Don't get steamrolled by the managed care engine; beef-up on business skills
Do you need an MBA? There are alternatives
In the current home care market, hospital-based agency administrators must know how to accomplish financial and strategic tasks such as lowering costs, or they'll lose managed care business and get steamrolled by their competition in the process.
In the past, hospital-based home care company administrators have been able to get by with just their clinical knowledge because their hospitals handled all of their budgeting and other business decisions. Those days are gone.
A popular way for home care administrators to learn business skills has been the master's degree in business administration (MBA). Earning this degree is both time-consuming and expensive. It takes about two years and usually costs at least $10,000, depending on the program. (See resource list, p. 87.)
MBAs have tangible benefits
Hospital-based home care directors who have gotten their MBAs say there are no drawbacks to having the degree, other than the stress of actually doing it. Here are some of the benefits of getting an MBA:
* You develop a more organized approach to the business of home care.
Having an MBA changes your approach to tasks as a home care agency administrator, including planning, budgeting, marketing, control functions, and evaluating your market and your outcomes, says Elissa A. Hamilton, BSN, MBA, the regional director of patient care at Nations Healthcare in San Diego. The problem-solving approach is much the same as in nursing, she says, but you need to know how to use statistical concepts and financial formulas to handle those issues.
"So many home health agency administrators are just taking shots in the dark on these types of things. This is dangerous because if you can't evaluate the health of your agency, you might find yourself out of business very soon," she says.
Hamilton decided to get an MBA after the company she worked for went through a merger, and she opted to take a buy-out package. She did a part-time MBA in 212 years.
"An MBA gives you knowledge in business concepts that you simply can't pick up in a clinical program. Also, it will help you with your personal finances, with deciding how to plan your retirement and investments, or if you decide to buy a business at some point," Hamilton says.
Analytical skills improve
An MBA can improve your ability to analyze your company's business practices and make you more comfortable with your leadership role, says Cindi Slack, RN, BSN, MBA, CHE, the administrative director of Sioux Valley Hospital Home Health and Hospice in Sioux Falls, SD. Slack did a part-time executive MBA over two years, while working in her current position.
"After an MBA, you can talk the fiscal improvement language. You can look at the fiscal information you have to deal with now in hospital-based home care and analyze the validity of it. I just have a more organized framework for doing this job now," Slack says.
At the time Slack was getting her MBA, in the late 1980s and 1990, managed care was just penetrating the Minnesota health care market. She was able to get a jump on understanding how managed care works because her course work gave her the skills to analyze statistics and work with outcomes data.
"Before I even had to deal with managed care, I learned what data you need to generate outcomes statistics, how to know whether the data are valid, how to present the data to your staff, and how to talk to payer sources in the language they want to hear," Slack says.
* You increase your marketability as a manager.
Getting an MBA was a "great door opener" when looking for a new job, Hamilton says. Even though she credits her daily experience of working in home care with giving her management skills, she says the actual degree made her more marketable.
"I realized that even though I have years of home care experience, both hospital-based and freestanding, to compete for the types of management positions I wanted, I needed the credential," Hamilton says.
* You benefit from working with people from other industries.
Hamilton was the only health care professional in her MBA program, which allowed her to see different thought processes that people in other industries have, she says. She did many of her group class assignments on health care issues, and having diverse industry experience in her student groups was helpful, she says.
"[The other students] approached health care from the point of view of consumers and businesses, whereas I came at it from a home care perspective. Working with them helped me see the concerns of health care's customers better," Hamilton says.
Slack also says the diversity of the students in her MBA program enriched her experience.
"It definitely enhanced my appreciation of the business community's fiscal constraints and how much of their budget goes to health care," Slack says.
* You learn the basics of how to use computer programs, such as spreadsheets.
Almost every MBA project requires some amount of computerized statistical analysis using programs such as Microsoft Excel, Hamilton says. This kind of skill is critical in hospital-based home care because you can crunch your own numbers instead of relying on your hospital's budgeting department, she says.
* There are only benefits to having an MBA.
There are no drawbacks to having the actual MBA and the knowledge that comes with it, but the impact on your personal life is huge, Slack says.
"It was hard. I had five kids at home at the time, but their attitude was interesting to see. They were almost already used to it, like, 'Mom's always at school,' " Slack says. Slack has several other degrees in addition to her MBA.
Choose an MBA program carefully
If you decide to pursue an MBA, here is some advice for choosing the right program:
* Choose an MBA that fits your needs and personality.
You should select an MBA program the same way you choose any other degree program -- by shopping around to see what is available, what you want, what you can afford, and where you feel comfortable. Here are some steps to take when you research business schools:
-- Get to know the school.
Call or meet professors, students, and alumni from the MBA programs you are considering, Hamilton advises. If you like them, respect them, and feel comfortable talking with them, this program will likely be a good fit for you, she says.
-- Look for high-quality staff and students.
Professors who have current industry experience will impart better, more useful knowledge to you than professors who have mostly book knowledge, or who haven't had any recent industry experience. The same is true of students. The more experience they have, the more you'll learn from them, Hamilton says.
