The Business of Medicine
By Chris Blose
From reforms to rapid advances in technology, big changes are coming for health care. Those who understand how business and medicine intersect will be ready for a healthier future — and executive education will have a big role to play.
Stephen Ray Mitchell sat in his office and stared at sheet after sheet of data, hoping the answers he needed were hiding somewhere in the spreadsheet cells.
Mitchell (EMBA ’13), Georgetown’s School of Medicine’s dean for medical education, wanted to know which types of medical students faced the worst debt and needed the most help. He had a hunch, but he wanted to back it up.
A contractor had made a similar attempt at analyzing the data. But the recommendations were not clear, so Mitchell took a DIY approach. He sifted through the data, ran it through software analysis, found the answers he sought, and created a full report to share with his CFO and business officers.
Impressed, his colleagues asked, “Who did this?”
“I did,” Mitchell responded.
The real question was how? In his many years of medical practice and medical school education and administration, Mitchell had managed plenty of budgets. He had a strong grip on finance. But this was deeply analytical work, and he found himself applying freshly learned skills from his Executive MBA (EMBA) studies at Georgetown McDonough.
“I realized how empowering it was at that point,” Mitchell says. “Some of it is understanding the language base, but much of it is just understanding the right questions to ask.”
Understanding the right questions to ask is becoming increasingly important in the field of medicine. The Affordable Care Act — newly affirmed with the re-election of President Barack Obama — means organizations will have to pay more attention to efficiency and accountability. Databases are getting better, so organizations that know how to use them to their full potential will thrive. On top of that, the rapid speed of medical advances, from technology to treatments, means hospitals and pharmaceutical companies will have to keep up or lose their grip on the market.
With these facts in mind, Mitchell and others with long-term medical experience have turned to business. In fact, demand is strong enough that Georgetown McDonough’s Executive Education is developing a custom program on business and medicine.
After all, American medicine is, at its roots, a business. It serves customers whose needs go far beyond basic products and services and into the realm of life and death.
Cura Personalis Plus
Mitchell knows exactly how much smart business principles can improve the practice of medicine. He has witnessed an inspiring transformation since Georgetown University Hospital became a part of the larger MedStar Health system in 2000.
Mitchell says that without abandoning the core principles of Jesuit care — cura personalis, or care for the entire person — the hospital has improved efficiency and safety, drastically cut costs such as administrative overhead, and kept itself highly competitive.
“We are 12 years into this,” he says, “and we have a university hospital that is still a Catholic hospital, but now, instead of being $60 million in the red, it’s $50 million in the black.”
Now Mitchell is applying what he learned from observing the process — and what he is currently learning in the EMBA program — by serving on the board for another group of Jesuit medical centers merging with a large nonprofit medical system.
Perhaps the most important lesson he has learned: “It’s not as much about budget and finance as it is about thinking strategically.”
Because he is involved in medical education, he thinks not only from an administrative perspective but also with the people who staff a hospital in mind. His students, future doctors, want to know what kind of debt they will face. They want to know whether they will be able to afford to repay it. They want to know if reimbursement systems will change because of health care reform, and what any changes will mean for them. Perhaps most important in the current environment, they want to know where they will complete their required residency.
“If we look ahead to 2020 at the number of physicians — and this includes expanding nurse clinicians, nurse practitioners, physicians assistants, and others — we will be somewhere between 90,000 and 150,000 physicians short in this country,” Mitchell warns. Medical schools have expanded to try to tackle this shortage, but there are still only so many residency slots available at hospitals. By and large, those slots have not expanded.
“Where does residency training fit into health care reform?” Mitchell asks. On top of that, he says the shortage may hit primary care hardest because more and more graduating students will choose specialties with better salaries. “We send kids out with probably a little bit over a quarter of a million dollars in debt. They’re going to have a wonderful profession, but unless they enter a surgical subspecialty, they are going to have a tough time repaying that.”
Mitchell used his data-mining skills, newly honed by his studies, to examine that problem. Consider it one example of his willingness to try a new strategy, but it is hardly the only one. Mitchell also reached out to classmates for ideas on funding and marketing an outreach program in Argentina. He plans to do the same for ongoing programs in Africa.
“I learned from my business colleagues who knew lots of social media tricks that I didn’t know,” he says. “I was able to bring fundraising to the table, but I also was able to create a business plan for an outreach organization and sell their product. This business education has been transformative for me.”
If Mitchell is concerned about the debt his students will face as future doctors, Sunita Sah is concerned about the decisions they will have to make.
Within the American health care system, industry and practitioners are intricately intertwined. Companies that make drugs and devices sponsor clinical trials, medical conferences, and, in some cases, continuing education for doctors. Sah, assistant professor of business ethics at Georgetown McDonough, studies how this delicate dance plays out in doctors’ offices across the country.
For example, what drugs do doctors choose for treatment? Are their decisions influenced by subtle relationships with industry — a gift here, a speaking gig there, some research funding elsewhere? And do the doctors even recognize a conflict of interest?
