Author: Jennifer Johnston

It’s a four-minute walk down 21st Avenue South from Vanderbilt’s Owen Graduate School of Management to the Vanderbilt University School of Medicine.

While the two schools once seemed worlds apart, an increasingly vital partnership has resulted in degree programs, hands-on learning and collaborative research projects that seek to educate the health care leaders of the future and help answer the burning question for today’s medical providers: How do we do more with less?

Massive challenges face health care systems across the country. The Vanderbilt University Medical Center alone has been challenged to make $250 million in budget cuts in less than two years, yet still maintain the high quality of care, innovation and research for which it has become known.

“The future of health care is going to be in answering the question, ‘How do we effectively deliver the care that’s needed to an aging and growing population and do it with less resources?’” says R. Lawrence “Larry” Van Horn, associate professor of management and executive director of health affairs for Owen. “The answer to that is not a silver bullet. It’s the blocking and tackling of running a business efficiently, and that’s an opportunity for a business school and a medical school to partner together.”

Owen has already built a foundation in helping future health care leaders understand the science behind health care management. Dr. Oran Aaronson, a neurosurgeon who just completed Owen’s master of management in health care in May, is putting that business science to work as the new director of the Vanderbilt Spine Center.

“You know the joke, this is not brain surgery? Well (management) is, and it’s different and it’s hard,” Aaronson says. “These are very specialized skills that you need and they are very important skills to have now. Health care is one of the most complicated systems out there.”

Productive agents for change

Challenges in health care management are not going away. Neither is the Affordable Health Care Act, something practitioners and politicians alike should “accept and move on,” Van Horn says.

A desire to more effectively train the next generation of clinician leaders among the already time-strapped health care professionals at Vanderbilt University Medical Center led to the formation of Vanderbilt’s Master of Management in Health Care program in 2008.

“We started about five or six years ago knowing we needed to develop a training program for midlevel managers to improve their knowledge and their sophistication,” says C. Wright Pinson, MD’80, deputy vice chancellor for health affairs and CEO of the Vanderbilt Health System. “We had always sent a lot of employees out of Vanderbilt for coursework. Creating the MMHC was a way for us to invest in our own management team as well as our employees’ personal development.”

“The amazing thing is that we had a conversation in October, and by the following June, we had our first class enrolled,” Pinson marvels. “It’s a statement of the need that we had and a statement that both the Medical Center and Owen were very responsive.”

The master of management in health care is a one-year graduate degree program designed especially for managers, health care practitioners and executives in health care organizations. Through intensive classes one night a week and one weekend a month, the program delivers the fundamentals of business with a focus on developing interdisciplinary leadership and robust management skills.

The program has graduated five classes with an average of 30 students in each. Many are Vanderbilt employees, but an increasing number of students in each class—as much as a third—come from outside health care organizations. That diversity contributes to the richness of the classroom experience.

“As more years pass and as more have the experience, the better it gets,” says Pinson, who earned his MBA in 1976 before entering medical school, an unusual path for those times.

“We’re not only investing in ourselves but other people’s future,” he says. “We are looking for people who can make innovative changes and resolve difficult issues. Some of those may be huge and dramatic and major, nationally. A lot of it will be small and incremental. We are asking these individuals who take an interest in business training to shape the future.”

Clinician leaders

Receiving her master of management in health care was “a dream come true” for Barbara Sanders, MMHC’12, who worked as a nurse for many years before jumping into MMHC classes.

“Returning to school after being in the workforce for many years, you wonder if you’re going to be able to keep up, but honestly, it was the most fun and challenging year of my life,” Sanders says. As director of perioperative administration for Vanderbilt University Medical Center, she is involved in capital and strategic planning, operation redesign, and construction and renovation project management.

Sanders says she found immediate benefits to the Owen coursework by using a more analytical and leaner thought process to solve problems and achieve results in real time.

“When we renovate or create ORs, I’m now looking at projects in different ways,” she says. “What are the things we can standardize? How can we have what we need and remain cost-efficient? How do we create an experience that is streamlined for the patient?”

Recent graduate Aaronson is also associate professor of neurological surgery and residency program director for the Department of Neurological Surgery.

“My message that I’m already delivering to my residents is: ‘We are working toward a common goal. It’s not us against them,’” Aaronson says. “We have to consider whether we are really delivering care to the patient that’s not just good for the patient but also cost-effective.”

