Bill Glick: Why MDs may need MBAs to create value in the evolving health care landscape

Top-quality health care procedures are readily available in the United States, but disruptive trends are challenging health care businesses. Renewed attacks on health care costs, demands for greater access, exciting research on personalized medicine, evidence-based medicine and medical tourism are transforming health care businesses.

Remarkably, these disruptive challenges are less about medicine and more about evidence-based management of health care organizations.
They are disruptive challenges that demand a business solution.

Why business? Why now?

The country began grappling with the need for health care reform and searching for potential solutions well before the advent of the Affordable Care Act. Health care organizations are increasingly rewarded for outcomes and efficiency rather than the numbers of procedures with expensive equipment.

For example, one reform instituted last October eliminated readmission reimbursements for hospitals. Now, hospitals are not reimbursed if a patient is readmitted for treatment of the same illness within 30 days. This incentive to “get things right the first time” will increase efficiency.

The challenge to provide the same, or better, quality of care with less is indeed a business challenge. Leaders and managers within the field who understand business models and can implement lean-style business systems are at a distinct advantage.

Strategic planning, big data, services marketing, life cycle cost accounting, continuous improvement and operational excellence are all familiar topics in business and critical to the future of health care.

In addition to understanding how the system can best function, being able to analyze additional challenges to the standard care platform, such as the increase in medical tourism or the rise of pharmacy clinics or further individualization of care through genometrics, is a skill that business leaders provide.

The bottom line

It’s no coincidence that leaders of many of the major hospital systems in Houston, home to the largest medical center in the world, not only have training in medicine but also in business. According to the Association of American Medical Colleges, from 2002 to 2011, combined enrollment in dual-degree MD/Ph.D., MD/J.D. and MD/MBA programs increased 36 percent.

CEOs of health care systems and hospitals, physicians within large organizations or practicing on their own, managers of accountable care organizations and those marketing insurance packages to consumers must understand business in order to be successful in this rapidly changing landscape.

The health care industry will increasingly need and seek leaders who can effectively create value, which is the fundamental goal of business. Those who can succeed will not only improve the health of their organizations, but also improve the very health of the health care industry.

Bill Glick is dean of the Jesse H. Jones Graduate School of Business at Rice University. Located in Houston, across the street from the Texas Medical Center, the school offers an MD/MBA degree with the Baylor College of Medicine, a concentration in health care and a graduate certificate in health care through Rice Executive Education. Reach him at (713) 348-5928 or [email protected]. More is available at

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