Physician Leaders: Four Reasons to Seek a Business Degree

An Important Consideration for the Future Executive

A common question arises when considering a career change to a non-clinical position. If you’re seeking work as an administrator, you may be thinking: “Will I need a business degree?”.

business degree

It seems that more physician leaders have an MBA, MHA, MMM or MPH (an MPH is not actually a business degree, but a significant number of physician executives seem to have one). A business or management degree is definitely not a requirement for a career as a physician executive. There are many very successful physicians, including numerous CEOs, working in hospitals, insurance companies, medical groups and not-for-profit organizations.

If you have not already graduated from one of the 65 joint MD/MBA programs (referenced here) then you will likely consider obtaining it or a similar degree after completing residency. Pursuing such a degree is a big commitment. The costs will run into the tens of thousands of dollars. It will require thousands of hours of study and preparation, and up to a three-year commitment to complete.

Physician Salaries and OIG Risk

Five Steps to Avoid an Audit

I have been following news reports about recent OIG (Office of Inspector General) investigations related to physician compensation. These investigations have resulted in fines related to alleged Stark Law and FCA (False Claims Act) violations. There seems to be more activity recently, including investigations in response to whistle-blower lawsuits.

OIG

Here is my take: Hospitals and health systems that use survey data (such as MGMA and AMGA) to set compensation levels for newly employed physicians are under intense scrutiny. This scrutiny results because:

  • it appears that collections generated by the employed physicians do not support the salaries being provided, or
  • salaries of newly employed physicians significantly exceed compensation previously generated in their independent practices.

Tactics to Cultivate Direct Reports

Part 2 - How to Achieve Your Five Intentions

direct report

In the last post, I talked about the Five Intentions I believe every physician executive should have for their direct reports. The intentions are to:

  • Inform
  • Assist
  • Mentor
  • Maintain accountability
  • Evaluate

In Part 2, I want to provide some specific actions that can be taken to fulfill those intentions and cultivate your direct reports.

Five Intentions For Direct Reports

Part 1 - What Does the Effective Executive Want to Accomplish?

As presented in a previous post (The Three Domains of the Physician Executive), one of your primary roles as a physician executive is to interact with your direct reports (DRs). These are directors, managers and others over whom you have direct responsibility. This oversight generally includes the following duties:

  • They report to you. So they have a solid line relationship to you on the organizational chart.
  • You may have recruited and hired them when the previous DR moved on.
  • You are held accountable for their performance. The performance of your division is determined by the performance of all of your direct reports’ departments.
  • You formally evaluate their performance.
  • You discipline them if the situation demands it.
  • You terminate them if circumstances warrant it.

direct reports

In working with direct reports, there are two primary aspects I’d like to reflect on…

  • What to do
  • How to do it

In this first of two posts, I want to describe what I believe are the major intentions of your interactions, or the “What” that you should focus on. A subsequent post will outline some of the tactics that can be used to achieve these intentions. Since my DRs were generally department directors, I will refer to them as such.

More on Understanding Relative Value Units (RVUs) in Employment Agreements

Creating a Sustainable Compensation Model

Some of you emerging executives may become involved in recruiting new physicians and negotiating contracts. For those, I am providing the following discussion about the use of worked relative value units (wRVUs) in that process. I previously posted an introduction to the topic here: Physician Employment Agreements.

Suppose that your organization is offering the following salary proposal: two years at a fixed salary, followed by a third year in which it converts to a fixed component PLUS an RVU based bonus. Let’s review the rationale and then look at actual MGMA (Medical Group Management Association) numbers upon which the offer might be based.

fine print about relative value units

Your Perspective (as Employer)

You know that you must offer a competitive salary, along with other forms of compensation and benefits, in order to entice a new physician to sign. For most specialties, there is still moderately fierce competition for solid, well-trained physicians. The number of established physicians available is relatively small in comparison, so most recruiting is aimed at physicians coming out of residency and fellowship training programs.

