Why MD/MBA?

[cowme]

Hey Folks,
I'm kind of interested in pursuing an MD/MBA, but the more I look into it, I'm having trouble seeing the benefits of an MBA. It seems to me that if you really want to focus on the business side, its hard to see patients and practice medicine. On the other hand, those with MD/MBAs that see patients don't seem to do anything significantly different than the regular MDs...So I ask you, is the extra year of school only for the MBA title, and what are the benefits/options of an MD/MBA? Thanks all and goodluck!

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[BucsFan813]

In theory, an MBA should not change your patient care.

And MBA however, will allow to you have a better understanding of some of the macro and microeconomic issues related to healthcare. If you're interested in private practice/management, entreprenuership, or healthcare leadership roles, it can be a valuable addition.

 

[em783]

Exactly ... having an MBA puts you at a huge advantage because, generally, physicians don't have much knowledge in the money-management arena which greatly affects them in their practice and personal lives.

Not only does having an MBA make you an asset to practices and other insitutions to which you may be applying, but you more importantly have the knowledge on where to maximize and minimize, and how to make adjustments in terms of your finances.

Additionally, you can often qualify for having the position as 'Managing Partner' or other managing positions within your practice (which usually only requires a few extra meetings a couple of nights a week...and, of course, involvement in office politics), which can significantly add to your earnings.

My father, who is a physician, is always griping to me how he wishes I would get an MBA or even just take some finanical management courses because it would help me in the future...and he wishes likewise for himself.

 

[braluk]

the only MD MBA I know does not practice medicine. Granted, I think that people can learn about money management without having an MBA. Personally I think that if you plan on getting an MBA with an MD, its probably because you want to go into the business of medicine. My job last summer involved working under a medical marketing agency who closely works with pharmaceutical companies to educate doctors about targeted medications. That way, you have the MBA to operate the business of marketing, but the MD knowhow to talk to other doctors as a doctor.

Or at the very least, if you do decide to practice medicine, then the MBA would be helpful if you plan to start a company on the outset of medical practice, for example a consultation business, or something of that nature. I suppose it would also be helpful when starting a new private practice group, but I think hiring a consultant to do that for you is equally as helpful without getting an entirely new degree for it.

 

[osucomdustin]

This question belongs in the MD/MBA forum.

 

[notdeadyet]

the only MD MBA I know does not practice medicine. Granted, I think that people can learn about money management without having an MBA. Personally I think that if you plan on getting an MBA with an MD, its probably because you want to go into the business of medicine.

100% agree. A lot of folks seem to justify getting an MD/MBA with the example of knowing how to run a business when you go in to private practice.

If you're still planning on practicing medicine as a career, you will farm out the marketing, accounting, etc. functions of your business. You've heard Darrow's quote "A lawyer who represents himself has a fool for a client"? The same applies here.

An MBA would be a huge assett for the examples folks have cited above, all of which entail leaving clinical medicine as a full time career. But to be gain the business savvy to work with accountaints, advertisers, etc? You don't need an MBA. A class or two will do the job, if not a book.

 

[braluk]

yeah definitely, there are plenty plenty of doctors who have private practices, who do well for themselves as a business, either because they learned to operate a business by working in a private practice that they didn't start themselves, had enough knowhow from experience, or outsourced business management to a consultant and then took over management themselves once they figured out the logistics. Having a business but with an MD degree is an entirely different story, it opens up an entire business sector in medicine that most MBAs wouldn't touch because their knowledge is limited in medicine, and probably wouldn't be looked at with much clout from other doctors if you lack an MD.

 

[em783]

Well-said, braluk.

 

[DrBowtie]

Moved to Med-Biz.

I'd also like to add that the new dean of the medical school here is an MD/MBA.

