In an era of soaring costs and heated debate about the future of health care, a growing number of doctors are arming themselves with a business degree. This makes sense, given that many of the thorniest problems in medicine today are business related. The Centers for Medicare & Medicaid Services reports that the United States spent a staggering $3.3 trillion on health care annually in 2016, which translates to more than $10,000 per person, more than any other country in the world. Yet the World Health Organization ranks the U.S. 37th out of its 191 member nations in overall health-care quality.
Clearly, the system could use a healthy dose of innovation, the kind entrepreneurs are poised to provide. For example, in a bold move, Berkshire Hathaway, Amazon, and JPMorgan Chase recently announced a partnership to launch an independent health-care company for their employees. In the announcement, billionaire entrepreneur Warren Buffett said: “The ballooning costs of health care act as a hungry tapeworm on the American economy.”
Babson-educated physicians agree that entrepreneurial steps are needed. Despite their varying specialties and professional goals, these doctors believe their entrepreneurial training gives them an edge. “If long-established companies don’t continue to evolve, then we will see others coming into this industry and disrupting it,” says Dr. Carolyn Langer, former chief medical officer for MassHealth, the Massachusetts Medicaid program, and a current Evening MBA student.
Doctors need to consider how they compete in their own industry, adds Dr. Renee Edwards, MBA’10, vice president, chief medical officer of Oregon Health & Science University (OHSU) HealthCare in Portland, Oregon. “I believe doctors have to be at the forefront of that conversation.”
Beyond Medical Knowledge
Edwards, a urogynecologist who specializes in pelvic reconstructive surgery for women, moved to OHSU after completing her medical education, residency, and fellowship in Chicago. In 2000, after just one year, she became medical director of its Center for Women’s Health, which Edwards says took a multidisciplinary approach to care long before this was common. “Health care tends to be highly siloed,” Edwards says, but patients don’t think that way. “More and more, medicine is saying, ‘How do we create an experience for the patient that’s basically one-stop shopping?’”
Although Edwards initially felt drawn to medicine to help people, she also found herself engaged by the systems that are an integral part of health care. “I’ve always been interested in considering how all the pieces are interconnected, how we deliver our product and work to improve it, for both the patient and the people working in the system,” she says. But she saw gaps in her business knowledge and so decided to pursue an MBA through Babson’s West Coast program, located at the time in Portland, Oregon. “I needed to look outside traditional medical thinking,” Edwards says.
She loved interacting with fellow students from such industries as technology, retail, and film. “It taught me to think beyond my own knowledge base, to think intentionally about who else I needed on my team,” she says. “In the eight years since I completed my MBA, medicine has become much more about how we work in teams, how we build these multidisciplinary models.”
Edwards believes her time at Babson prepared her for this shift, leading to her recent promotion to chief medical officer. “The more doctors understand the business of medicine, the more they appreciate the pressures that are being applied in health care today,” Edwards says. “Unless we understand those pressures, we cannot be articulate in the discussion.”
Speaking the Same Language
Dr. Art Mourtzinos, MBA’12, was thinking in business terms long before he treated his first patient. A child of Greek immigrants, Mourtzinos grew up in Lowell, Massachusetts, where his family owned a pizza shop. He had an aptitude for math, and his father spoke very little English, so from an early age Mourtzinos helped run the restaurant and then other family endeavors. But his father also urged his ambitious son to broaden his vision for a career.
During high school, Mourtzinos volunteered at a hospital, restocking shelves in the operating room where he watched surgeries unfold on video screens. “I fell in love with surgery,” he says. After high school, he entered an accelerated seven-year program at Boston University, which combined pre-med with medical school. Mourtzinos considered adding an MBA to his course load but ultimately opted out, feeling that med school was challenging enough. He trained as a urologist, completed a fellowship at UCLA in pelvic reconstructive surgery for men and women, and in 2006 came to the Lahey Clinic (now the Lahey Hospital & Medical Center) in Burlington, Massachusetts. Today he is director of the Lahey’s Continence Center, where he maintains a busy practice performing surgeries to correct incontinence, with a special focus on men whose incontinence is the result of cancer therapy and women with continence problems after childbirth.
Despite his intense schedule, Mourtzinos continued to consider an MBA. He had his eye on roles in hospital administration and saw a deeper understanding of business as an advantage, given that many colleagues seemed to lack basic business knowledge. It’s somewhat understandable, Mourtzinos says. “Nobody teaches you those things in medical school because you’re so focused on medicine, on trying to do what’s right for your patients,” he says.
