It seems today that the C-suite of hospitals and medical facilities is filled with an alphabet soup of M-degrees: Master's of business administration (MBA), master's of medical management (MMM), master's of public health (MPH), and master's of health administration (MHA).
More physician executives are currently pursing post-graduate business degrees, according to a new report, 2009 Physician Executive Compensation Survey, from Cejka Search, a healthcare executive and physician search organization, and the American College of Physician Executives (ACPE).
"There is a marked differentiation of physician [executives] that have MBAs and those that don't," said Lois Dister, executive vice president and managing director of Cejka Search in St. Louis about this year's report based on 2008 data.
Currently, one-third of physician executives (33%) possess an MBA, MMM, MPH, or MHA, according to the report. Based on a survey of more than 2,000 members of the ACPE, researchers found the following data:
- 53% of physician executive respondents have an MBA
- 28% have an MMM
- 13% have an MPH
- 6% have an MHA
They most often fill the roles of medical director, chief medical officers, division chiefs and department chairs, and vice presidents of medical affairs.
Advanced career options
Why do physicians spend the extra time and money for advanced business and management degrees? For many, it's a pathway to advancing their career.
"More and more, I'm hearing that a master's or post-graduate business degree is required," said Dister.
Although a growing number of physicians are taking the helm as CEOs, it's rare that these physicians do it without formal financial education. The M-degree is becoming the prerequisite to becoming a CEO or another high level leader.
Some physicians ask themselves the question, "Is an MD enough these days?" Unlike the practice of medicine, which requires formal education and a diploma as the stamp of approval, there's no such degree requirement for physician executives—yet.
"I used to say that experience trumps an MBA. Now, it's changed. Now, for most of my clients that are true physician executives—a top leadership role in a healthcare organization, like a chief medical officer, chief medical information officer, CEO, or chief operating officer—it's a ticket to enter into the game. You can't even be interviewed without it. It's a qualification," said Dister.
The old model is dying. While physicians used to learn business skills on the job, doctors are today learning about practice management in the classroom.
"If you go back in time, [people] got this training through the school of hard knocks. People picked up these skills the hard way with on-the-job training, either teaching themselves or having a mentor," said Jonathan H. Burroughs, MD, MBA, FACPE, CMSL, senior consultant at the Greeley Company in Marblehead, MA.
"There's really a better way of doing it now because we can systemically get that education before we go into the board room or the C-suite," he said.
After earning his MD from Case Western Reserve and receiving certification as a physician executive from ACPE, Burroughs went on to earn his MBA business degree from Isenberg School of Management at the University of Massachusetts. Altogether, Burroughs has been in school for 10 years for clinical and management education (four years of medical school, four years of internship and residency, and two years at business school).
Compensation
When asked if money was a motivating factor to hit the books again, Burroughs said, "Believe it or not, I did not purse it for money."
"Physicians generally make more money practicing clinical medicine than they ever will at any management position … I wanted to dispel that illusion that if you get an MBA, you make more money," he said.
Although there were no golden handcuffs for some physicians pulling them toward business school, the Cejka Search survey indicated that physician executives with advanced degrees does, in fact, correlate to a better salary.
With an average salary of $288,000, physician executives earn more based on their degrees. For example, they earned the following amounts compared to those who didn't have a post-graduate degree:
- An average of 11% more with an MBA
- An average of 10% more with an MHA
- An average of 8% more with a MMM
Talking the talk
That extra salary acts as compensation to physician executives who possess business and management skills.
Physicians who possess duel degrees can act as a liaison among physicians, the medical staff administration, and the board who all communicate very differently—some in clinical terms, some in business terms.
"Having this financial background enables you to become bilingual," to speak "the language of the spreadsheet," as Burroughs called it.
Fixing healthcare in America
Although it varies by individual, most physicians ultimately take on the task of the M-degree because they see it as a way to fix healthcare, according to Barry Silbaugh, MD, MS, CPE, FACPE, and CEO of the ACPE.
"Everyone is aware of the deficiencies in our healthcare system and what needs to be done about it," he said.
Silbaugh said the extra work can be onerous, but rewarding.
"It's a lot of extra work and a lot of extra schooling, but it's worth it. Those of us that decide to do this is because we see a system that is dysfunctional in many ways, and we want to heal a system, just like when we heal patients," he said.
Karen M. Cheung is associate editor at HCPro, Inc., contributing writer for HealthLeaders Media, and blogger for HospitalistLeadership.com. She can be contacted at kcheung@hcpro.com.