Earning an MBA in Healthcare Management
The healthcare sector is on everyone’s mind these days. Struggling out through the other side of the COVID-19 pandemic, the headlines are all about vaccine distribution, revenue shortfalls, provider shortages, and supply problems that continue to dog the industry. Anyone that lived through the pandemic will remember hospitals being pushed to capacity, having to turn away ambulances in some places and being unable to accept new patients in others.
And at the very same time as some systems were overwhelmed and working their limited staff overtime, thousands of healthcare workers in non-critical departments were laid off as the regular business of delivering care ground to a halt.
The fact that healthcare is a business is sometimes lost in the fog of press coverage. And at a time when bread and butter elective procedures are on hold and ICUs are at capacity treating COVID patients, the industry is very much in need of leaders with a keen sense of that fact to ensure hospitals are able to weather the storm and remain solvent.
The ranks of hospital and healthcare management need more than medical knowledge – they need a high level of skill in organizational management, business economics, and maybe most importantly, communication.
Fortunately, the American business community has been relying on an elite pool of people with exactly those skills for decades: MBA graduates. With a concentration in healthcare management, MBAs are equipped to hit the ground running and handle anything that comes their way, even in these uncertain times when things are anything but predictable.
The effects of the pandemic will be long-lasting. Early studies showed almost 30 percent of healthcare workers in affected hospitals developed clinical or subclinical symptoms of post-traumatic stress disorder, an affliction that will follow them for the rest of their careers. And it comes at a time when the American medical industry simply can’t afford to lose any providers… even pre-pandemic, the industry was desperately short of primary care providers, facing a projected shortfall of 52,000 by 2025.
It all adds up to a lot of challenges for healthcare managers to have to deal with, but with an MBA as back-up, they’re more than ready for the fight.
An MBA Could Be the Best Option for a Career in Healthcare Administration
You probably associate MBA degrees with Gordon Gecko and Wall Street-style hostile takeovers and boardroom showdowns. Healthcare itself is a big business where all those things are in play, so that’s not too far off. In fact, by some measures, it’s the largest single business sector in the country: The Centers for Medicare & Medicaid Services reporting that it accounted for almost 18 percent of the entire national gross domestic product (GDP) in 2018, and expenditures in the industry are expected to hit $6.2 trillion by 2028 with a more than 5 percent annualized growth rate.
With all that money sloshing around and projections for demand on service and growth breaking every chart those numbers are plugged into, there’s going to be a lot of hiring taking place in the years ahead. Global consultancy Deloitte forecasts that the industry is on track to create 4 million jobs by 2026, adding to the nearly 17 million people already employed in the industry according to Kaiser Family Foundation numbers from 2018.
When you have that much money and that many people in the mix, you need talented managers to keep the train on the tracks. Healthcare is big business, with more human and financial capital than any other single sector, and business is exactly what MBAs are bred for.
Why Get an MBA with a Healthcare Management Concentration Instead of a Master in Healthcare Administration?
The difference between an MHA and an MBA is one of emphasis; you can expect those business considerations to go front and center in an MBA curriculum, with health delivery and policies coming second. With an MHA, it’s the other way around, with healthcare considerations placed first and general business coursework moving to the sides.
There may be pluses and minuses to going with either option depending on your intended career path, but either one gets it done when it’s time to be considered for the top ranks of healthcare management in any major medical company, insurer, or healthcare system.
And it’s not like an MBA or MHA are your only two options, even if they are the most popular. Many universities offer dual degree programs, which give you both major subjects full-bore. You can find plans for everything from dual MSN/MBA for nurse leaders to MPH/MBA programs for executives in public health roles, to a dual MHA/MBA, which doesn’t take away from either specialization but instead demands that you fully master both.
Core MBA Curriculum Addresses the Lifeblood of Any Business; a Healthcare Management Focus Tailors It to Health Services Delivery
The MBA with a focus in healthcare management puts core business elements front and center, but against a backdrop of all the social, human and political factors inextricably tied to patient care.