Today’s health care delivery is exceptionally complex and medical professionals need to understand better those complexities. Physicians will need to learn to work in teams and learn from all disciplines, including management, he says. “The people who are driving this today have to communicate clearly. They have to get people on board. Otherwise, it’s not going to happen,” Aaronson says.

The business of health care

MBA students who want to focus on the vibrant and growing business of health care benefit from Vanderbilt’s medical excellence and Nashville’s status as a health care capital. The full-time Health Care MBA provides the basics of business education along with immersion coursework and experiences specific to health care management. Launched in July 2005, it graduates about 29 students each year.

A new facet of the degree is the Health Care MBA Residency program, which provides opportunities for Vanderbilt MBA students to engage in actual problem-solving situations for local health care organizations.

The residency provides the organizations with students who plan and develop in-depth projects. The Health Care MBA students work with the health care organizations on a weekly basis during the spring and then full-time in the summer. If needed, they perform follow-up work through the fall months.

The program started with a phone call between Van Horn and Derek Anderson, director of transformation and innovation for Monroe Carell Jr. Children’s Hospital at Vanderbilt.

“We had this talent pool sitting there,” Anderson says. “That was really the motivation. We felt we could give them an opportunity to really sink their teeth into something.”

Current residency partners include Community Health Systems, Heritage Group, Quorum Health Resources, Vanderbilt Transplant Center, Vanderbilt University Medical Center, Vanguard Health Systems and the Children’s Hospital.

On-time surgery improvement

Cody Schmits, MBA’11, was one of the first residency interns. His project centered on surgical scheduling for outpatient services at the Children’s Hospital, working with physician and nurse leaders to get the first patients of the day into surgery suites more quickly.

Schmits laid the procedural groundwork that led to on-time, first-case starts improving to nearly 95 percent. Previously, they had been about 15 percent, Anderson says. Improving on-time first-case starts saves money, increases efficiency and reduces delays for other patients throughout the day.

Schmits enrolled in the Health Care MBA program to help transition from a career in engineering and construction. He now works in health care consulting through Atlanta-based North Highland Worldwide Consulting.

Anderson points out that the residencies are not shadowing. “This is hands-on,” Anderson says. The residencies also allow the students to learn if health care is truly a match for them. “They just don’t come and analyze data. We’re interested in making change happen. And that’s work.”

Both physician and MBA

Within the past three years, Vanderbilt’s MD/MBA program has seen increased interest among students. Designed to train the next generation of physician leaders in the science of business, the program graduates new physicians who are also MBAs.

Future doctors increasingly recognize the need to know more than just the science of medicine, which may explain the heightened interest in joint degree programs, including the MD/MBA, says Dr. Bonnie Miller, senior associate dean for health sciences education at Vanderbilt School of Medicine.

“To lead in academic medicine, I think we will increasingly find that additional formal training will be necessary to augment clinical training,” Miller says.

“If you’re really interested in leadership, maybe there’s not a better time. We’re really turning the Titanic. We’ve got an unsustainable system and we’re trying to rapidly change it into something more effective and more efficient, and we need people to take leadership roles.”

An average of four students complete the MD/MBA program at Vanderbilt each year. Miller would like to see that trend continue, with more students entering the program with the intent to pursue the joint degree.

MD/MBA students become “a cohort within a cohort,” taking an extra year between the third and fourth years of medical school to concentrate on business disciplines. Their electives, research projects and outside interests gear toward business offerings as well.

Different perspectives

First-year emergency medicine resident Ryan Fritz admitted he never considered pursuing a joint degree when he first entered medical school. Fritz, MD’13, MBA’13, worked in management consulting for several years after college. “I felt like I already had that experience,” Fritz says.

But during medical school clinical rotations, he became interested in the inefficiencies of health care. “It doesn’t take long to see there’s a ton of waste and a ton of inefficiencies. It’s understandable, but it exists,” he says.

“As a medical student, you learn a lot of basic sciences and pathology and how to treat patients, but little of economics and policy. I began to see there would be a lot of value in understanding that,” Fritz says. “You don’t need to have an MBA to be a better leader in medicine, but it certainly is a great start.”

Alon Peltz, who received his dual medical and MBA degrees from Vanderbilt in 2012, says his business training has already transformed his approach to clinical work.

“My viewpoint now is, ‘How can we, in the context of improving clinical care for this patient, also think of the systems issues behind it?’” says Peltz, now in the second year of a three-year pediatrics residency at Boston Children’s Hospital and Boston Medical Center.

