Why Healthcare Needs MDs to Study Business
/Dr. Bob Kocher and Dr. Bijan Salehizadeh trained as physicians and are now both healthcare investors. They shared their stories on Tech Tonics podcast and gave compelling evidence that MDs should study business practices. Dr. Bob Kocher is currently a partner at Venrock and is best known for his work developing the ACA. During his fellowship at the Dana Farber Cancer Institute and ongoing medical training, he came to think that maybe he could help patients more if he made the hospital work better for them by optimizing the system and the decision-making process. The late Jim Mongan, the well-respected head of Massachusetts General Hospital at the time, told Kocher that, “Well, doctors don’t know anything about how to run anything. You can’t add. You don’t understand how hospitals make money. You don’t understand how to manage people. You’re just a narcissistic crazy resident. Go away and get an MBA.”
Kocher eventually pursued management consulting at McKinsey and focused exclusively on hospitals, traveling to 42 different countries to work on hospitals and healthcare systems. Kocher’s bottom line was that, “MDs benefit a great deal from getting business training and that a MBA is one approach that works but that there are many others. Going to McKinsey, Bain, or BCG for a few years can give you a great foundation… MDs need to learn how to use Excel, read a balance sheet, make a financial model, synthesize data into understandable presentations, and understand how value is created for customers and enterprises. They also need to learn how to humbly work on teams, make others’ successful, and add lots of tangible value.”
Dr. Bijan Salehizadeh is now a healthcare investor at a firm he co-founded called Navimed. While in medical school at Columbia, Salehizadeh was inspired by several physician-entrepreneurs and departed for a health IT startup in Silicon Valley. After a couple of years at a large device company, Dr. Salehizadeh decided to pursue an MBA at Harvard and found that the most valuable effect of his time in business school was the “chance to develop my own voice.” He gained confidence about his expertise and ability to contribute, and increased willingness to speak out without perfect knowledge.
The enduring lesson of business school involves leadership, not computer skills, “general management is really about how to make tough decisions in the trenches and how to lead people. To do that, you need equal parts confidence, analysis, self-awareness, and the ability to articulate your thoughts so others are compelled by them.” Salehizadeh was particularly struck by the fact that MDs demand respect in leadership, while CEOs demand their teams to, “argue with them, poke apart their ideas, and churn out the best idea at the end.” A great leader authentically encourages debate, has the confidence and the wisdom to welcome serious discussion. If, MBA training can develop more of these courageous leaders that would be a real value-add, especially in healthcare. For that reason, pre-meds, medical students, and even doctors should consider business training to help practices and healthcare systems run more efficiently.
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