. “The world still needs doctors who are very deep and thoughtful about specific clinical problems.”

This post originally appeared at The Atlantic. More from our sister site: 

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