But his ambivalence about earning an MBA wasn’t only an issue of time or energy; Mourtzinos also sensed a bias among some physicians against people with business expertise. He spoke to one hospital administrator, now elsewhere, about his desire to pursue an MBA. “He did not have an MBA himself and wasn’t very supportive,” Mourtzinos says.
More recently, however, Mourtzinos has seen that distrust fade. A new CEO arrived and encouraged Mourtzinos to go after his interest. After earning his Babson MBA, Mourtzinos joined the hospital’s board of trustees and became vice chairman of its physician compensation plan. In much the same way that many doctors don’t know how to read balance sheets or income statements, Mourtzinos notes there’s a lack of medical knowledge among economists and others who work in health-care policy. “Individuals like myself can bridge this gap,” he says. “We can relate to both sides of the equation by communicating with all parties in a language everyone can understand.”
In that vein, Edwards of OHSU spends about 20 percent of her week in clinic, in part to keep her surgical skills sharp. But she also feels obligated to understand medicine from the inside. “How can I be involved in the work of designing a system, looking for performance improvement opportunities, asking providers to do certain things, unless I am also embedded in that work?” she asks.
Alternative Models for Primary Care
One trend in health care involves shifting from a fee-for-service model, which pays doctors per patient visit, to a value-based care model, which pays doctors based on patients’ outcomes. Insurers reward doctors for reducing avoidable hospital admissions for patients with chronic conditions, such as diabetes or cardiovascular disease. This requires doctors and their teams to be more proactive and focus on care coordination and preventive measures, explains Langer. Providers might check in with patients regularly with the goal of intervening if needed before patients become too sick.
That kind of preventive care appeals to Dr. Scott Early, a current Evening MBA student. A primary care physician in Lawrence, Massachusetts, Early worked for many years at community health centers, helping set up programs intended to improve the health of their mostly low-income patients. At the Greater Lawrence Family Health Center, for example, he established the nation’s first residency program sponsored directly by a community health center. It trained young doctors in community health practice and gave the center the resources to expand patient services such as prenatal care. Early says the city experienced a drop in infant mortality in the 1990s, from 17 deaths per 1,000 live births to eight per 1,000, in part because it was easier for pregnant women to see a provider.
He moved to what is now known as Steward Health Care, where he was vice president of family medicine, and then assumed the chief medical officer role at Lynn Community Health Center (LCHC). In both places, he thought about ways to transform the primary care model but found change to be difficult. “I remember endless faculty conversations about how to teach our residents to take care of really sick and complicated patients in 15- or 20-minute visits,” Early says. “Ultimately, I concluded that it wasn’t possible. Good care takes time. Trying to do the impossible was just burning out the amazing faculty and residents we had attracted.”
In 2015, he left LCHC, began his MBA at Babson, and opened his own practice, Kronos Health, in Lawrence. The central idea at Kronos is that spending more on primary care—hiring more practitioners and giving them more time with their patients—ultimately saves money. The U.S. spends an estimated 5 to 6 percent of health-care dollars on primary care. But Early believes that if insurers doubled that amount to 12 percent, patients could receive more attentive care and need fewer costly interventions. He believes this approach also could prune waste. Early quotes an analysis by the Rand Corp., which found that 18 to 37 percent of every dollar spent on health care goes to unnecessary tests and treatments. But when doctors know their patients well and see them often, Early says, these missteps can be more easily avoided, and patients are less likely to need costly emergency department visits or hospital stays.
Today, most full-time primary care doctors have 1,500 to 3,000 patients and see three to four patients an hour, Early says, a dizzying pace that allows little time to discuss complex health problems. After modeling his theory, Early believes his practice would work best with just 700 patients for each physician, allowing 30 to 60 minutes for each visit. But so far, he hasn’t been able to fully implement this vision. Current models, even those that reward doctors for healthy patients, don’t yet pay enough to fund this type of practice. “So far my wife and I have completely bootstrapped this,” Early says. “We are now breaking even, but without me taking a salary.”
Early has visited insurance companies to discuss new payment models, asking that they invest upfront in the potential savings realized from better care. The companies are intrigued but say his practice is too small, asking that he return when the practice is much larger. “It’s a chicken-and-egg dilemma,” he says, “which is why I’ve concluded that we need venture capital backing to grow.” He says that with a “modest” amount of venture capital he could hire additional staff and purchase practices from retiring physicians. “We could get big enough to attract the interest of some of the insurers,” he says, adding that he has been closely watching Iora Health, a Boston-based health-care company with a similar model that launched with venture capital.