“I sometimes wonder how I would have perceived this (residency experience) had I not had the business education I had at Owen. And I wonder what that lens would have looked like, because this one is so different. In a way, I don’t think I could go back to the old one,” he says. “It’s fair to say my approach to medical care is very much shaped by my experience in business school.”

At Boston, Peltz has embarked on a quality improvement study, working with a group of medical students conducting a root-cause analysis to determine why certain patient populations do not adhere to follow-up appointments.

“This is a small part of many quality improvement initiatives here but it is nice to contribute clinically as well as administratively,” he says.

In addition to classes, medicine and business students have the opportunity to explore outside research with professors, something that Peltz and Fritz pursued. The university also has numerous organizations, such as the student-run Medicine and Business Interest Group and Vanderbilt Health Care Club, as well as the Vanderbilt Health Care Improvement Group, an interprofessional community of Vanderbilt education, management, medicine and nursing students.

Having business-minded students in medical school classes contributes a great deal to the learning atmosphere, Miller says.

“Students learn from each other so much,” she says. “We talk about diversity a lot in the School of Medicine. What we really want are diverse skill sets and interests. Maybe not everyone can get an MBA, but everyone else can benefit from those who do.”

Core expertise

The strength of the overall Owen, School of Medicine and Medical Center partnerships is also buoyed by faculty who delve into the complex issues of the day with research projects.

Research ranges from improving quality of care by reducing inefficiency to the impact of industry consolidation on health care. Other projects consider patient satisfaction as well as the Affordable Care Act’s effect on implementation of electronic records (see sidebar, Researching Health Care).

It’s not surprising that Owen faculty are drawn to issues regarding health care. The region has a robust health care industry—one of the first for-profit hospital corporations was birthed here—and Vanderbilt ranks in the nation’s top 10 in National Institutes of Health funding.

“Nashville is the capital of health care delivery. That’s very much what we market and sell here,” Van Horn says.

The core expertise from Vanderbilt’s medicine and management partnership is spilling out into the Nashville community. This year marked the inaugural class of Nashville Health Care Council Fellows, co-directed by Van Horn and Dr. William H. Frist, a physician and former U.S. Senate majority leader. The annual initiative is designed to identify, nurture and engage Nashville’s next generation of health care leaders.

“Nashville couldn’t be a better environment for this kind of training,” Pinson says. Owen’s degree programs and partnerships between Vanderbilt’s business and medical sides challenge tomorrow’s leaders to devise new ways to solve current and future issues.

Dean Eric Johnson, who researches how information technology can improve health care quality and reduce cost, sees endless opportunities for future partnerships between management and medicine. Discussions with his colleagues in the Medical Center began almost immediately after his arrival at Owen.

“They rightly realize there is a lot of opportunity and it’s time to seize it,” he says. “We’re already dreaming about the next big thing we can do.”

Management students in health care tracks at Owen have the advantage of taking courses from professors who not only know their subject but are also adding to best practices and the national policy discussion. Here are just a few examples of faculty researching health care issues, particularly those that focus on improving efficiencies.

How does health care consolidation affect pricing?

With Luke Froeb, the William C. Oehmig Professor of Free Enterprise and Entrepreneurship, Larry Van Horn is working to quantify and evaluate industry consolidation in health care. Froeb and Van Horn measure how consolidation influences market power and pricing.

A key concern, explains Van Horn, associate professor of management and executive director of health affairs, is whether increasing consolidation results in undue market power for providers or greater efficiencies that lower costs, a question that any merging or consolidating delivery system must face. That concern is of particular interest to the Federal Trade Commission in evaluating market power versus efficiency in health care consolidation.

Van Horn is also collaborating with two Vanderbilt University Medical Center physicians, Dr. Matthew Resnick, assistant professor of urologic surgery, and Dr. David Penson, the Paul V. Hamilton, M.D. and Virginia E. Howd Professor of Urologic Oncology, to investigate how Medicare coverage potentially affects the likelihood that patients receive treatment.

“What we find very clearly is that patients or patients and providers hold off addressing certain medical issues until age 65, when there is a precipitous spike once Medicare is in place,” Van Horn explains. The challenge is to determine how to change incentives so that patients seek care when it is clinically appropriate, he says.

The research team also has studied outcomes among prostate cancer patients treated with surgery versus radiotherapy.

Encouraging compassion reaps benefits

Tim Vogus, associate professor of management, looks at compassion practices and their impact on patient perceptions of their care experience.

