"An Opportunity to Heal the Healthcare Industry" - Commentary by Howard Forman and Stanley Garstka

"An Opportunity to Heal the Healthcare Industry "
By Howard Forman and Stanley Garstka
Published May 17, 2010 in the Financial Times 
Read the article in its original context on the Financial Times website.

When Barack Obama signed Healthcare Reform into law, the US asserted an individual's right to health insurance (and presumably healthcare), ensuring that nearly everyone has a federally defined basic healthcare insurance product.

While many applauded, the real work is just beginning and the success of this legislation depends on the co-operation and co-ordination of all sectors of the economy and on leaders and managers emerging in the public, private and not-for-profit sector to tackle the problem. Enlightened leadership and management can prevent this legislation from becoming a gratuitous gesture that burdens future generations with higher taxes.

While graduate management education has permeated the upper tiers of most industries, there are relatively few MBAs in the healthcare sector. Although physicians and scientists receive substantial training, which emphasizes specialization and expertise, they rarely receive leadership and management training. Cross-talk between the different players — except in the delivery of patient care — is rare. And MBAs do not often take roles in federal and state government (compared with finance and consulting).

Management is as much a learned body of theories, concepts and tools as medicine, the sciences and engineering. The current state of disarray in the healthcare industry presents an opportunity (if not an obligation) for business schools to address these issues. It also offers them the opportunity to educate leaders not just for personal gain, but for the good of society.

The new law is a concatenation of health insurance reforms and legislative changes aimed at making federal and state entitlement programs more effective and efficient in healthcare delivery. The shift in incentives for primary care and the dramatic increase in the federal government's footprint and authority over healthcare delivery will bring important opportunities for those individuals and business schools willing to meet the challenge.

These opportunities include developing consumer-friendly insurance exchanges that will improve the competitive dynamic in the currently abysmal individual and small group health insurance market; and establishing care delivery systems to improve access and efficiency. Developing management skills in physicians and healthcare knowledge in MBAs will further enable change.

There are several areas where business schools can take a leadership role in catalyzing the hoped-for transformation: for example, there are few more hospitable environments for leaders of the various healthcare industries to engage than the business school classroom.

And, rather than creating managerial and leadership training targeted at physicians, hospital executives, life sciences and health plans, business schools might offer a "breeding" ground for ideas about the entire system, from care delivery to prioritization of critical skills to development of the incentives necessary for future models of delivery and reimbursement.

Business schools must help us to see the multiple stakeholder perspectives necessary to frame and solve the current healthcare system problem. And there are few more appropriate areas for research than the current and evolving healthcare delivery system in the US. Although business schools have contributed to the application of management science to healthcare, the need for analysis and evaluation of the system is enormous, not to mention the required participation of health-knowledgeable managers in the implementation process.

Business schools can assert their leadership advantage in helping the US achieve a pre-eminent position in healthcare, leading rather than following other developed nations. It is time for business schools to step up. 

Howard Forman and Stanley Garstka are co-directors of the MBA for Executives: Leadership in Healthcare Program at the Yale School of Management.