Does an MBA Enhance a Physician's Ability to Manage a Medical Practice?

By Sohn, Norman; Germain, Mark | Medical Economics, January 25, 2011 | Go to article overview

Does an MBA Enhance a Physician's Ability to Manage a Medical Practice?


Sohn, Norman, Germain, Mark, Medical Economics


Can a physician improve the management of a medical practice by obtaining a master of business administration (MBA) degree? My experience illustrates the value of an MBA education in the management of a small medical practice. While still in the MBA program, I (Norman Sohn) faced a formidable task of purchasing approximately $450,000 of colonoscopy and endoscopy equipment for my fiveperson colorectal surgical practice in New York City. I think it is highly likely that without my new knowledge and information, I would have accepted the endoscope manufacturer's lease agreement. It appeared to be reasonable, efficient, and attractive.

I had just completed a course in corporate financial management, however, and it included the development of a spreadsheet model of lease versus purchase analysis. When I carefully analyzed the lease proposal, I appreciated that this superficially attractive lease came with an unstated interest rate of approximately 14%, substantially higher than commercial interest rates. I was fortunate that, at that time, interest rates were spiraling downward, and I financed the purchase with a bank loan and saved approximately $100,000. In addition, after 5 years- the length of the proposed lease agreement- I harvested the salvage value of the equipment, much of which still had substantial useful life left. I also restructured the office pension/401(k) plan and saved another $100,000 annually without reducing my contribution.

You may be looking at similar issues in your primary care practice and wondering whether the physician who has earned an MBA has an advantage over the doctor whose business acumen is self-taug ht and/or learned from mentors and hands-on experience.

MATERIAL AND METHODS

The question of whether one needs an MBA to successfully run a practice has been asked frequently. In March 2010, an ophthalmologist posed this question to Medscape's physician audience: 'Tor those of you with an MBA, has it been helpful for your practice? Physicians receive no training in running a business, and I always considered getting an MBA. Do you recommend this?"

Our research was conducted to determine physicians' feelings about MBA programs. Each response was evaluated as either positive or negative regarding the contributions the MBA education made toward practice management Several of the responders had other management degrees in lieu of an MBA, such as an MPH. Of these, all had a variable amount of financial education incorporated into the coursework. Physicians with MBA, MPH, and other similar degrees were all grouped together and categorized as MBA.

The results were deemed positive when the respondent believed that the MBA program contributed positively toward small practice management. Because many of the responders had not had MBA training, they responded positively when they anticipated that such training would be beneficial in practice management A negative response meant that the MBA program was not or was not expected to be helpful in practice management

WHAT WE FOUND

Between March 28, 2010, and May 9, 2010, 87 individual physicians submitted 120 responses. Of the responders, 48 individuals (55.2%) had MBAs or similar degrees, and 39 individuals (44.8%) did not have an MBA or similar degree. All of the latter and those in MBA programs who were to receive their degrees shortly were categorized as having an MBA. Of those with MBAs, 35 individuals (72.9%) believed the MBA program significantly contributed to their skills as small practice managers, whereas 18.8% said that it did not. Sufficient information was lacking for 8.3% of respondents to come to any conclusion for this question.

In addition, 56.4% of the non-MBA physicians believed that an MBA degree would not enhance their practice management compared with 18.8% of the MBA physicians. Likewise, 72.9% of the MBA physicians were of the opinion that their practice management was enhanced by the business degree. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Does an MBA Enhance a Physician's Ability to Manage a Medical Practice?
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.