American Association for Physician Leadership

Professional Capabilities

What Business Competencies Are Needed for the Modern Physician Leader and When

Nital P. Appelbaum, PhD | Cynthia Liang, MD, MBA | Stephen E. Whitney, MD, MBA | Jennifer G. Christner, MD | Theresa Q. Tran, MD, MBA, FACEP | James T. McDeavitt, MD


Abstract:

Changes in payment models, policy, and the need for interprofessional practice require physicians who have complementary skills outside of medicine, such as business skills. To identify comfort-level and use of business competencies and to identify the ideal timing for a business curriculum, a web-based survey of clinical faculty with both medical and business degrees at a single academic institution was conducted in May 2020. Overall, respondents were comfortable applying competencies related to Communication, Leadership, Strategy/Management, and Business of Healthcare/Medicine. Fewer respondents were comfortable with Information Systems, Law and Regulatory Environment, and Accounting. Most respondents said Communication and Leadership competencies should be taught during or before medical school, and Human Resources should be taught during residency/fellowship or clinical practice. Half said Law and Regulatory Environment should be taught during residency/fellowship or clinical practice. Accounting was the only topic rated unnecessary for physicians.




The United States healthcare system has grown increasingly complex and dynamic over the last few decades.(1) The recognition that outcomes frequently are not proportional to resources invested in healthcare has forced us to reconsider how we deliver care, resulting in new policies such as the Affordable Care Act (ACA) and the Medicare Access and CHIP Reauthorization Act (MACRA).

To contain rising healthcare costs, policy reforms have changed both payer and provider structures, partially transforming health financing from a volume-based payment system to value-based payments.(1,2) Navigating this changing environment requires a new type of physician — one who is not only a proficient clinician, but also a business-minded team player who can work in interprofessional teams to coordinate care across different providers and settings.(1) As experts in clinical care, physicians now have an additional responsibility to understand value-based care because of its implications for healthcare delivery.(3)

In fall 2011, the American Hospital Association reviewed the Accreditation Council for Graduate Medical Education (ACGME) and American Board of Medical Specialties (ABMS) competencies and identified several gaps in the skills physicians are taught, namely those in leadership training, interprofessional teamwork, systems theory and analysis, and understanding of medical economics/health policy.(1)

While traditional medical education may not address these competencies, another type of education — a business curriculum — may add value to those gaps identified.(4) In fact, a business curriculum may perfectly complement medical education in preparing the modern physician to work in this new healthcare space.

Integrating Medicine and Business Education

The value of an integrated medicine–business education was initially realized in 1971 with the establishment of the first MD/MBA dual-degree program at the University of Pennsylvania.(5) Since then, the number of MD/MBA programs has increased to 73 across the United States as of 2020.(6)

A business curriculum can address many gaps in current medical education, most prominently leadership training, team building, and conflict resolution and negotiation.(7) Furthermore, business training can lend a greater understanding of the business side of healthcare as it relates to healthcare access, quality, and cost.(7) With business acumen, physicians can gain insights into management and leadership to prepare them for various potential careers, including executive roles in healthcare management, the pursuit of venture capital careers, and leadership within academics.(8)

Studies have consistently shown that physicians with business degrees tend to have higher salaries, more career advancement opportunities, greater professional flexibility, and credibility in a multidisciplinary domain.(5,7)

A business degree also can play an important role in personal development for physicians. For example, some studies have shown that MD/MBA graduates are more confident in their clinical and administrative abilities than their non-business medical graduate counterparts. They tend to be more tolerant of ambiguity and uncertainty, which is critical for success in leadership positions.(9,10) We cannot infer that a business curriculum caused such differences; however, there may be individual differences (e.g., higher tolerance for ambiguity) and self-selection for physicians’ pursuit of business degrees.

Pursuing a Business Degree

There are five distinct stages at which a physician may pursue a business degree while also being exposed to medical curriculum:

  1. During medical school;

  2. During residency;

  3. During the immediate post-residency period;

  4. During the early stages of one’s career; or

  5. During the later stages of one’s career (10–15 years post-training).(11)

Some studies suggest that a dual medicine–business degree during undergraduate medical education (UME) may be ideal because it allows individuals to benefit early on in their careers from the leadership, communication skills, understanding of health systems management, and credibility that a business degree can provide.(9,11)

Others suggest that a business degree would be more valuable to physicians after they have had a chance to work in the healthcare system to experience delivering patient care while balancing quality and cost directly.(12)

Practicing physicians can develop business competencies through professional organizations such as the American Association for Physician Leadership and the American College of Healthcare Executives.