When to Use a SWOT Analysis

A Valuable Tool for the Physician Executive

As a physician executive, you will participate in strategic planning, goal setting, and project management. As a business leader, you will need to assess the risks and benefits of pursuing various new initiatives.

One of the tools used by business leaders to do such an assessment is a SWOT analysis. SWOT is an acronym for Strengths, Weaknesses, Opportunities and Threats.

The  development of the SWOT Analysis (or Matrix) has been attributed to Albert S. Humphrey, although he disavowed having invented it. It is a conceptual tool that has been used by countless business leaders to assist in planning. As a physician manager, you should become very comfortable using it.

SWOT Analysis

What Are the Components?

The strengths and weaknesses generally refer to internal  characteristics of an organization. This includes financial resources and performance, human resources, branding, and loyalty of customers. It also might include cultural issues, such as whether your organization or division is nimble or slow-moving.

Being Indispensable

How Being a Valuable Asset is Good for You and Your Organization

Is being indispensable important to you?

Moving from a clinical career into management can result in culture shock. The shock can be lessened by moving gradually. You start as a medical director. You increase your management hours while gradually reducing your clinical hours.

But whether you make the move gradually, or simply move into a full-time executive position overnight, there can be a loss of job security. When you’re practicing your specialty, and have a following of grateful patients (especially when you own your practice), it seems that nothing can jeopardize your career.

But as an executive, you have a single boss. If your rapport with him or her suffers, your job can slip away .

Easy Come, Easy Go

climbingOur new medical group VP came highly recommended. He had run a large territory for a regional multi-specialty group. He had good communication skills. He was likable and had a good sense of humor.

Special efforts were made to integrate him into the executive team. His orientation went well. Our team spent several of our meetings specifically getting to know him. We tried to help him understand the culture of the organization and of our team.

In less than a year, he left the organization. Similar events occurred in other divisions. New VPs came up through the ranks or were hired from outside. The resumes looked good. They seemed to have great potential. But within a year or two, they were gone.

It was a little unnerving at times. It made me think “how secure is my position?” “How can I prevent that from happening to me?” The issue of job security for an executive in this situation appears to boil down to one factor.

Nine Maxims for Masterful Meetings

Optimize This Prime Management Tool

Not a Good Start

I showed up in the small conference room at 1:00 PM as instructed. I had been assigned by the CEO to this multidisciplinary committee. I was the physician representative and liaison to the executive team. The chair had been assigned in a similar fashion and had added this responsibility to her many other duties as a director in the Patient Care Division.

Important meetings

When I arrived, there was only one other member present. The chair had not yet arrived. I wondered how our meetings were going to be structured. I wanted to review the charge of the committee, the schedule of meetings and format of the agenda. But little of that was addressed. By the end of the meeting, I was not confident in this team’s future success. No agenda had been prepared. The meeting consisted of some informal brainstorming. Late arrivals had to be brought up to speed repeatedly. It ended as members lamented the fact that previous attempts to address the problem were unsuccessful and not well supported by administration. 

Four New Skills Physician Executives Must Learn

Transforming from Quarterback to Coach

As I grew into my role as physician executive, it became apparent that there were several new sets that I needed to learn that were not part of my medical training. As a physician, I was trained to obtain a thorough history and perform a physical exam, to formulate a problem list and differential diagnosis, and develop a treatment plan. In so doing, like other physicians, I learned to:

  • Communicate clearly with the patient and/or her family
  • Quickly consider the pertinent information and prescribe a course of action
  • Direct the rest of the medical team by writing appropriate orders (act as quarterback)

new skills

In a role as manager or administrator, in contrast, my role was to:

  • Coordinate and collaborate with other team members, including peers and subordinates
  • Approach decision-making more deliberately, with more time to collect and review important information and discuss with colleagues and direct reports*
  • Function more as a coach than a quarterback – not writing orders, but developing and implementing plans, accomplishing agreed-upon goals, and guiding direct reports to do the same
  • Involve my CEO in all major decisions

I found that there are at least 4 new skills that an effective physician executive needs to master.