Patients and insurers wouldn’t be the only ones to benefit, Early says; doctors would, too. As it stands now, typical primary care medicine is nicknamed “the hamster wheel.” “Providers are running faster and faster and not getting anywhere,” Early says. “Burnout in primary care is rampant.” As a result, a shrinking number of medical students choose primary care. But Early hopes organizations offering saner schedules and the satisfaction of providing stellar care will attract more young doctors back to the field.
Dr. Joe Passanante ’91 saw similar frustration and burnout among emergency-room physicians after working for more than a decade in emergency medicine in the U.S. and China. “I love the adrenaline rush of the ER and being ready for any type of emergency, but there is a point when the night shifts take a toll, and dealing with the human condition in extreme situations takes a toll,” he says.
After seven years in China, Passanante was attending a medical conference in the U.S. when he met a group of ER physicians who seemed unusually enthusiastic about their work. He learned that they had launched an urgent-care company, CityMD, that aimed to provide excellent customer service while fostering a company culture of kindness. After shadowing a CityMD doctor in New York City, Passanante was impressed and joined the staff in December 2013. Since then Passanante has become partner and senior vice president of medical operations, Northwest region; he is based in Seattle, where he has opened five sites in the past two years.
CityMD has 100 sites in the U.S. and competes both with ERs and other urgent-care companies. Feedback from its patients often highlights the speed and quality of care, Passanante says. The average wait time at its facilities is eight minutes for walk-in visits, well below that of most ERs. “Emergency departments have specific triage protocols that place the least urgent cases at the back of the line,” Passanante says. “It’s commonplace for a patient to wait two-plus hours to have their urinary tract infection treated.”
He believes CityMD’s operating model helps keep patients and staff happy. For example, the company hires medical scribes to accompany doctors as they see patients. The scribes take notes and enter all information into the computer system, saving doctors time and allowing them to connect more easily with patients during visits, Passanante explains. A dedicated aftercare team works to get test results to patients and to schedule follow-up care. An emphasis at CityMD on hiring employees who value kindness contributes to a pleasant atmosphere. “When kindness is a shared goal,” says Passanante, “it’s easy for the team to row in the same direction.”
In Oregon, Edwards also is thinking entrepreneurially about ways to improve patient care while holding the line on costs. Next spring, OHSU plans to open a new building devoted largely to surgical care. Increasingly, surgeries have become minimally invasive, notes Edwards, which means less patient recovery time and trimmed coverage from insurance companies. So the new building was designed to move these patients quickly and safely through their procedures and into recovery with fewer staff members. “I created a multidisciplinary team charged with ‘modeling’ this new care concept using an existing floor of our current hospital,” Edwards says, giving the surgery team a place to experiment with different patient-flow and nursing-care routines and time to perfect them before the move.
Much of Edwards’ work as a health-care administrator has been about dismantling the silos common in medicine. This was particularly difficult early in her career at OHSU as she helped expand the Center for Women’s Health, where specialists from many departments worked together. “We struggled a lot because finances follow departments,” she says, and departments were not always willing to share revenue across the multidisciplinary center. “We created new financial and practice models that allowed multiple specialties to work together more efficiently,” Edwards says, though she acknowledges that departments still wrestle with these questions.
“Doctors are not generally encouraged to stray from ‘the way something should be done,’” Edwards says. “We are taught to follow standard protocols. An entrepreneurial education challenges a physician to think differently, to break out of the mindset of following set rules and consider alternate paths.”
Edwards remembers a big shift in her own thinking during her MBA coursework, when she began to consider a new marketing and communications strategy for the Center for Women’s Health that emphasized social media. “We hired a communications person and worked to develop as many direct-to-consumer venues as we could,” Edwards says. She even opened her own Twitter account to address hot medical topics. In the staid world of academic medical centers, she says, these steps stood out.
The Entrepreneurial Difference
Other Babson-educated physicians say they view problems and solutions differently as well. Passanante didn’t take a standard path into medicine or to his current role with CityMD. He admits that after graduating from Babson he was somewhat “rudderless,” drifting without passion between jobs for a few years until he read a 1993 Chicago Tribune profile of a pediatric plastic surgeon. “I thought ‘Wow! That sounds significant.’ I just couldn’t think of a better career than helping babies with birth defects,” he says.
Passanante made an appointment with the dean of the medical school at Northwestern University in Chicago to ask about requirements for admission. “He did his best to talk me out of it,” Passanante says. “But I was absolutely not going to take no for an answer.” So the dean recommended that he take some college-level science courses and find ways to learn more about medicine. Passanante took the classes and became an EMT and a paramedic. He then worked as a lab tech for a DNA researcher and in the Cook County morgue, assisting with autopsies. Meanwhile, he continued to check in with the dean at Northwestern, who eventually gave him the green light to apply. Passanante was accepted and began medical school in the fall of 1998, later opting for a residency in emergency medicine.