Experiential learning theory emphasizes that an individual’s experience is a key factor in the relationship between their learning and knowledge generation.(13) The theory suggests four phases drive the learning process: 1) concrete experience — doing or having an experience; 2) reflective observation — reviewing and reflecting on the experience; 3) abstract conceptualization — learning from the experience; and 4) active experimentation — planning and applying what you learned to practice.(14)

The experiences of a developing physician during medical school, especially related to business and leadership, can be dramatically different from experiences as a resident or practicing physician. The level of engagement and responsibilities tend to be progressive for physicians, and such unique experiences can impact the learning of business competencies differently at varying stages of career, especially with the active experimentation phase of experiential learning.

Furthermore, most leadership theories focus on developing competencies of those who are already in positions of leadership,(15) which is not often the case for medical trainees. The Conceptual Model of Leader Development (CMLD) proposes that development as a leader is progressive, a foundation set in knowledge structures that progresses into technical and social skills, and ultimately to a more complex stage of integrating knowledge structures to creative problem-solving and systems skills.(16,17)

While the literature has shown that a business degree has tangible and intangible benefits for physicians, less is known about integrating business competencies into medical education outside of dual-degree programs. This descriptive study aims to identify the optimal time for physicians to develop business competencies during their medical careers. To our knowledge, there have been no studies investigating this topic.

Based on experiential learning theory and CMLD, we hypothesized that there might be some business competencies that are more applicable during the later stages of one’s career as compared to other competencies. Understanding variation in what skills are needed for practice and when to learn such skills can help identify the necessary business and leadership training content during different phases of physicians’ career development.

Study Method

Participants and Procedure. Faculty records identified 59 individuals out of approximately 2,789 physician faculty members who held medical and business degrees at Baylor College of Medicine in Spring 2020. Business degrees within the sample that qualified were Master of Business Administration (MBA), Master of Healthcare Administration (MHA), Master of Management Studies (MMS), Master of Business & Science (MBS), Master of Medical Management (MMM), and Master of Science in Health Care Administration (MSHCA). Medical degrees that qualified were Medical Degree (MD), Doctor of Osteopathic Medicine (DO), and Bachelor of Medicine–Bachelor of Surgery (MBBS). Identified medicine–business faculty were emailed an anonymous survey link via Qualtrics (Provo, Utah) in May 2020 with two weekly reminder emails.

Measurement. Survey items included demographic information on leadership experience and time allocation (FTE) across roles. Gender and degree information were available from faculty records, and the Qualtrics function that anonymously connects such external data to survey responses to reduce survey length was used. The information sheet on the first page of the survey and the email recruitment text made respondents aware that their gender and degree information would be linked anonymously to their responses.

Respondents were given a set of 12 business topics and asked to rate how often they used competencies related to those topics (1 = never, 5 = always), how comfortable they felt applying the topics’ competencies (1 = very uncomfortable, 5 = very comfortable), and when during the continuum of medical education a physician should learn the topics (before medical school, during medical school, between completion of medical school and start of residency, during residency/fellowship, during clinical practice, never: topic not needed for physicians).

Each business topic area was defined with examples of related competencies. An open text item asked about the advantages and/or disadvantages of a dual medicine–business degree.

Analysis. We used SPSS (Armonk, New York) statistical software to calculate descriptive statistics (count/percentages). The open-response item was analyzed through general themes of text.

The Baylor College of Medicine institutional review board approved our research protocol through expedited procedures.

Results

Of 59 eligible faculty, 22 (37%) responded to the survey. Most respondents identified as male (n = 16; 73%) and held MBA degrees (n = 18; 82%). There was a wide timeframe during which respondents completed their medical and business degrees; five (23%) respondents earned their business degree between 1 and 9 years prior to their medical degree, two respondents (9%) completed their business degree during their medical school, and 15 (68%) respondents completed their business degree between 2 and 27 years after medical school.

Leadership Experience. About three-fourths of respondents (n = 16; 73%) were in a leadership position at the time of participation in the survey; one respondent said they never held a leadership position, nor did they intend to do so in the future (see Table 1). Types of leadership experience included physician practice leadership (n = 11), hospital leadership (n = 9), and academic leadership (n = 6) (see Table 1).

