What Health Care Managers Need to Know--and How to Teach Them

Health care business managers are under tremendous pressure to become more innovative, more productive, more accountable. The question, asks Regina Herzlinger, is who is going to teach them these skills?
by Paul Guttry

Global health care is entering its most challenging era, with increasing demand for services from consumers newly arrived in the middle class, under-served people, and rapidly aging populations, all the while dealing with the need to manage advanced medical technology, transform core services to a digital platform, and the increased fiscal pressures created by the worldwide economic crisis.

Unfortunately, the educational programs for future health care leaders fail to provide many of the needed skills, according to a survey of CEOs of the world's most innovative health care firms conducted by Harvard Business School Professor Regina Herzlinger.

“This is not a field for mile-wide, inch-deep managers”

On October 4-5, Herzlinger, the Nancy R. McPherson Professor of Business Administration, hosted the international conference, "Twenty-first Century Health Care Management Education: Confronting Challenges for Innovation with a Modern Curriculum." The conference brought together 114 global faculty from schools of medicine, health care administration, public health, and business; leaders of the US professional societies; and HBS alums active in health care investing , leadership, entrepreneurship, and policy making.

"It was an exciting effort that joined health care administrators, policymakers, and academics in discussing how to strengthen management education in the health sector, with a special focus on innovation," according to Herzlinger.

Though a white paper based on their deliberations is being prepared, Herzlinger sums up the conference findings this way: "The teaching of health care administration needs to be more imbued with holistic, real-world issues and teaching approaches: more case-based teaching and efforts to help students focus on strategic insights and business models; an enhanced focus on organizational innovation and implementation; and increased field-based learning."

The Diagnosis

As source material for the conference, Herzlinger arranged for market research firm Scriplogix to interview selected top executives known for innovation in this sector or as major employers of graduates of professional education programs. The survey assessed their views of the future, the core skills and knowledge needed by future leaders, and their assessment of how well current academic programs in the health sector prepare students for these challenges. Scriplogix also polled conference attendees about their views of what the future held and the impediments, if any, to fashioning curricula which could help students best address this future.

Concurrently, Herzlinger and conference coordinator Casey Covarrubias analyzed the course content of 26 of the leading schools offering specialized programs in health care management and compared the curriculum to the recommendations from the field interviews by comparing the frequency of words in syllabi with the major themes proposed by the CEO's.

The results outlined the challenges ahead for academic programs in this field.

Although the academics and CEOs agreed that innovation was key, especially process innovation, the content analysis revealed significant differences in the words most frequently used by CEOs—innovation, leadership, management, and change—with those found most frequently in curricula descriptions—policy, system, and organization.

The terms often used in describing the business school curriculum—biomedical/biotechnology/diagnostic, entrepreneur, finance—differed from those in the public health business curricula—analysis, organization, policy.

And on the question about impediments to greater learning in this area, the academics generally cited shortage of faculty who understood health care and could teach business skills; lack of case materials and familiarity with case method teaching and field studies; and inadequate mechanisms for involvement of the local entrepreneurial health care community.

Specialized Skills Required

In a health care setting, learning to become a fungible manager with good business skills is really just the start.

"Sure, health care managers must be able to read financial statements; to understand how leaders get things done; she has to be very smart about competitive analysis and forging a strategy that considers realities and which way public policy is moving," Herzlinger says. "She must also understand capital markets, group dynamics, and different kinds of leadership."

But in health care, Herzlinger continues, managers must also have the confidence and skill to analyze the viability of innovations in terms of their technological, public policy, and structural impact and to have a sure sense of the mood of consumers who, all over the world, are deeply interested in health care. "This is not a field for mile-wide, inch-deep managers. Health care innovators must master not only managerial skills but also the complex forces affecting the sector."

One clear message emerging from the conference was the importance of change management. How are concepts underlying organizational innovation implemented and how are leaders developed with the capacity and courage to effect these changes?

