Graduation day is a moment of elation. For those who have been through medical school era, this includes skat work, rotations, corpse labs, foreign scents, short white coats, and officer exams. The students may have finished the medical school part, but they still face the problem of loans. Medical school is an expensive investment, and the average medical student is forced to take out a $200,000 to $250,000 business loan. It’s called a “student loan,” but let’s be honest, they just invested $250,000 in a business in the medical field that they barely knew.
While these students understand the medical practice, they may not fully understand who controls the industry’s business and finances. They may not comprehend dollar flows and financial incentives, which are crucial in the healthcare ecosystem. Some participants in the medical field even say that they would never go back to it or encourage their children to pursue it. Therefore, medical schools and residents must prioritize teaching the business of healthcare so that students understand how the financial incentives and flow of funds work within the healthcare system.
As part of a curriculum, students should learn on the intersectionality of pharmaceutical companies, device manufacturers, payers, regulators, patients, hospitals, and healthcare providers. Students should also appreciate the value of capital, investment, and innovation. Topics to be discussed would include mergers and acquisitions, reducing healthcare costs while improving quality and access to healthcare, and healthcare opportunities in terms of scaling the latter two factors while reducing costs.
Doctors and healthcare professionals drive up healthcare costs without fully understanding why it happens. They may not realize how the healthcare system is funded or how it is related to burnout. If system reimbursement decreases, physicians face increased patient and documentation burdens, which may lead to burnout.
It is crucial for healthcare providers, such as doctors, to understand the healthcare policies and healthcare corporatization basics. While medical students do not need a full MBA program in their curriculum, they require an overview of the healthcare ecosystem. Physicians need to know how patient interactions are billed, payer reimbursement trends, and how negotiations affect activities within hospitals and clinics. And they must sit at the boardroom table and the children’s table for the sake of patient health, systems, and the future of health.
N. Adam Brown, MD, MBA, is a practicing emergency physician, founder of ABIG Health, and a professor of practice at his Kenan Flagler School of Business at the University of North Carolina. He believes that physicians must understand the business of healthcare to defend themselves and their patients effectively.