“You might think compassion and cost effectiveness would be incompatible. But the two drive in the same direction,” he explains.

Compassionate practices, or care, represent the extent to which a hospital recognizes and rewards compassionate acts by its caregivers—and supports its employees in coping with the stresses and traumas experienced at work. Vogus has found that compassionate care leads to higher quality and more personalized care, which in turn leads to incentive payments from the Centers for Medicare and Medicaid Services (CMS) value-based purchasing program.

“When hospitals implement support for compassion practices, they are actually associated with patient perceptions of higher quality care and a greater likelihood of recommending that hospital to others,” he says. In addition, overall ratings of quality of care improve, and both of those markers are criteria for determining the incentive payments awarded under the CMS program.

Just recognizing people who have gone beyond the call of duty—something that costs hospitals little or no money—significantly improves the ability of the entire organization to offer compassionate care, Vogus has found.

Interacting compassionately among caregivers themselves—by providing forums of support when they have personal issues, lose a patient or need pastoral care—improves overall quality as well, he explains.

“It’s about thinking differently about how we do the work we do in ways that help us deliver higher quality care,” Vogus says. “It’s not costly. It’s just smart management.”

Vogus also has a stream of work, some with Bruce Cooil, the Dean Samuel B. and Evelyn R. Richmond Professor of Management, on “mindful organizing,” or how people best work together to detect and correct emerging errors and unexpected events. A continuous improvement mindset, he says, is linked to a higher performing team. And a higher performing team is more likely to retain higher quality employees, saving money in hiring, training and team integration.

His research, he explains, is all about “shifting the way people think about work and managing work. We want to drive things that grow revenue and reduce cost.”

Reducing inefficiencies improves quality of care

Research spearheaded by Ranga Ramanujam, associate professor of management, looks into the notion that reducing inefficiencies and waste is an important measure of quality that is not necessarily in conflict with the goal of improving patient outcomes.

“The key is to facilitate active, ongoing, real-time involvement of employees on the front lines detecting problems and using their skills to fix problems on the go,” he says.

“Health care is a very complex distributed system that cannot be controlled from the top down. It has to be managed in real time at the point of care. To do more with less, it is important to get your employees more engaged and empowered,” he says. “A lot of my work centers on employee voice and encouraging the voluntary expression of ideas.”

Several studies have looked at the conditions that encourage nurses to speak up. Ramanujam has found that much of it has to do with the behaviors and managerial qualities of the nurse manager.

The implementation of many efficiency-enhancing practices, he discovered, depends on effective coordination between and across various professional groups—nurses, physicians, pharmacists and other health care workers.

Ramanujam is currently examining hospitals that consistently deliver quality care even while keeping costs and inefficiencies low. He says the U.S. system can potentially learn from the experience of hospitals in other countries, such as the Aravind Eye System in India that performs high-quality cataract surgeries at a fraction of the cost in the West.

Lessons from other industries improve efficiencies

After years spent studying learning curves in organizations, particularly the airline industry, Michael A. Lapré, the E. Bronson Ingram Research Professor of Operations Management, turned his attention to health care.

Lapré’s recent research focus has been on improving efficiencies among surgical teams in operating rooms—the most expensive unit in a hospital—as an important potential cost-saving area for hospitals.

Specifically, he has looked into whether individual, team and organizational experience improved efficiencies. The research showed that when an experienced surgical team works together regularly and effectively, it is able to perform surgery faster when more cases were on the schedule.

IT can impact quality of care

Eric Johnson, the Ralph Owen Dean and Bruce D. Henderson Professor of Strategy, is newest among the active health care researchers at Owen. He is part of a recently announced multiuniversity National Science Foundation grant focused on trustworthy information systems for health and wellness.

The work springs from the large financial incentives provided by the Affordable Care Act for hospitals to adopt electronic medical records. The project’s multidisciplinary team has studied 3,500 hospitals making IT investment decisions and found that hospitals meeting the government’s requirements for the use of electronic medical data and related technology (reaching what is defined by the government as “stage one meaningful use”) do have measurably better results. Even so, those usually follow a predictably difficult first year of implementation, he says.

He says that while it’s difficult to alleviate all agendas or bias, Owen can function as a more impartial observer of the health care landscape.

“Since we’re not in the health care business, we’re able to have these conversations about these vexing issues that health care faces without having any perceived agenda or goals,” he says.