Another message, according to Herzlinger, was about the role of payment models on cost, quality, and access to care and the need to ensure that "access" does not require "affluence." And , while most organizations claim they are focused on the patient, few actually engage them in meaningful ways to help with prevention and wellness, shared decision making, provider choice, expectation setting ,and compliance.

The problem is that practical skills such as cost accounting and organizational behavior are taught today often in narrow silos and slices, lacking a grounding in practice. "A more holistic approach would bring together disparate skill sets in a very practical way, thinking about strategies and how to actually effect change in health care," she says.

Another limitation Herzlinger sees is a focus within the curriculum on the needs of hospitals rather than a more holistic view of the sector. "We need [talented managers in] hospices and retail clinics and nursing homes and skilled nursing facilities and biotech, medical devices, and health IT. Further, this focus on individual institutions as sites of care can miss significant opportunities to address systems of care issues so critical to the treatment of patients with chronic conditions."

If curricula are a significant problem, they often reflect limitations in the ability of faculty to address the novel elements of the required knowledge and skills. Academic programs often provide few rewards for teaching faculty and those focusing on applied research. Where programs have specialized faculty slots available for the health sector, few recognize the disconnect between the research that is rewarded in academic tracks and the critical needs of the health care sector. Herzlinger hopes that the conference will springboard the recognition of teachers who create holistic curricula focused on strategy and innovation within the sector.

"That would not be a minor result; it's a huge academic achievement. From the perspective of the needs of these programs, the fact that someone hasn't published in a prestigious economic journal is just not that relevant. We must legitimize that concept among our peer institutions."

From its original conception, Herzlinger knew that the conference needed to be global in scope. "As GDP rises, the demand for health care increases. I was very concerned that students from developing nations would be taught to simply replicate the failures of the American and European systems." In addition, she does not believe that the developed world has all the answers. International case studies in her own popular HBS MBA courses on Innovating in Health Care have shown that necessity was not only the mother of invention, but innovation as well. "If you live in India and you can spend $50 per person per year on health care—as opposed to $8,000 for us—you think creatively about how to get it done."

Next Steps

Herzlinger is not naive about how easy it will be to enact the conferees' recommendations in the larger academic world. "Our point of view will not be credible unless this group acts to make it credible. It needs to be legitimized as a means to make health care better, more accessible, more uniform in quality, and more cost-controlled. This mission also requires resources. Development of faculty and curricular material such as case studies is very expensive."

The conference is envisioned as the first of a series. Future events will monitor the implementation of the recommendations in the white paper, with Professor Kevin Schulman of Duke University hosting the next event. "We also need to take it abroad to a not-very-big European country, China, South America, Africa; to make sure that this conference, in how it is held and managed, embodies the goals of the endeavor-to create the academic programs preparing the new leaders for this field."

Other HBS faculty presenting at the conference included Prof. Alan MacCormack, who discussed the School's new field study effort; Michael Chu, on case studies; and Srikant Datar, about his experience motivating people toward improving MBA programs. "People found that tremendously inspirational -- to have models of success in innovating curricula," Herzlinger says. Additionally, HBS professors Richard Hamermesh and Robert Higgins led a session on the role of venture capital in the curriculum, along with leading academics from Arizona State University, Case Western Reserve University, Duke University, Peking University, University of Alabama at Birmingham, University of North Carolina at Chapel Hill, University of Pennsylvania, Vanderbilt Law School and Virginia Commonwealth University, who led the remaining eight sessions.

The School's Division of Research and Faculty Development helped manage the conference.

Herzlinger has been a prolific case author in the field of health care innovations. These include:

About the Author

Paul Guttry is a freelance writer based in Jamaica Plain, Massachusetts.