“Medicine is never black and white,” Sah says. “There are many kinds of reasons to recommend a particular treatment or another, and humans can really rationalize whatever they wish to once they think that’s the best way to go.”
Her goal, then, is to make doctors more aware of when they are rationalizing their way into a conflict.
She has an advantage in analyzing a doctor’s mindset — she is one of them. She was a medical doctor in the United Kingdom, and then a pharmaceutical consultant, before pursuing an executive MBA at the London Business School and a Ph.D. in organizational behavior at Carnegie Mellon University. Now she studies organizational behavior and ethics, particularly as they apply to health care.
Her medical experience brings empathy for the doctors she studies. Everyone wants to believe they are acting with a patient’s best interests in mind, but there are unconscious psychological effects at work.
For example, in a 2010 paper in the Journal of the American Medical Association she examined why doctors accept influence from industry. Among many findings, Sah and her colleague discovered that when they worded research questionnaires in a way that reminded participants of all the sacrifices they made to become doctors — the lack of sleep, the mountain of debt, the years of commitment — they were more likely to state that conflicts of interest, including receiving gifts from industry, were acceptable.
Another paper looks at invulnerability, or the perception that doctors are immune to conflicts of interest.
“Doctors feel professional and objective,” Sah says. “There is an attitude: ‘Do you really think this small lunch or this pen is going to affect my prescribing behavior or what I would do for a patient?’ But our experiments have shown that the more you feel immune to the biasing effects of conflicts of interest, the more likely you are to accept them and put yourself in situations where you can be influenced.”
Sah’s work goes beyond simply examining the why, though. She wants to know if current approaches to eliminating conflicts are effective.
Take disclosure, for example. Sah’s recent paper, “The Burden of Disclosure,” in the Journal of Personality and Social Psychology addresses the issue, which will become more prevalent as the field increasingly emphasizes transparency.
“Disclosure has become the gold standard for dealing with conflicts of interest,” Sah says. But is it enough? Sah says transparency can have positive effects, but thinking of it as a cure-all is a mistake.
Sah offers a scenario where disclosure can backfire: A doctor gives a patient two options, the standard treatment or a new treatment offered in a clinical trial. The doctor then tells the patient he will receive compensation if the patient chooses the clinical trial. The doctor has met disclosure requirements, but where does that leave the patient?
“Imagine yourself in the doctor’s office right then and there,” Sah says. “You might think, this advice is not as clean as I thought — and you probably don’t want to think that about your doctor. But at the same time, now you don’t want to reject the advice because you don’t want to indicate to your doctor that you don’t trust them. Basically, instead of a warning, the disclosure now makes you more uncomfortable about turning down the doctor’s recommendation and increases the pressure to comply.”
If Sah’s research can make a difference, she says, it is in getting people to think long and hard about why these scenarios occur in the first place. For example, are there ways to design clinical trials that allow industry participation without creating conflicts of interest? Are there ways to fund continuing education and medical conferences without turning to industry sponsors?
“I think people need to be spending a lot more energy on the first aspect of what I study: Why is the conflict of interest there in the first place, and why can’t we eliminate it?” Sah says.
The Doctor Will See You — by Video
A stroke patient arrives in an emergency room in a small hospital. The situation is critical, and the patient requires immediate care. But the hospital has no stroke specialist.
Within minutes, the hospital’s doctors are on the phone with a specialist hundreds of miles away. Minutes later, that doctor appears on a video screen in the patient’s room. The doctor directs the life-saving administration of the drug tPA, a “clot buster” that is highly effective in treating strokes — but only if administered very quickly. Moments later, the situation is under control.
This scene plays out in more than 175 hospitals across the country thanks to Specialists On Call (SOC), a telemedicine company.
“For hospitals that have difficulty obtaining full-time coverage by a specialist, we bring those specialists in by video and audio,” says Karen Deli (EML ’12), SOC’s executive vice president of operations. SOC supplies the equipment and technical support, a central call center, and a stable of specialists in neurology, psychiatry, and increasingly in other fields as well.
Telemedicine has been around for years, but SOC’s business model is a new take on the practice — one that yielded $10 million in revenue in 2011. In the past, many telemedicine companies, especially those serving rural areas, were funded by grants. The trouble, says Deli, is that grants run out.
Deli got the chance to analyze exactly why SOC works where other telemedicine companies flounder while getting her Executive Master’s in Leadership (EML) at Georgetown McDonough. Having worked as a volunteer paramedic for the past 25 years — a job she has never given up, even while working full time and going to school — her medical experience makes her credible.
“Coming into Specialists On Call, my volunteer experience absolutely propelled me in terms of credibility with doctors. I could sell our services in emergency departments by speaking the right language.”
She chose business school because she wanted to be able to speak the language of business equally well. An EML research paper on SOC’s model and leadership was the culmination of that effort.