Comfort with Business Topics and Application. Average composite scores for comfort-level and frequency of application were positively correlated (r = .74, p<.001); comfort-level increased as frequency of use increased in practice. Respondents were comfortable applying competencies related to Communication (n = 19; 86%), Leadership (n = 19; 86%), Strategy/Management (n = 18; 82%), and Business of Healthcare/Medicine (Table 2). Fewer respondents were comfortable with Information Systems (n = 11; 50%), Law and Regulatory Environment (n = 10; 45%), and Accounting (n = 10; 45%).

When it came to how often competencies related to the business topics were used in work, Communication and Leadership (both n = 19; 86%) were used “often” or “always.” In contrast, fewer than a third of respondents used competencies related to Law and Regulatory Environment (n = 7; 32%), Economics (n = 7; 32%), and Accounting (n = 5; 23%).

When Business Topics Should be Learned. There was a wide range of responses and discrepancies on when certain business topics should be learned across the medical continuum (see Figure 1). Most of the respondents indicated Communication (n = 18; 82%) and Leadership (n = 12; 55%) competencies should be taught during medical school or before medical school. However, nearly a third of respondents (n = 7; 32%) felt Leadership should be taught during residency/fellowship.

Figure 1. When business topics should be learned

Most respondents indicated competencies related to Human Resources (n = 17; 77%) would be best learned during residency/fellowship or clinical practice, while half of the respondents (n = 11; 50%) felt Law and Regulatory Environment should also be learned during residency/fellowship or clinical practice. Accounting was the only business topic that respondents (n = 3; 14%) believed related competencies were unnecessary for physicians.

Advantages and Disadvantages of a Dual Degree. Twenty respondents shared information on what they considered advantages and/or disadvantages of a dual medicine–business degree. Most-frequently mentioned advantages included a broader view (n = 7), learning business acumen (n = 5), and insight into business concepts (n = 3).

No themes were generated for the four disadvantages mentioned, since each response was unique (i.e., lack of administration roles for physicians, not valued by organization, knowledge can be obtained on the job, and unable to engage in administration because of heavy clinical duties).

Three respondents mentioned that a formal business degree might not be necessary for all physicians, although some business competencies would be valuable.

Discussion

In a survey of clinical faculty with both medical and business degrees, we examined the most frequently used business competencies for physicians in practice, as well as the optimal timing to learn these business competencies during their medical training.

Our study sample expressed great comfort with competencies related to communication, leadership, and strategy/management, and less comfort with competencies related to law/regulatory environment and accounting. Comfort with the business topics may be related to how often they are applied in practice, considering the correlation between those two factors.

Our study, based on experiential learning theory and CMLD, implies that different business competencies may have more value for practicing physicians if they are taught at different times in their careers. Communication and leadership, for example, appear to be longitudinal concepts that would be more valuable if initially taught earlier during medical school or even before medical school; these competencies may also be good selection criteria for medical training.

In contrast, economics, information systems, and business of healthcare may have more value if taught during medical school due to their foundational nature upon which clinical practice builds. On the other hand, human resources may be optimally incorporated during residency/fellowship training or clinical practice because these skills would be best applied after having tangible work experience.

Certain competencies, such as marketing and financial management, received a split response when faculty were asked when these competencies should be taught. Approximately half thought competencies related to those topics should be taught either during or before medical school, and half thought they should be taught during training or clinical practice. Physicians who plan to pursue a career in executive leadership likely are on a tighter timeline for professional advancement, requiring the early development of business competencies.

Based on the results of this study, we argue that business competencies have a place in medical education throughout its continuum and likely require continuous reinforcement through lifelong learning based on when specific business skills are needed during training and/or practice. However, several considerations must be taken with the medicine–business degree to ensure that students extract its full value.

First, there must be greater integration between the medical and business institutions in joint medicine–business curricula. Current medicine–business curricula are fragmented, with minimal communication between the medical and business sides. As of 2015, only 10 of 65 medicine–business programs surveyed offered integrated coursework between business and medicine for dual degree students, and only six programs offered independent projects that bridged medicine and business.(18)

Greater integration between the two curricula would allow for more tailored coursework and mentorship. Students could apply their business studies directly to clinical practice in the classroom setting and in healthcare-related internships. Traditional business degrees also include coursework that may not be directly relevant to medical practice.

A second consideration for a joint medicine-business curriculum is that there must be greater integration between UME and graduate medical education (GME) when it comes to business education. As with clinical skills, business skills may grow “stale” if they are not used or reinforced. To retain the value of their business training, medicine-business graduates should receive continued business education throughout lifelong learning experiences during residency/fellowship and in continuing professional development (CPD) during practice.