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    • Hugh Quick
    • home, none
    Learning about health care is learning about health, not management. (I don't want it known that my view is more than relaxed contemplation. My daughter,who lived in California, recently died from a known complaint, from which she should not have died. Also, both my son and daughter-in-law are doctors.)
    • Ian Joseph
    • Professor, Westchester Community College
    A holistic approach is long overdue. In the new healthcare paradigm, managers must be analytical and caring. The "Widget" model of teaching healthcare management/economics will always be an impediment to effective and efficient delivery of service. This sector of the economy is important to every member of the society-not just a market segment.
    • Hugh Quick
    • home, none
    I know that I "bang on" about this and I have explained why. Successful health care must be a personal, human, relationship because, in essence, that is what 'health' is about. The adopted,teachable techniques which can be taught are about 'medicine' not 'management'.
    • Kapil Kumar Sopory
    • Company Secretary, SMEC(India) Private Limited
    Health care has not properly been taken as a business proposition eventhough the medical practitioners do earn a lot, much of which doesn't pass proper channels leading to generation of black money especially in India. It is a vicious circle in which it is rather difficult to pinpoint where alone the fault lies. The society attatches great value to 'M.B.B.S.' Admission to many colleges is possible on payment of huge capitation fees. Recovery starts as soon as the candidate qualifies and commences his practice. All methods are deployed to quickly earn as much as possible and business ethics are ignored.
    Faulty curriculum which does not include business management to desirable extent is also responsible for the young ones not to practise right practices including transparency.
    Even the control by regulatory authorities is lax.
    It is high time health care does not only teach health as such but the other connected needfuls too, and this in depth.
    • Bruce A Revis SR
    • Online Student, South University Savannah GA.
    Ms. Herzlinger has a clear understanding of what is needed in the field of Health Care Management studies. I have recently completed Long Term Care at my school, it was as if I were in a different educational setting. At the same time I was taking Human Resource Management and nothing was spoken of Healthcare or how this would be incorporated into the Health field. LTC was so enriching with all my Instructor taught, her teaching was so incredible because she focused on quality of care, managed care organizations, the loss of funds that are being cut out.
    She only concentrated on our little class with only the periles of LTC. I walked away with such a clear understanding of LTC and the consumer. I have to agree with her views of how the courses that are to support us in the Healthcare course have no vision of what the Healthcare field is about.
    I am now in Accounting III in one course and my other is Managerial Communications, it up to me to incorporate Healthcare into the course. Although my instructors are teaching their courses for everyone to learn at the level we are at, it not teaching the incorporation of healthcare in any of the courses.
    I have already figured out that it is up to me to combine all my academics into my major. It took me 55 years to finally get into healthcare, I want to be one that could would or should make a difference in the field. We are faced with the Baby Boomers, Disabled Veterans, the elderly, who depend on our system to take care of them because their quality of life has changed.
    Is it possible for anyone to understand the critical state our healthcare system is headed for? Why do hospitals and Nursing Homes, Assisted living facilities always give aggressive treatment when the patients are in their final stages of life?
    As stated is this system headed for those who are able to afford the quality care that all should be able to recieve. Without being educated in these areas history is sure to keep repeating its self.
    To make along story short, I find this article to be true in every aspect that it was intended. Thank You very much for such a eye opening experience. I have learned from this article that it pretty much up to me to go beyond what I am being taught to reach for more than what is taught.
    Excuse any miss spelled words or any other grammar mistakes, I had to comment on this article. Revis
    • Russ
    • Expert, Med-Surg
    " .. Successful health care must be a personal, human, relationship because, in essence, that is what 'health' is about .."

    Mencken wrote that all governments involve power-mad people who, if not carefully monitored, will take every penny you have.

    "Hoping" for great medicine is not a license to grab every penny available.

    Authentic leaders lead and manage across various needs. Politicians, they try to grab every penny you have.
    • molotsi monyamane
    • Consultant Physician, Ministry of Health Lesotho
    The dual burden of communicable and non communicable diseases has brought in new challenges of the need of capacitating Heathcare Workers with Management Skills. I would like to have access to Healthcare Management Training for my Staff and a mentoship programme. Molotsi Monyamane