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Are MDs More Effective At Running Hospitals Than MBAs?

It’s been more than five years since Henry Mintzberg released the enlightening book ‘Managers, not MBAs’, a well-reasoned criticism of prevailing management education that basically revolves around Master in Business Administration (MBA) programs. Financial crisis was not even in sight but Mintzberg, a professor at McGill University in Montreal and one of the most important guiding lights in the questionable field of management, already pointed out that it was a serious danger for modern organizations to rely on professionals that had just finished their MBAs as the prime source for senior managerial positions.

Mintzberg focused his criticism on two essential aspects. First, most programs are aimed at people with no previous experience or knowledge about organizations and how they look like from the inside… and these same people then storm into companies believing that the real world works exactly as business school taught them it does. The second point is that many of these business schools spread a perverted set of values, such as the hunt for short-term profit, the belief that a good aim justifies any means and the urge to translate all human behaviors into accountable figures (the ‘countophrenia’ depicted by Vincent de Gaulejac in his must-read ‘La Société Malade de la Gestion’).

Then the crisis rose, and many CEOs of the biggest organizations had their share of responsibility for it, as they were enjoying multi-million dollar bonuses while taking their companies to the edge of bankrupcy. Most of them came from the most famous business schools in the world. I have outlined in the past the outrageous conflict of interests of many of these institutions, starting with Harvard, as Charles Ferguson perfectly displayed in his brilliant documentary ‘Inside Job’.

‘Social Science and Medicine’ published in its August issue a very interesting work by Amanda Godall, professor at the IZA Institute for the Study of Labor in Bonn, Germany. Godall’s is the first empirical research on the correlation between hospital results and having MDs in their top managerial positions.

The work reviewed results from top 100 American hospitals in the areas of Cancer, Gastroenterology and Cardiovascular Disease. Godall used the Index of Hospital Quality, which takes into account several measures of infastructure, processes and results, and compared figures with the background of the board of directors that rule each hospital. In 2009, Gunderman & Kanter published in ‘Academic Medicine’ a study on 6,500 U.S. hospitals and found that only 235 were run by MDs.

Godall classed 300 hospital CEOs in two categories: professional managers with no clinical experience (often MBAs), and managers with a medical practice background. And she found a significant association between better IHQ results and having an MD running the hospital. As she points out, this doesn’t mean that people with a medical background are more effective managers. It could be that better hospitals tend to appoint MDs as CEOs, maybe as a way of improving carreer opportunities inside the organization.

Anyway, even if we need to acknowledge the limitations of this kind of research, Godall’s article is the first one to provide empirical data that not only open an interesting research field but also challenge HR policy in the healthcare sector. In public-funded healthcare systems with universal coverage such as the Spanish one, it also raises questions about Government policies over the last 30 years, in which it has been common practice to give important posts to people with no previous knowledge of the healthcare sector. The list of the latest Ministers of Health is the biggest proof: most of them, including current minister Leire Pajín, came to office without the slightest clue about the complexity inbuilt in healthcare management.

* This post was originally published in Spanish at El gerente de mediado *

*This blog post was originally published at Diario Medico*

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2 Responses to “Are MDs More Effective At Running Hospitals Than MBAs?”

  1. Richard Hom OD MPA says:

    Dr. Minue, An excellent article on the unique nature of hospital administration. Assuredly, hospitals have to blend the medical talent with business operations; and with that in mind, the head of a hospital should possess both leadership and managerial qualities., something that many people confuse as synonymous. They aren’t. No single degree can create leaders although they can become great managers. No single experience can equip someone to be a good operations manager. The blend is unique

  2. Sergio Minue says:

    Many thanks Mr Horn.
    I absolutely agree with you. Leaders and managers are both essentials. But it’s very difficult to find them in the same person. In the first case we need people able to inspire, to focus to mobilize the organization; in the second one we need to plan, to organize, to implement the activities. We need a special kind of equlibrium between clinical leadership and business management
    Thanks again

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