-- Ask what type of accreditation the school has.
Only attend an MBA program that is accredited, advises Walden. While you don't have to go to one of the top 10 business schools to earn a quality MBA, your degree will be more respectable if it is from an accredited school, she says.
-- Figure out class schedules.
If you can afford to take the time and spend the money to go to school full time, you needn't worry about this. But if you do need to work while in school, you need a class schedule that can accommodate your work requirements.
Choose a schedule that fits your needs
Slack's program was set up so that classes only met once a month, which allowed her to work almost normally. But this meant that classes were absolutely mandatory.
"If you missed even part of one class, you were in major trouble," Slack says.
This schedule worked for her, but it's not for everyone. Committing to a rigid schedule would have been impossible for Hamilton, whose part-time work schedule varied greatly. Also, she knew she couldn't attend classes on Fridays, as hospitals often discharge more patients just before the weekend, making for a busy last day of the week for home care. So, Hamilton chose a part-time program that offered night courses. At the same time, she worked three and sometimes four days a week as an assistant director at a hospital-based home care agency.
"It was very intense. I didn't do anything else but work, go to school, and study," Hamilton says.
* Consider an executive MBA program.
Some of these programs are just as good as regular MBA degrees, while others are a scaled-down, less rigorous program, Hospital Home Health's sources found. You should compare the coursework to a full-time MBA to see what the difference is.
Also, their classes meet mostly all day Fridays and Saturdays, which can be a problem for some people.
Slack's program was an executive MBA that had a densely packed syllabus of reading and written assignments to be completed on students' own time.
This type of program requires great discipline, and you have to be able to pace your work, Slack says. The only problem she had with the program was making the 412-hour drive from her home in Sioux Falls, SD, to the school in St. Paul, MN, in severe winter weather. She flew during the winter months of her two-year program, earning a lot of frequent flyer miles.
* Look at MBA programs that are geared toward health care professionals.
Some business schools have begun offering MBAs with a health care focus. The coursework for these degrees packages the same core subjects that all business schools offer -- finance, accounting, and strategy -- in health care issues rather than in general business. Had such a program been available to her at the time she did her MBA, Hamilton says she would have preferred to do it rather than a general MBA. Most MBA programs have a products and manufacturing focus, rather than a service focus, so some of what you learn isn't pertinent to home care or health care.
Some of the required courses in Hamilton's MBA covered manufacturing topics such as just-in-time delivery and other inventory subjects that she wasn't interested in, as these issues aren't as relevant to home care agencies. Hamilton has ended up using what she learned about these two subjects, however, as her new job includes overseeing home infusion therapy businesses.
"Even if what you learn isn't specific to health care, you really do benefit from the knowledge anyway," Hamilton says.
* Expect to incur some debt.
The price of an MBA varies drastically depending on the program, the school, and the part of the country you live in. Hamilton paid $25,000 for an MBA she finished in 1995, while Slack paid $9,600 in 1990. When shopping around, be sure to ask when tuition fees will go up. They often go up in mid-year, or in the middle of your degree, Hamilton found. Also, executive programs tend to be much more expensive, presumably because they are designed with the assumption that students' employers will foot the tuition bill.
* Ask your company if it will pay part of your tuition fees.
Not all companies are willing to pay for this, but it's worth asking about. Slack's company paid for half of her tuition.
"Write a solid proposal to your hospital to get them to pay for you tuition," Walden says.
In exchange, consider offering a commitment to stay with the company one year for every year you were in school, Walden says.
* Anticipate having to take the GMAT.
If you haven't taken the Graduate Management Admission Test (GMAT) in the last five years, you'll have to take it again to apply to business schools. You might have to brush up on your math skills to take the test, but most MBA programs offer a "math camp" the week prior to the start of the actual MBA courses.
"You realize how much you've forgotten when you have to use all that math again," Hamilton says.
Other ways to pick up business skills
If an MBA isn't the right route for you to take, here are some alternatives for picking up business skills:
* Are there alternatives to an MBA?
Whether you should do an MBA depends on your role in your home care agency and whether you want to work at top administrative levels, Hamilton says.
Even if you've learned the finance and accounting skills an MBA would give you by reading or taking short courses, having the MBA degree gives potential employers something to measure you by when comparing you to other candidates, Hamilton says.
If you already have a master's degree, you don't need an MBA, Slack says. Just the discipline and fundamental course work of any master's degree is enough. After that, you can learn in other ways: courses or seminars, or writing research papers for fellowships, Slack says.
But if Slack were a hospital-based home care director and didn't have any master's degrees, she'd definitely do the MBA, she says.
You can get a working knowledge of finance, accounting, and other skills by reading and by taking individual courses, Hamilton says. Taking seminars and courses here and there, however, isn't as intense an educational experience, she says.
MBA programs are designed to give you blocks of knowledge that build on each other to fit together into a comprehensive body of knowledge. If you take individual courses, you're not getting the whole picture, she says. But, it depends on what type of work you want to be doing and what skills you need.
"In the job market, will you be measured equally against others if you don't have the actual degree? I don't know," Hamilton says. *
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