That health administration concentration buys you some additional classes and electives that give you the sort of specialized introduction to healthcare management and services that you’ll need in the field. In some cases, these are variations on the core themes of the MBA, but with a healthcare lean to them:
In other cases, they are unique areas of study that are only applicable in the healthcare environment:
Electives may be available in healthcare-specific areas such as biotech or more general business considerations like entrepreneurship.
Finally, some MBAs offer an array of sub-concentrations, in areas like:
MBA Core Curriculum
As the premier degree available in the American business world, an MBA loads you up with all the knowledge and skills required to take on a leadership role in any kind of big enterprise. And in healthcare, like any other business, those domains always include…
Accounting and Finance – If you don’t get the numbers, you don’t get the business. Economic matters are a key concern in an industry that, according to the AHA (American Hospital Association), continues to face unprecedented financial pressures. Understanding how to account for every last dime, how financial markets work, and how the overall economy functions is a critical part of business success.
Marketing – Healthcare is a vital service but that doesn’t mean there isn’t competition. Executives have to understand how to reach and appeal to potential clients, whether they are operating an outpatient surgery center or running a major division at an insurance company. Traditional education in advertising and marketing strategy is all a core part of MBA degrees.
Business Strategy and Management – The meat of business management really comes down to devising a vision and plan to build success, and then executing it through effective communication and decisive leadership. This is exactly what successful MBA programs are built around, and you will see plenty of case studies covering everything from solving sudden procurement challenges for drug shortages in the field to restructuring to deal with revenue shortfalls.
Law and Ethics – Regulatory compliance is a constant challenge in the healthcare industry, so it’s good that MBA programs already have plenty of legal and ethics training built into them. You can expect to study thorny challenges around the type of problems that come up when PPE shortages exacerbate risks to your staff and conflict with the duty of care that providers have. You’ll also spend time learning about developments in healthcare law such as challenges to the Affordable Care Act (ACA) and both state and federal regulatory processes.
Business Operations and Technology – Technology is as important a part of the healthcare industry as every other modern business. MBAs routinely study the latest developments in automation, processing, and efficient business operation to keep their organizations ticking smoothly. Classes in data processing, information technology, and digital strategies are part and parcel of modern MBA degrees.
Master’s Thesis or Capstone Project
A thesis paper has long been the traditional goalpost for master’s degree programs, a research-intensive report that will develop and write over the course of your studies, and defend at the end of your program. It’s an independent project, but a professor will be assigned to you and serve as an advisor that you can consult with and bounce questions off of. Defending the paper simply means that you’ll submit it to the full scrutiny of a panel of professors who serve as examiners, poking holes in any of the weak points they find and sending it back to you to patch up. This is a back and forth process that could involve several revisions, but in the end you’ll produce a final document that shows your depth of thought and acumen in a particular area of business. And if it’s good enough, it could be published and end up as part of the MBA cannon of original thought available at the university’s library for anybody to access.
But many practical MBA degrees today offer the thesis as only one option, or set it aside entirely in favor of a capstone project. A capstone also involves intensive research into a relevant healthcare business issue of your choosing, where you are expected to offer original insights and demonstrate the full range of capabilities that you have gained over the course of the program. The project is usually focused more on practical applications of the idea you’re presenting more than a purely academic endeavor like a thesis. In some cases, capstone projects are a team effort that you’ll work on in collaboration with classmates and in consultation with a professor. It’s very common to present a capstone to a panel of professors, and you won’t be limited to simply reading your paper out loud. Instead, it could involve a video or multimedia presentation. The key thing that makes a capstone a lot less stressful than a thesis is the fact that nobody is going to be putting it through the wringer to make you defend it.
Being able to synthesize the knowledge you develop in the course of your program through either a capstone or thesis is considered one of the primary ways to showcase your value and frequently serves as a foundation for your CV and future job interviews.
Application Requirements to Clear for MBA Admissions
MBA programs are among the most in-demand of all advanced college degrees. According to GMAC, the Graduate Management Admission Council, 60 percent of prospective graduate students are looking to enroll in an MBA program.
