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Department Focus--Human Resources: MBAs Among Us

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Many hospital recruiters are finding that MBA hires are ready for leadership roles more quickly than other candidates.

As the already complicated business of healthcare has grown even more complex and financially challenging in recent years, hospital administrators are increasingly looking for leadership candidates with a strong background in business education. But many administrators say it is simply not enough to possess a thorough understanding of daily clinical operations. The hospital leadership of today also needs to know how to run a thriving business.

When Houston's Memorial Hermann Healthcare System is looking to fill leadership roles in one of the system's 13 hospitals, candidates with a master's of health administration often aren't at the top of the list. Instead, Chief Human Resources Officer Doug Beckstett looks for graduates from the country's top master's of business administration programs.

"We made a major shift after about 15 years of hiring primarily MHAs. With increasing complexity and competition in the marketplace, you really need somebody who can understand those complexities," he says. Specifically, Beckstett says candidates for hospital leadership positions have to be able to examine and understand the complicated financial and regulatory workings of a hospital. "You've got to have someone who can look at the operational issues and the marketplace complexities. MBAs tend to have the business acumen and work experience to understand those intricacies."

Beckstett adds that Memorial Hermann hasn't always found MHA candidates to have the necessary business skills to succeed. "The core reason is that MHAs tend to have a good understanding of healthcare, but they don't have the business experience."

From new grad to CEO
That business experience means MBAs may be ready to assume significant leadership roles more quickly. Beckstett says the candidates he has recruited from top MBA programs like The Fuqua School of Business at Duke University in Durham, NC, have been promoted to significant leadership positions in a relatively short amount of time. He points to an MBA graduate who was brought on at Memorial Hermann as an executive liaison to CEO Dan Wolterman.

"He would stand in for Dan if he couldn't be there, and it was understood that if he asks you to do something, it's the same as if the CEO were asking you," says Beckstett. "Over a two-and-a-half-year period, he was promoted to chief operating officer over a new service line structure, then to business development executive, and ultimately became COO at our heart and vascular institute."

What about MHAs?
Lee Nelson, director of HCA Inc.'s COO development program, says HCA has traditionally considered MHAs for leadership positions, but also began considering MBAs at the inception of the development program in 2000. HCA's program brings a candidate into the system as an associate administrator to be mentored by the executive leadership team over a two- to four-year period to prepare him or her to eventually move into a COO position.

Still, Nelson says there is a place in healthcare for both MBAs and MHAs. "I can't say having an MBA is better than having an MHA or vice versa. We actively recruit from both programs," Nelson says. "One difference is that because most MBA programs require work experience, they tend to give you a group of experienced folks." Nelson also points out that many master's programs offer dual degrees (both an MBA and MHA) or offer MBAs with an emphasis in healthcare. A number of the development program's applicants come from that pool because they already have interest in healthcare, Nelson says.

The risk
Which areas of a healthcare organization are not good fits for an MBA? Beckstett says with the exception of highly specialized clinical roles within the hospital, he can't see any position that an MBA candidate couldn't fill within the system. Beckstett adds, however, that recruiting applicants from the nation's top MBA schools does carry one significant risk: the great demand for talented leaders means your hospital isn't just competing with other hospitals.

"You always run the risk that you are going to train them, and they'll leave to go somewhere else," he says. "There is a small pool of very talented people, and they will have their pick of attractive job opportunities."

Kathryn Mackenzie

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