“We have a model that is financially and clinically stable,” Deli says, “which is what other telemedicine approaches have been lacking. But the most important thing is that we’re never asked to sacrifice quality. The clinical decisions came first, then we found the business ways to support it.”
For example, in the past, many hospitals had problems with telemedicine because on-site doctors and nurses needed training to make it work. Setting up telemedicine equipment presented technical difficulties and often proved more trouble than it was worth. SOC’s solution: Supply on-site technicians to work the equipment and build a call center for triage and support. As a result, SOC is typically ready to go within 15 minutes of a call.
Other strategic decisions abound. Some hospitals have trouble justifying payment on a case-by-case basis, so SOC offers a fee for unlimited service. Hospitals are required to provide certain types of paperwork in the case of strokes, so SOC packages that paperwork for them after the consultation. State-by-state licensing can create problems, too, so SOC pays to have its specialists licensed in several states at a time — meaning they can keep fewer on call while still serving a wide territory.
Deli takes particular pride in a case that brought her two worlds together. One of SOC’s clients was having problems identifying strokes quickly enough for treatment to be effective, so she worked with them to train their EMS (paramedics) team to make the call to SOC earlier — often before they arrived at the hospital.
“Last year, that hospital system won an award because they had some of the top times in the country,” Deli says with pride.
Deli has since left her full-time position with SOC to consult on similar projects — especially telemedicine for remote places such as the maritime and mining industries. Based on her experience, she believes in telemedicine’s role in the future of health care.
“In the health care space, there’s an emphasis on quality and patient satisfaction,” she says. “We provide data that demonstrates how telemedicine can boost both.”
Marketing Against Stigma
Unlike others featured in this story, Priya Madan Brooke (MSFS ’99) has not practiced medicine. But she still knows the satisfaction of helping sick people recover.
Brooke is director of marketing at Otsuka America Pharmaceutical Inc., where she leads the commercialization of drugs that treat depression, bipolar disorder, schizophrenia, and other mental disorders. For an example of these drugs’ impact, she looks no further than her own staff.
“I have someone on my team whose daughter has schizophrenia,” says Brooke, as she relates a story about the woman’s success with medication. “The joy in her eyes when her daughter got to move up from bagging groceries to being a cashier — that was huge.” The woman bought an apartment for her daughter, and for the first time, at age 22, she lives on her own. “There are different definitions of recovery, and this is one of them.”
Brooke takes great pride in such examples, which attracted her to the pharmaceutical field in the first place. During her studies at Georgetown in the late 1990s, she took classes at Georgetown McDonough. Through the school she found a summer consulting job with a pharmaceutical company and has been in the industry ever since. She leads marketing and branding initiatives and navigates the often-tricky regulatory environment associated with drug sales and marketing.
Brooke appreciates the rewards — and relishes the challenges.
“As pharmaceutical marketers, we are not just making prescribers and consumers aware of treatment options but also supporing efforts to reduce the stigma of mental health disorders,” she says.
Otsuka and other pharmaceutical companies often use “unbranded communication” to offer information to patients and their caregivers. The goal is not to sell the brand, but to get people to start thinking about treatment options and start talking with their doctors. That can be a big step for a population that tends to be fatalistic.
Sometimes visibility alone makes a difference. Such was the case for Otsuka’s antipsychotic drug Abilify, which Brooke says was the first such drug to be featured in TV ads.
“We took the bold step of advertising an antipsychotic drug on national TV in ads,” she says. “We asked our physicians and consumers [what they thought of the TV ads], and they said that being on national TV really helped reduce some of the stigma associated with bipolar disorder.”
Brooke’s next challenge is marketing a new injectable form of Abilify in the coming year. For a marketing refresher and some inspiration, she turned to Georgetown McDonough’s three-day Brand Advantage Executive Certificate Course in May.
“Sometimes you have to just get away from your industry, hear from peers in different industries, and learn from your professors. Sometimes we get away from the fundamentals of marketing, and this course helped me get back to that core.”
For example, Brooke sees great promise in the ethnography that Procter & Gamble uses for its consumer products. Her marketing team uses patient-doctor dialogues — with identifications removed for privacy, of course — to inform how they market their medications and to whom. In addition, she is accessing predictive analytical tools similar to the ones the New York Police Department uses to predict crimes.
“It is really about making strategic choices, knowing who are your customer targets, who are your key influencers, and making sure that you are delivering a message that is targeted to your prioritized segment who can really grow the market or influence the market,” Brooke says. “It doesn’t matter what the industry is, it still applies.”
To Brooke personally, though, the industry does matter — just as it does for Mitchell, Sah, and Deli. Their jobs differ drastically, but they all chose the health care field for a reason.
“I would not be as fascinated with selling or marketing soap,” Brooke says. “What really attracted me to this field is being involved in something that changes people’s lives.”
Click here to access the Winter 2013 Georgetown Business magazine