This makes applying to those programs a very competitive process, particularly for a sought-after specialization like healthcare management. For the best, fewer than 10 percent of applicants can expect to get in.
You’ll need to impress admissions committees in three key areas to up your odds of acceptance:
Test Scores – A high score on the GMAT (Graduate Management Admissions Test) or GRE (Graduate Record Exam) is a must. Not all schools require this and not all accept both tests—check your preferred programs for details. But some comparative demonstration of your basic logic, reasoning, math, and writing skills is mandatory.
Academic Career – Your bachelor’s degree doesn’t need to be in a related field in most cases, but your undergraduate GPA (Grade Point Average) will be a primary consideration for any admission’s committee.
Motivation – Every MBA program is conscious of the fact that it will be weighed by the quality of its graduates. Admissions officers want the cream of the crop to start with. They will want to see evidence that you are sufficiently dedicated, motivated, and that you have the experience for that motivation to matter. That means proof of professional accomplishments, attestations from former employers, and often a kick-ass interview or essay submission to show them you mean business.
Accreditation Considerations for MBA Degrees
A general accreditation is all but a given for any American university that you have ever heard of. Seven major regional accrediting organizations, backed by the full faith of the Department of Education, evaluate the basic academic and administrative standards of such schools to validate their worth as educators who meet the needs of the American business and cultural community.
But when you dive into such highly specialized subjects as accounting, healthcare, and business practices, there is a higher standard to meet. You can find schools that clear that bar by ensuring that they hold an accreditation from one of the three specialty accreditors that deal with business and accounting processes:
Each maintains close ties to the business community and assess business schools and MBA programs to ensure they are completely up to speed with modern business practices as are reflected in their curriculum, choice of instructors, and resources offered to students.
That covers the quality of their business training, but you’re also interested in how their healthcare education stacks up. That brings yet another specialty accreditor into the conversation, the Commission on Accreditation of Healthcare Management Education (CAHME). They perform the same type of evaluation, but with healthcare management topics in mind.
Although CAHME is primarily concerned with accrediting MHA degrees, they do also offer accreditation to MBA degrees with healthcare concentrations. A handful of elite programs meet all those standards, and it’s worth your time to check those programs first as the highest and best business and healthcare management education available in the nation.
What Does an MBA in Healthcare Management Cost?
Getting the kind of education that will land you in the executive offices at a major healthcare system does not come cheap. With fierce competition to get into degree programs at prestigious schools, colleges don’t have to offer a lot of discounts to fill their MBA programs. According to U.S. News & World Report, the average cost of the top 10 business schools for an MBA in 2020 was over $140,000.
But not everyone is going to go to Stanford or Wharton. The list of CAHME-accredited MBA programs reveals annual tuition rates of between $21,820 and $113,630 per year. For a typical two-year program, that means you can find fully-accredited options for around $40,000… not cheap, but well-worth the price considering the salaries you can command with those degrees.
Should You Go With an Online MBA in Healthcare Management?
It wasn’t the pandemic that started the trend toward primarily online master’s degree programs, but it definitely accelerated it!
An MBA is a degree that is often sought out by working professionals, which means there’s a whole crop of students out there who see traditional campus experience as basically a big inconvenience. Holding down a day job is tough enough when you’re saddled with all the other responsibilities that come with life, so relocating to be close to an acclaimed business school is out of the question for many MBA candidates.
While many degrees cater to this crowd through evening or weekend classes, it’s even more convenient to take asynchronous online courses. Available anywhere you can find an internet connection, delivered at any time of the day or night, it’s the ultimate convenience factor for students with busy lives and other commitments.
Some programs are available entirely online while others are served up in a hybrid format, combining online classes with traditional on-campus coursework. In many cases, that is compressed into a week or weekend event once per year or per semester, making it relatively easy to take those programs even for out-of-state students. And the lack of a requirement for physical facilities can sometimes make online programs somewhat less expensive than their on-campus counterparts.