He believes the entrepreneurial focus of his Babson education shaped the way he has approached his career as a doctor. “Entrepreneurship is seeing problems and just tackling them, not looking to other people to tackle them for you,” he says. For example, during his residency, Passanante wanted to take an elective in wilderness medicine, but such electives were rare at the time and Northwestern didn’t offer one. “I did what any Babson student would do, and I started one,” Passanante says. He recruited 10 students and used their fees to hire instructors from a top wilderness leadership company. The students received credit for the four-week course, and the following year, says Passanante, the program was adopted by Harvard Medical School, which has run it annually ever since.
Passanante also completed electives that involved working in ERs in other countries, including Turkey, Romania, and Italy. After residency, he accepted a job working in an ER at Beijing United Family Hospital during a time when few U.S.-certified ER doctors were in China. He also was tapped by the Secret Service to serve as a trauma expert in presidential motorcades when Presidents Bush and Obama visited Beijing. In each situation, he loved the challenge of working in unfamiliar territory “without guardrails,” an instinct he says he developed at Babson.
Langer used entrepreneurial thinking to address a gap she saw in the system. Last fall, she entered a Shark Tank-style business competition sponsored by Northeast Arc, an agency that supports adults and children with disabilities, and was one of three winners. In front of a crowd at Boston’s JFK Library, Langer pitched her idea for a program called Pathways to Inclusive Healthcare (PIHC). Modeled on Teach for America, the program now is housed at the Eunice Kennedy Shriver Center at the University of Massachusetts Medical School and invites recent graduates planning to enter health professions to spend a gap year after college working at one of four practicum sites offering services for people with disabilities. “The idea is to generate a pipeline of future health-care professionals who really understand and are enthusiastic about working with this population,” Langer says.
Her idea came from personal experience as the parent of a 21-year-old son, Jonathan, who has autism and intellectual disabilities. Langer was dismayed to learn that as Jonathan transitions out of pediatric care, adult primary-care practices often are ill-equipped to handle his needs. “The staff doesn’t necessarily have the training in how to manage these patients and understand their challenges, often resulting in wide health disparities in disabled populations,” Langer says. Even the floor plan at most adult primary-care practices—offices with large, often-crowded reception areas—can be overwhelming to people with autism, Langer says.
Her goal is to train PIHC scholars before they enter graduate programs about how to meet the needs of people with disabilities. Recently, Langer accepted a new position as chief medical officer of Fallon Health, but she will continue to volunteer her time to launch PIHC. The program currently is soliciting applications from college seniors and plans to welcome its first group of scholars in September.
Paths to New Solutions
The combination of medical and business knowledge also could yield solutions for health-care problems outside the United States. A native of India, Dr. Sthuthi Jebaraj, MBA’18, spent two years working in a small hospital in a poor, rural part of Maharashtra, India’s second-most populous state. She was following in the footsteps of her parents, an orthopedic surgeon and psychiatrist who also worked in Maharashtra for years and instilled in their three children a desire to help others. “I saw that there were many issues with the health-care system in the state, and I wanted to study public health,” Jebaraj says. She received a Fulbright scholarship to earn her master’s degree at the Harvard School of Public Health and then returned to India to work for a nonprofit, World Vision India, where she ran health and nutrition programs for women in poor, rural areas.
In 2013, Jebaraj married an epidemiologist, and following her husband’s job, they settled in the Boston area. She spent time volunteering for a range of nonprofits, learning about poverty and hunger in the U.S., before entering Babson to earn her MBA. Physician friends teased her about going over to the “dark side” of business and profit, but Jebaraj’s coursework led her to see the potential for profit to do good in the world. Understanding finance can help clinics run more efficiently, she notes, and analyzing markets can help target needed care. In Maharashtra, Jebaraj says, her hospital often would run out of government-supplied medicines. So she was intrigued to learn in a supply-chain course about novel methods used in Africa to track medications through the manufacturing and distribution process.
She also has been pondering ways to use web-based technologies to help medical staff in remote regions remain current without the burden of travel. And she sees the need for tools to help entrepreneurs in developing countries share and disseminate information and innovations.
Jebaraj says she and fellow Babson-trained physicians see the challenges of health care as opportunities. “We think of why patients get sick in the first place, how they will afford treatment, whether their home situation will allow them to get better,” she says. “A business education gives us the language and tools to understand the big picture and consider the many avenues to make patients’ lives better.”
Erin O’Donnell is a writer in Milwaukee.