 

[FamilyMD]

I am an MD/MBA, as some others have posted if you just want to run your practice better and more efficiently, take a couple of courses or read a couple of books. I view MD/MBA's as people who are looking to leave clinical medicine. The MD/MBA is the ticket to nonclinical stuff such as hospital admin or insurance medical directors. For me currently, I practice medicine part-time and work as a medical director for an insurance company part-time. Eventually, I will probably do physician executive jobs full-time, but the key is without an MD/MBA I probably would not have had a chance for executive positions. In short, if you just want a better (profitable) practice, you do not need an MBA, but if you are leaning towards physician executive type jobs, it, while not mandatory, does open many doors you would have otherwise missed.

 

[Shredder]

I want to do it to bail on medicine. Might do something peripherally related to med but IMO opportunity cost of patient care is simply too high seemingly. Med only as a backup/safety net here. If one has an MD and MBA I think opportunity cost of patient care is huge issue. Ideally I'd like to skip out on residency even, but ppl say opportunities are somewhat scant for fresh mdmba's and MD without at least a license is relatively meaningless, and moreover board certification in some specialty

 

[AnesthesiaLogs]

Man, I had this exact question too. In my second year of anesthesia residency, I dropped out of my MBA school at UT Online. I had taken the GMAT, applied and everything in my 4th year of med school.

The reason that I dropped MBA skool was that I found a better way to invest the $14,000 it was going to cost me to get the MBA! I realized that getting an MBA is just a piece of paper and that success really depends on good decisions backed by real action that gets results. Success just doesn't depend on the number of degrees you have.

Think about this:

$70,000 wholesale-price, single family home
Purchased with 10% down or $7000
Rehab cost = $6000
Retail market price = $107,000
Total dollars invested = $7,000 down + $6,000 rehab + $2,000 closing costs (CC) = $15,000
Equity: $107,000 – $70,000 = $37,000 equity
Return on Equity (ROE) : $37,000 equity / $15,000 total dollars invested = 247% return on investment

Also you get cash flow:

$1000 / month rental income or $12,000 / year
Assume a 10% vacancy rate or $1200 / year
Net rental income = $12,000 - $1200 = $10,800
Costs / year: Taxes (@ 3%) = $3000, Insurance (@1%) = $700, Advertising = $20, Mortgage @ 6.13% = $4888
$10,800 – ($3000+$700+$20+$4888) = $2192 cash flow per year tax-free
$2192 / $15,000 total dollars invested = 16.6% return per year

Now my wife and I are enjoying cash flow, thousands of dollars in increased equity, and tax benefits just by buying below market price houses and then renting them out.

To this day, I still don't know what I'd do with an MBA degree as I want to practice anesthesia and continue to accumulate real estate.

Anyone think it would be worth to finish the MBA?

 

[LADoc00]

Man, I had this exact question too. In my second year of anesthesia residency, I dropped out of my MBA school at UT Online. I had taken the GMAT, applied and everything in my 4th year of med school.

The reason that I dropped MBA skool was that I found a better way to invest the $14,000 it was going to cost me to get the MBA! I realized that getting an MBA is just a piece of paper and that success really depends on good decisions backed by real action that gets results. Success just doesn't depend on the number of degrees you have.

Think about this:

$70,000 wholesale-price, single family home
Purchased with 10% down or $7000
Rehab cost = $6000
Retail market price = $107,000
Total dollars invested = $7,000 down + $6,000 rehab + $2,000 closing costs (CC) = $15,000
Equity: $107,000 – $70,000 = $37,000 equity
Return on Equity (ROE) : $37,000 equity / $15,000 total dollars invested = 247% return on investment

Also you get cash flow:

$1000 / month rental income or $12,000 / year
Assume a 10% vacancy rate or $1200 / year
Net rental income = $12,000 - $1200 = $10,800
Costs / year: Taxes (@ 3%) = $3000, Insurance (@1%) = $700, Advertising = $20, Mortgage @ 6.13% = $4888
$10,800 – ($3000+$700+$20+$4888) = $2192 cash flow per year tax-free
$2192 / $15,000 total dollars invested = 16.6% return per year

Now my wife and I are enjoying cash flow, thousands of dollars in increased equity, and tax benefits just by buying below market price houses and then renting them out.