From a purely practical standpoint, an online degree program could be your best bet, whether it’s your first choice or not.
What Can I Do with an MBA in Healthcare Management: Job Prospects for Graduates
Holding an MBA with a concentration in healthcare management opens up all the top jobs in any major health services organization. That doesn’t just mean hospitals and clinics, either; insurance companies, medical device and supply manufacturers, government regulatory agencies and non-profit policy shops are all on the menu with the unique blend of business acumen and medical knowledge you’ll have in your portfolio.
Some of those positions that are tracked by the Bureau of Labor Statistics, with their 2019 salary and growth projections, include:
These positions plan, direct, and coordinate daily business activities at healthcare providers or associated businesses. Business professionals are needed to manage departments ranging from housekeeping to surgical centers, handling budgeting, supply procurement, staffing, scheduling, and all the major and minor daily activities that keep the doors open and lights on for patient services.
Executive leadership in healthcare means the C-suite; chief executive officer, chief information officer, chief operating officer, chief financial officer, and beyond. There are relatively few of these positions, but they hold all the real power and responsibility in healthcare organizations. Long-term strategies, guidance, and leadership are their core role, and they are well-paid for those capabilities.
With staffing difficulties becoming critical across the healthcare spectrum, human resources have become a key factor in the success or failure of modern medical establishments. Hiring, retention, screening, and benefits oversight all demand top talent in order to attract top talent. MBAs, with their intensive education in HR principles and financial analysis, are a natural fit for these jobs.
Big Salaries Await MBAs in the Healthcare Industry
It’s a big surprise to many people that careers in hospital administration often outstrip even prestigious clinical positions when it comes to earning a big paycheck in the healthcare sector. In some cases, administrators can out-earn surgeons by more than 50 percent.
Management positions are unique in any industry, however, in that the work they do can depend less on the title of the position than the size of the organization. A CFO working at an inner-city non-profit clinic has vastly different responsibilities and daily tasks than one managing a multi-hospital regional HMO.
That means widely varying salaries between such positions. According to a survey by Total Compensation Solutions as published in their 2019 Hospital Executive Compensation Report, and survey results from Crain’s Modern Healthcare from the same year, senior executives working at companies in different revenue categories could expect significantly different median base salary levels:
Similar discrepancies occur between stand-alone hospitals and system-owned hospitals; CEOs at standalone hospitals with revenues of less than $300 million brought in total compensation packages worth $524,300, while those operating as part of a larger system only earned $310,000.
Of course, not all MBAs end up in the C-suite; other hospital positions that you might land include:
Compensation can also track with local trends and various regional factors like demand and cost-of-living. The TCS report shows the following median salaries for top financial executives for different cities around the country:
High level managers frequently find a lot of their compensation coming in the form of benefits and incentive plans. For example, while the base salary reported for financial execs at small organizations only comes to $183,900, additional bonuses and benefit factors brings the actual total compensation up to nearly $210,000 annually. The total value add from those factors for senior executives at larger organizations can range from $300,000 to millions in stock options or other awards.
Overall, according to the MHE survey, those numbers are all up by 6.5 percent over just the one-year period from 2018 to 2019… a trend in the right direction that you are likely to enjoy as you enter the market with your MBA in hand.
Resources For Current and Future MBA Healthcare Administrators
Earning an MBA is a prestigious individual accomplishment, but no one gets their entirely on their own. In fact, an important part of most MBA programs is the networking… meeting and building relationships with people who will be valuable resources and partners as you climb the corporate ladder in the healthcare industry.
A lot of that networking and assistance happens through various professional organizations. It’s worth investigating these resources and becoming involved long before you get to the point of enrolling in an MBA program, and certainly worth consulting them as you evaluate which programs might be right for you. Whatever you read on the internet, your ultimate selection should be shaped by the real-world advice and expertise of people who have been through the process before and who work in the field you are entering today.
HEALTH ADMINISTRATION SCHOOLS
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