Studies consistently have shown that residents want business training, but it currently is insufficient to prepare them for a future in this changing healthcare context.(19–21) While ACGME recognizes “systems-based practice” as one of the six core competencies, it does not explicitly mandate business training as a core element of residency training.(2) Consequently, business training in residency varies significantly from program to program.(22–24)

Duke University offers the Duke Medicine Management Leadership Pathway, a unique opportunity for medicine–business graduates.(25) This program specifically recruits residents with an MBA, MHA, or prior management experience and develops a tailored curriculum for residents to further develop their management and leadership skills in residency. Furthermore, the program allows residents to interact with senior institutional leadership and work on longitudinal projects relevant to healthcare management.

Opportunities such as these provide immense value to medicine–business trainees as they enter their clinical practice and even transitional roles such as chief resident. The chief resident position, akin to a middle manager role, spans clinical, administrative, and educational functions and often requires leadership, communication, and human resources competencies.(26)

Three faculty members in the sample also indicated that a formal business degree may not be necessary for all physicians; rather, learning select business foundations throughout UME and GME would be sufficient and valuable. For example, integrating concepts of leadership, communication, business of healthcare, and economics into the UME curriculum as early as pre-clinical years would provide immense value for physicians as they begin their careers.

Leadership has been recognized as an essential skill for physicians to navigate an increasingly complex healthcare system, and medical schools across the country have started implementing leadership curricula in UME. However, as of 2017, the prevalence of such leadership curricula in a survey of 88 medical schools was still barely more than 50%,(27) indicating the potential for continued expansion and growth.

Our study had several limitations related to survey research. The descriptive nature of the data is confined by our sample of clinical faculty who have both medical and business degrees within a single academic institution. Perspectives of physicians who do not have business degrees may be unique, especially those who have no interest in the business aspects of medicine.

Response bias is also of concern with survey design, where social desirability bias may drive responses from a population that has already placed value on business competencies in medicine.

Finally, while we did not get a large response to our survey, we considered our sample a group of subject matter experts based on their level of training as attending physicians.

Future research includes a longitudinal and multi-institutional study of medical students’ business competencies through the medical continuum of UME, GME, and CPD regardless of career path. While snapshot survey studies point out issues and perspectives within a specific time, a longitudinal approach would allow more contextual factors to emerge and appropriately design a business curriculum tailored for medicine.

While our study pulled from the medicine–business curriculum, further research is needed to identify the core business topics needed for all practicing physicians (e.g., communication, leadership, introduction to healthcare systems). Another avenue of study includes qualitative interviews of physicians currently in administrative roles who did not obtain a business degree. Understanding the career trajectory of such individuals could further identify when certain business competencies are needed along with the professional development of a physician.

From a practical standpoint, a work analysis of physicians in business roles may help identify competencies specific to certain roles and overarching business competencies needed for physicians regardless of career path.(28)

Conclusion

In our dynamic healthcare system, physicians now require additional training beyond clinical medicine. To adequately train these physician leaders, we must improve the integration of our medicine–business curriculums as well as promote lifelong learning around business competencies for physicians.

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Nital P. Appelbaum, PhD

Nital P. Appelbaum, PhD, is an assistant professor, Department of Education, Innovation and Technology, Baylor College of Medicine, Houston, Texas. Nital.Appelbaum@bcm.edu


Cynthia Liang, MD, MBA

Cynthia Liang, MD, MBA, is a pediatrics resident, Department of Pediatrics, University of Pittsburgh Medical Center, Pittsburgh, Pennsylvania.


Stephen E. Whitney, MD, MBA

Stephen E. Whitney, MD, MBA, is an assistant professor, Department of Pediatrics, Baylor College of Medicine, Houston, Texas.


Jennifer G. Christner, MD

Jennifer G. Christner, MD, is associate professor, department of pediatrics and dean, School of Medicine, Baylor College of Medicine, Houston, Texas. Jennifer.Christner@bcm.edu.


Theresa Q. Tran, MD, MBA, FACEP

Theresa Q. Tran, MD, MBA, FACEP, is a course director, Department of Emergency Medicine, assistant professor, Baylor College of Medicine, Houston, Texas.


James T. McDeavitt, MD

James T. McDeavitt, MD, is senior vice president and dean of clinical affairs, professor, Department of Physical Medicine and Rehabilitation, Baylor College of Medicine, Houston, Texas.

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