To this day, I still don't know what I'd do with an MBA degree as I want to practice anesthesia and continue to accumulate real estate.

Anyone think it would be worth to finish the MBA?

Where are you where a home costs $70,000? Haiti? Liberia?

AND if you did find a place that was 70,000, who would rent it out at 1,000/monthx12 or $12,000 and not just outright buy it themselves?!

A 70K place would rent for nowhere near 1,000/month. Try more like $300.

 

[AnesthesiaLogs]

Where are you where a home costs $70,000? Haiti? Liberia?

AND if you did find a place that was 70,000, who would rent it out at 1,000/monthx12 or $12,000 and not just outright buy it themselves?!

A 70K place would rent for nowhere near 1,000/month. Try more like $300.

No. I am an anesthesia resident in Houston. We have 4 single family houses and an 8-unit multifamily here in Houston. The properties were purchased either as foreclosures or below the appraisal value. This is why they are so inexpensive.

I do not recommend that you do any form of business because you don't seem to be at the appropriate level yet. The reason many folks rent a house and don't buy is simply that they don't have the down payment required to purchase a house or don't want the trouble and added expenses of insurance, taxes, PMI, maintenance, etc. Therefore, I do not recommend you purchase income producing property as you might end up like that guy in iamfacingforeclosure.com

In addition, the $70,000 house is a foreclosed house. That means it's $10,000 to $40,000 below the market price. And that is how it commands a $1000 rent per month. You can see our last purchase here.

The point of all this is that I dropped out of MBA school while in residency because I knew real estate would be a better internal rate of return than an MBA. I hope this helps the original poster because it's something I had to think about too.

 

[aggernodi]

Hi ya'll... New to this forum thing. I'm actually a full-time private practice ENT and am currently taking time off from work once a week to take classes to get an MBA. I also have no intention of leaving medicine. Given this background, I do have to say that working towards an MBA is definitely helping me out in managing my practice better, more efficiently, and more profitably.

I have no regrets and I'm firing on all cylinders. Furthermore, as a physician, you are also obligated to participate in hospital committees and such in which the MBA again helps.

For those interested in getting an MD/MBA, it's harder to say whether you will feel any benefits as you won't necessarily practice what you learn until you are done with residency training. By that time, you may have forgotten everything.

One thing that I've learned about MBA versus MD is a totally different perspective on how problems are addressed:

Physicians: "Do a randomized, prospective, double-blinded, controlled study; ie, eliminate any and all bias to get meaningful results."
MBA: "Implement what people think will help; ie, bias (or opinions) leads to solutions."

As you can see, there is a fundamental difference and thought process involved. MD/MBA combines both these effective thought processes depending on the situation opposed to being stuck in only one mode of thinking.

 

[xylem29]

The MD/MBA I know practices as a GP part-time, and works as a case manager the other times (coordinating specialist care for a single complex case - b/c left to their own, individual physicians can be uncooperative selfish pricks sometimes, or at least that what I read as some of the negatives). He's also venturing into other aspects of healthcare that require management/leadership - I think the MBA works wonders if you have an enterprising mind, I don't the MBA is needed if all you want to do is learn how to manage your own private practice - if you plan on managing a group practice, or several clinics...that's where it might come in handy.

 

[rstonk]

Hey all-

I just graduated Cornell with a B.S. in Business, and I will be attending Robert Wood Johnson Medical School in the fall.

I just started looking at the M.D./M.B.A. dual degree (I have time before applying, but never hurts to research). I guess I'm exploring this program because I feel that it "makes sense" for me, even though I'm not so sure where I'd go with such an education. As far as I can tell, I have every intention to practice clinical medicine.

My question is: if I plan on practicing clinical medicine, is the extra year / investment in an M.B.A. worth it in terms of career benefits? Specifically, salary, ability to "climb the ladder" (don't mean to sound greedy), other benefits? Or does the M.B.A. only pay if you're going to leave clinical medicine?

Thanks for your help -- I'm just a bit confused about the prospects for M.D./M.B.A.'s in clinical medicine.