Physicians, Time to Get that MBA?

I had posted previously about the scarcity (albeit increasing prevalence) of MD/MBA programs in the U.S. Now, in light of imminent (well, as long as they aren’t declared unconstitutional) provisions of the health reform law, there’s a new reason to start looking at the intersection between business and clinical practice:

Hospital-physician alignment.

According to a survey conducted last year, physician alignment is cited as the number one obstacle to the formation of ACOs by hospital administrators, above capital or IT obstacles. What is hospital-physician alignment? Simply put, it’s the idea that hospital administrators and the physicians they employ or contract with are aligned in terms of goals, strategies, and economic incentives.

There was a rush by hospitals to hire physicians back in the 90’s, only to flop as hospitals realized that newly-hired physicians were costing them hundreds of thousands per year from lost productivity. But with new regulations and pressures to form ACOs, hospitals are once again rushing to gobble up physicians. They can’t afford not to. This article provides a well-written overview to the “logic behind this money-losing proposition”, arguing that only those hospitals with robust employment strategies will be well-positioned to respond to changes in this tumultuous regulatory environment.

This time, many hospitals are employing productivity-based incentives rather than a flat salary, to avoid the problem of productivity-associated losses. This reminded me of a quote from a TEDTalk by Dr. Barry Schwartz, a professor at Swarthmore whom I had the pleasure of taking a very entertaining Intro Psych with back in freshman year:

“If you were to reward doctors for doing more procedures—which is the current system—they would do more. If instead you reward doctors for doing fewer procedures, they will do fewer. What we want, of course, is doctors who do just the right amount of procedures and do the right among for the right reason—namely, to serve the welfare of their patients.”

Would you really want a hospital executive trying to gauge what is the “right amount of care” for you, and then figuring out ways to incentivize that? Or would you prefer your physician calling the shots?

Personally I’d prefer the latter (as both a potential patient and an aspiring physician). To achieve that, we need two things: more business training for physicians (read: MD/MBA programs), and a seat at the hospital management table for the physician.

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