Preventive Medicine : Doctors Exercise Survival Instinct by Seeking MBAs in New UCI Program


Once a month the wealthy doctors spend a long weekend at Orange County's Hyatt Newporter in rooms overlooking the swimming pool and nine-hole golf course. But that's about as close to those amenities as they get.

The doctors are not at the luxury hotel for respite, but for what some regard as survival training: They are earning a master's degree in business administration.

The group of some 50 doctors, whose average annual income is $230,000, is the inaugural class of UC Irvine's Health Care Executive MBA program--one of two of its kind in the country. UCI launched its program in January, joining the University of South Florida in offering the nation's only advanced business degrees designed for physicians.

"I haven't seen the tennis courts, the in-room movies or the golf course," said Jerald Waldman, 50, a surgeon who, like his classmates, devotes 14-hour days to business studies at the monthly gathering. "The work is too intensive for that."

The temptations of the hotel will be a thing of the past in a few years when UCI moves the program on campus. Right now, there's simply no room, officials said.

The university began the two-year, $48,000-program as a way to capitalize on physicians' need for business acumen in a marketplace dominated by managed-care systems.

"The MBA is really hot," said UCI Professor Paul Feldstein, who fielded 2,000 inquiries about the program last year. "Physicians want to get control back, and they know the way to do it is through the business end."

Although many universities for years have reported a steady increase in the number of physicians enrolling in traditional MBA programs, which also take about two years to complete, experts predict programs tailored to physicians will become even more popular.

The University of South Florida is considering doubling the size of its physician-MBA class to 80, and the University of Utah is developing a similar program that may begin next year.

Twenty years ago, the health-care system was ruled by doctors in small private practices who charged fees for services. But enormous pressures, chiefly from big employers grappling with skyrocketing insurance costs, have radically altered the landscape.

HMOs and other managed-care systems have physicians who work under contract with large corporations and administrators who set fees and guidelines for service and treatment. These kinds of operations have been supplanting private practices for the past 10 years and have left many physicians angry and bewildered.

"Would you ever think of having a nonbanker in charge of the banking industry?" said Paul Smith, a Long Beach obstetrician-gynecologist in UCI's program. "Crucial medical decisions are being made by people who have never dealt with patients."

Said Marian Hill, director for the University of South Florida's MBA program: "What's drawing people to our program is a tremendous sense of uncertainty. They don't want to be painted into a corner by misjudging what's going on now. They want to have options. They want to survive."

Some doctors view business skills as a wise preventive measure against the growing power of managed-care companies. They are banking on their MBAs to make them more competitive in their current jobs or prepare them for administrative or medical-related business careers.

Especially vulnerable to the changes have been medical specialists like Waldman, an orthopedic surgeon. The new managed-care systems tightly restrict the use of such highly trained--and higher-paid--specialists.

Income in some traditionally profitable specialties--cardiology and orthopedics, for example--plummeted 30% to 40% in 1995. Waldman said south Orange County lost a quarter of its orthopedic surgeons last year.

Waldman had to adapt to survive. When he started his Mission Viejo practice, 95% of his patients paid on a fee-for-service basis. Now, it's down to 5%.

"We have to work harder and see more patients to cover our overhead," said Waldman. "We have to learn to run a much more efficient organization. We have to become businessmen."

Waldman is considering moving into an administrative post for a managed-care organization once he obtains his MBA. In the meantime, he hopes the program will strengthen his negotiations with insurance companies.

"We need to understand where they are coming from, what forces are driving them," Waldman said. "This program is giving us the language to speak on their level."

The physicians read up to 80 textbook pages a day trying to become fluent in "business-speak." Professionals who haven't been in school in decades are finding themselves poring over such topics as accounting, marketing principles and management of complex organizations. "It's not like reading a novel," said Smith, who is 55.

Students, who spend 20 hours a week on studies, quickly discover school can be very taxing when combined with work and family. Because they do the bulk of their studying outside class, students keep in close contact with professors through e-mail.

Most demanding of all are the monthly class gatherings at the Hyatt. Students check in at 5 p.m. Thursday and don't leave until noon Sunday. A typical day includes lectures, in-class assignments and intensive research.

"We even have speakers at dinner," Smith said. "The whole weekend is a blur. It's incredibly concentrated."

Though their workload is considerable, the health-care MBAs are catered to in ways that would make other students envious. The students, whose average age is 44, are automatically registered for courses and are given computer laptops, hand-delivered textbooks and special assistance in library research.

"We make it easy for them," Feldstein said. "They don't have time for a lot of this stuff. They wouldn't put up with it anyway."


UCI's program also accepts health-care professionals who aren't physicians. But such students account for only five of 54 spots in the class.

Nurse practitioner Linda McCutcheon enrolled in the program to capitalize on the rise of managed-care organizations--a system that has largely benefited her cost-effective profession.

"We are going to be more and more in demand by managed-care systems," said McCutcheon, 46. "It's important they be integrated into the health-care system appropriately, though, and not misused."

Once health-care professionals and physicians are armed with business degrees, what then?

"They've been complaining that health-care decisions are being made by people without a health-care background," Feldstein said. "This will give them a chance to see if they can do any better."

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